Fraud on the part of respondent MPEI was sufficiently established by the factual findings

of this Court in the latter's 2004 Decision and subsequent pronouncements.

Petitioner argues that the findings of this Court in the 2004 Decision serve as sufficient basis
to prove that, at the time of the execution of the automation contract, there was fraud
on the part of respondents that justified the issuance of a writ of attachment.
Respondents, however, argue the contrary. They claim that fraud had not been
sufficiently established by petitioner.

We rule in favor of petitioner. Fraud on the part of respondents MPEI and Willy, as well as
of the other individual respondents - Bonnie, Enrique, Rosita, Pedro, Johnson, Bernard,
and Lauriano -has been established.

A writ of preliminary attachment is a provisional remedy issued upon the order of the
court where an action is pending.1âwphi1 Through the writ, the property or properties of
the defendant may be levied upon and held thereafter by the sheriff as security for the
satisfaction of whatever judgment might be secured by the attaching creditor against
the defendant.61 The provisional remedy of attachment is available in order that the
defendant may not dispose of the property attached, and thus prevent the satisfaction
of any judgment that may be secured by the plaintiff from the former. 62

The purpose and function of an attachment or garnishment is twofold. First, it seizes upon
property of an alleged debtor in advance of final judgment and holds it subject to
appropriation, thereby preventing the loss or dissipation of the property through fraud or
other means. Second, it subjects the property of the debtor to the payment of a creditor's
claim, in those cases in which personal service upon the debtor cannot be
obtained.63 This remedy is meant to secure a contingent lien on the defendant's property
until the plaintiff can, by appropriate proceedings, obtain a judgment and have the
property applied to its satisfaction, or to make some provision for unsecured debts in
cases in which the means of satisfaction thereof are liable to be removed beyond the
jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond the
reach of creditors.64

Petitioner relied upon Section l (d), Rule 57 of the Rules of Court as basis for its application
for a writ of preliminary attachment. This provision states:

Section 1. Grounds upon which attachment may issue. At the commencement of the
action or at any time before entry of judgment, a plaintiff 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:

xxxx

(d) In an action against a party who has been guilty of a fraud in contracting the debt or
incurring the obligation upon which the action is brought or in the performance thereof.
(Emphasis supplied)
For a writ of preliminary attachment to issue under the above-quoted rule, the applicant
must sufficiently show the factual circumstances of the alleged fraud. 65 In Metro, Inc. v.
Lara's Gift and Decors, Inc., 66We explained:

To sustain an attachment on this ground, it must be shown that the debtor in contracting
the debt or incurring the obligation intended to defraud the creditor. The fraud must
relate to the execution of the agreement and must have been the reason which induced
the other party into giving consent which he would not have otherwise given. To
constitute a ground for attachment in Section 1 (d), Rule 57 of the Rules of Court, fraud
should be committed upon contracting the obligation sued upon. A debt is fraudulently
contracted if at the time of contracting it the debtor has a preconceived plan or
intention not to pay, as it is in this case. x x x.

The applicant for a writ of preliminary attachment must sufficiently show the factual
circumstances of the alleged fraud because fraudulent intent cannot be inferred from
the debtor's mere non-payment of the debt or failure to comply with his obligation.
(Emphasis supplied)

An amendment to the Rules of Court added the phrase "in the performance thereof' to
include within the scope of the grounds for issuance of a writ of preliminary attachment
those instances relating to fraud in the performance of the obligation.67

Fraud is a generic term that is used in various senses and assumes so many different
degrees and forms that courts are compelled to content themselves with comparatively
few general rules for its discovery and defeat. For the same reason, the facts and
circumstances peculiar to each case are allowed to bear heavily on the conscience
and judgment of the court or jury in determining the presence or absence of fraud. In
fact, the fertility of man's invention in devising new schemes of fraud is so great that courts
have always declined to define it, thus, reserving for themselves the liberty to deal with it
in whatever form it may present itself.68

Fraud may be characterized as the voluntary execution of a wrongful act or a wilful

omission, while knowing and intending the effects that naturally and necessarily arise
from that act or omission.69 In its general sense, fraud is deemed to comprise anything
calculated to deceive-including all acts and omission and concealment involving a
breach of legal or equitable duty, trust, or confidence justly reposed-resulting in damage
to or in undue advantage over another.70 Fraud is also described as embracing all
multifarious means that human ingenuity can device, and is resorted to for the purpose
of securing an advantage over another by false suggestions or by suppression of truth;
and it includes all surprise, trick, cunning, dissembling, and any other unfair way by which
another is cheated.71

While fraud cannot be presumed, it need not be proved by direct evidence and can
well be inferred from attendant circumstances.72 Fraud by its nature is not a thing
susceptible of ocular observation or readily demonstrable physically; it must of necessity
be proved in many cases by inferences from circumstances shown to have been
involved in the transaction in question