RULE
4 PRELIMINARY
ATTACHMENT
Section 1.
Grounds upon which attachment may issue. At the commencement
of the action or at any time before entry of judgment, a complainant or
any proper party may have the property of the adverse party attached as
security for the satisfaction of any judgment that may be recovered in
the following cases:
a) In an
action
against a party who has been guilty of fraud in procuring the
registration
of a mark in the Office by false or fraudulent declaration or
representation,
whether oral or in writing, or by any false means;
b) In an
action against
a party who has employed deception or any other means contrary to good
faith by which he shall pass off the goods manufactured by him or in
which
he deals or his business or services for those of the one having
established
such goodwill, or who shall
commit
any act calculated to produce said result whether or not a mark is
involved;
c) In an
action against
a party who does not reside and is not found in the Philippines, or on
whom summons may be served by publication;
d) In an
action for
the recovery of a specified amount of money or damages on a cause of
action
arising from a violation of the IP Code against a party who is about to
depart from the Philippines with intent to evade the execution of
judgment;
or e) In an
action
against a party who has removed or disposed of his property, or is
about
to do so, with intent to defraud the party aggrieved.
Section
2. Issuance and contents of order. An order of
attachment may
be issued either ex parte or upon motion with notice and hearing
conducted
by the Hearing Officer. The Hearing Officer shall determine
whether
the attachment sought is meritorious or not. Should an Order of
Attachment
be issued by the Hearing Officer, he shall sign and forward the Order
to
the Director who shall direct, without delay, the officer or such other
designated employee of the Bureau to attach so much of the property in
the Philippines of the party against whom it is issued, not exempt from
execution, as may be sufficient to satisfy the applicant’s demand,
unless
such party makes deposit or gives a bond as hereinafter provided in an
amount equal to that fixed in the order, which may be the amount
sufficient
to satisfy the applicant’s demand or the value of the property to be
attached
as stated by the applicant, exclusive of costs.
Section
3.
Affidavit and bond required. An order of attachment shall be
granted only when it appears by the affidavit of the applicant, or of
some
other person who personally knows the facts, that a sufficient cause of
action exists, that the case is one of those mentioned in Section 1
hereof,
that there is no other sufficient security for the claim sought to be
enforced
by the action, and that the amount due to the applicant, or the value
of
the property the possession of which he is entitled to recover, is as
much
as the sum for which the order is granted above all legal
counterclaims.
The affidavit and the bond must be duly filed with the Hearing Officer
and forwarded to the Office of the Director before the order
issues.
Section
4.
Condition of applicant’s bond. The party applying for the
order
must give a bond executed to the adverse party in the
amount
fixed by the Hearing Officer in his order granting the issuance of the
writ, conditioned that the applicant will pay all the costs which
may be adjudged to the adverse party and all damages which he may
sustain by reason of the attachment, if the Hearing Officer shall
finally
adjudge that the applicant was not entitled thereto.
Section
5. Manner of attaching property. The officer
enforcing
the writ
shall, without delay and with all reasonable diligence, attach, to
await
judgment and execution in the action, only so much of the property in
the
Philippines of the party against whom the writ is issued, not exempt
from
execution, as may be sufficient to satisfy the applicant’s demand,
unless
the former makes a deposit with the Office of the Director from which
the
writ is issued, or gives a counterbond executed to the applicant, in an
mount equal to the bond fixed by the Hearing Officer in the order of
attachment
or to the value of the property to be attached, exclusive of
costs.
No levy on attachment pursuant to the writ shall be enforced unless it
is preceded, or contemporaneously accompanied by service of summons,
together
with a copy of the complaint, the application for attachment, the
applicant’s
affidavit and bond, and the order and writ of attachment on the
defendant
within the Philippines.
The requirement of
prior or contemporaneous service of summons shall not apply where the
summons
could not be served personally or by substituted service despite
diligent
efforts, or the defendant is a resident of the Philippines temporarily
absent therefrom, or the defendant is a non-resident of the
Philippines.
Section 6. Return.
(a) After enforcing the writ, the officer must
likewise, without
delay, make a return thereon to the Hearing Officer from whom the writ
issued, with a full statement of his proceedings under the writ and a
complete
inventory of the property attached, together with any counterbond given
by the party against whom attachment is issued, and serve copies
thereof
on the applicant.
(b) The officer shall
submit a report to the responsible officer of the Bureau on the action
taken on all writs and processes assigned to them within twenty (20)
days
from receipt of said process or writ. Said report shall form part
of the records of the case.
(c) At the end of
every month, said responsible officer shall submit a report to the
Director
indicating therein the number of writs and processes issued and served,
as well as the number of writs and processes unserved during the month
and the names of the Sheriffs who executed each writ. Unserved
writs
and processes shall be explained in the report.
Section
7. What may be the subject of Attachment and the manner of
executing the
same. The following properties may be the subject of
attachment:
a) Real
Properties.
Real properties, or the machineries that may be found inside the
premises
belonging to the party against whom the writ is issued, or any interest
therein, by filing with the Registry of Deeds a copy of the order,
together
with a description of the property attached, and a notice that it is
attached,
and by leaving a copy of such order, description, and notice with the
occupant
of the property, if any, or with such other person or his agent if
found
within the city or province where the property is located. The
Registrar
of Deeds must index attachments filed under this section in the name of
the applicant, the adverse party, or the person by whom the property is
held or in whose name it stands in the records. If the attachment
is not claimed on the entire area of the land covered by the
certificate
of title, a description sufficiently accurate for the identification of
the land or interest to be affected shall be included in the
registration
of such attachment.
b) Personal
properties.
Those personal properties capable of manual delivery, by taking and
safely
keeping it in officer’s custody, after issuing the corresponding
receipt
therefor.
c) Stocks
or shares,
or an interest in stocks or shares, of any corporation or company, by
leaving
with the president or managing agent thereof ,a copy of the writ, and a
notice stating that the stock or interest of the party against whom the
attachment is issued is attached in pursuance of such writ.
Section
8. When attached property may be sold after levy on
attachment
and before
entry of judgment. Whenever it shall be made to appear to
the
Hearing Officer, upon hearing with notice to both parties, that the
property
attached is perishable, or that the interests of all the parties to the
action will be subserved by the sale thereof, the Hearing Officer may
order
such property to be sold at public auction in such manner as he may
direct,
and the proceeds of such sale to be deposited in the Office of the
Director
to await the judgment in the action.
Section
9. Discharge of attachment upon giving counterbond.
After a writ
if attachment has been enforced, the party whose property has been
attached,
or the person appearing on his behalf, may move for the discharge of
the
attachment wholly or in part on the security given. The Hearing
Officer
shall, after due notice and hearing, order the discharge of the
attachment
if the movant makes a cash deposit, or files a counterbond executed to
the attaching party with the Office of the Director in an amount equal
to that fixed by the Hearing Officer in the order of attachment,
exclusive
of costs. But if the attachment is sought to be discharged with
respect
to a particular property, the counterbond shall be equal to the value
of
that property as determined by the Hearing Officer. In either
case,
the cash deposit or the counterbond shall secure the payment of any
judgment
that the attaching party may recover in the action. A notice of
the
deposit shall forthwith be served on the attaching party. Upon
the
discharge of an attachment in accordance with the provisions of this
section,
the property attached, or the proceeds of any sale thereof, shall be
delivered
to the party making the deposit or giving the counterbond, or to the
person
appearing on his behalf, the deposit or counterbond aforesaid standing
in place of the property so released. Should such counterbond for
any reason be found to be or become insufficient, and the party
furnishing
the same fail to file an additional counterbond, the attaching party
may
apply for a new order of attachment.
Section
10. Discharge of attachment on other grounds. The
party
whose
property has been ordered attached may file a motion with the Hearing
Officer
to whom the case is pending, before or after levy or even after the
release
of the attached property, for an order to set aside or discharge
the attachment on the ground that the same was improperly or
irregularly
issued or enforced, or that the bond is insufficient. If the
attachment
is excessive, the discharge shall be limited to the excess. If
the
motion be made on affidavits on the part of the movant but not
otherwise,
the attaching party may oppose the motion by counter-affidavits or
other
evidence in addition to that on which the attachment was made.
After
due notice and hearing, the Hearing Officer shall order the setting
aside
or the corresponding discharge of the attachment if it appears that it
was improperly or irregularly issued or enforced, or that the bond is
insufficient,
or that the attachment is excessive, and the defect is not cured
forthwith.
Section
11. When the property attached is claimed by third
person. If
the property attached is claimed by a person not a party to the
proceeding,
and such person makes an affidavit of his title thereto, or right to
the
possession thereof, and serves such affidavit upon the sheriff and a
copy
thereof upon the attaching party, the sheriff shall not be bound to
keep
the property under attachment unless the attaching party or his agent,
on demand of the sheriff shall file a bond approved by the Hearing
Officer
to indemnify the third party claimant in a sum not less than the value
of the property levied upon. In case of disagreement as to such
value,
the same shall be decided by the Director. No claim for damages
for
the taking or keeping of the property may be enforced against the bond
unless the action therefor is filed within sixty (60) days from the
date
of the filing of the bond.
The sheriff shall
not be liable for damages for the taking or keeping of such property,
to
any such third party claimant, if such bond shall be filed.
Nothing
herein contained shall prevent such claimant or any third person from
vindicating
his claim to the property, or prevent the attaching party from claiming
damages against a third party claimant who filed a frivolous or plainly
spurious claim, in the same or a separate action.
Section
12. Satisfaction of judgment out of property attached;
return
of sheriff. If judgment be recovered by the attaching party
and
execution issue thereon, the sheriff may cause the judgment to be
satisfied
out of the property attached, if it be sufficient for that purpose in
the
following manner:
a) By paying
to
the judgment obligee the proceeds of all sales of perishable or other
property
sold in pursuance of the order of the court, or so much as shall be
necessary
to satisfy the judgment;
b) If any
balance
remains due, by selling so much of the property, real or personal, as
may
be necessary to satisfy the balance, if enough for that purpose remain
in the sheriff’s hands, or in those of the Office of the Director.
Section
13. Balance due collected upon an execution; excess delivered
to
judgment
obligor. If after realizing upon all the property attached,
and
applying the proceeds to the satisfaction of the judgment, less the
expenses
of proceedings upon the judgment, any balance shall remain due, the
sheriff
must proceed to collect such balance as upon ordinary execution.
Whenever the judgment shall have been paid, the sheriff, upon
reasonable
demand, must return to the judgment obligor the attached property
remaining
in his hands, and any proceeds of the sale of the property attached not
applied to the judgment.
Section
14. Recovery upon the counterbond. When the
judgment has
become
executory, the surety or sureties on any counterbond given pursuant to
the provisions of this Rule to secure the payment of the judgment shall
become charged on such counterbond and bound to pay the judgment
obligee
upon demand the amount due under the judgment, which amount may be
recovered
from such surety or sureties after notice and summary hearing in the
same
action.
Section
15. Disposition of attached property where judgment is for
party
against
whom attachment was issued. If judgment be rendered against
the
attaching party, all the proceeds of sales and money collected or
received
by the sheriff, under the order of attachment and all property attached
remaining in such officer’s hands, shall be delivered to the party
against
whom attachment was issued, and the order of attachment
discharged.
Section
16.
Claim for damages on account of improper, irregular or excessive
attachment. An application for damages on account of
improper, irregular
or excessive
attachment must be filed with the Director before the trial or before
appeal
is perfected or before the judgment becomes executory, with due notice
to the attaching party and his surety or sureties, setting forth the
facts
showing his right to damages and the amount thereof. Such damages
may be awarded only after proper hearing and shall be included in the
judgment
on the main case.
If, on
appeal,
the judgment of the Director-General be favorable to the party against
whom the attachment was issued, the latter may claim damages sustained
during the pendency of the appeal by filing an application in the
Office
of the Director-General, with notice to the party in whose favor the
attachment
was issued or his surety or sureties, before the judgment of the
Director-General
becomes executory. The Director-General may reward the
application
to the Bureau for hearing and decision.
Nothing herein
contained shall prevent the party against whom the attachment was
issued
from recovering in the same action the damages awarded to him from any
property of the attaching party not exempt from execution should the
bond
or deposit given by the latter be insufficient or fail to fully satisfy
the award.
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