After reading “What is Garnishment?”, read also “What you need to know about the Bank Secrecy Law”
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Garnishment refers to any legal or equitable procedure through which the earnings of any individual are required to be withheld for payment of any debt.
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Garnishment is considered as a specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the litigation.
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A writ of attachment is substantially a writ of execution except that it emanates at the beginning, instead of at the termination, of a suit.
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It places the attached properties in custodia legis, obtaining pendente lite a lien until the judgment of the proper tribunal on the plaintiff’s claim is established, when the lien becomes effective as of the date of the levy.
Garnishment refers to any legal or equitable procedure through which the earnings of any individual are required to be withheld for payment of any debt.
Garnishment as a creditor’s remedy sometimes results in loss of employment by the debtor, resulting in the disruption of employment, production, and consumption which constitutes a substantial burden on local commerce.
The law says:
Section 9 of Rule 39 of the 2019 Amendments to the Rules of Court states that:
Section 9. Execution of judgments for money, how enforced. —
(a) xxx
(b) xxx
(c) Garnishment of debts and credits. — The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. The garnishment shall cover only such amount as will satisfy the judgment and all lawful fees.
The garnishee shall make a written report to the court within five (5) days from service of the notice of garnishment stating whether or not the judgment obligor has sufficient funds or credits to satisfy the amount of the judgment. If not, the report shall state how much funds or credits the garnishee holds for the judgment obligor. The garnished amount in cash, or certified bank check issued in the name of the judgment obligee, shall be delivered directly to the judgment obligee within ten (10) working days from service of notice on said garnishee requiring such delivery, except the lawful fees which shall be paid directly to the court.
In the event there are two or more garnishees holding deposits or credits sufficient to satisfy the judgment, the judgment obligor, if available, shall have the right to indicate the garnishee or garnishees who shall be required to deliver the amount due, otherwise, the choice shall be made by the judgment obligee.
xxx” (Emphasis supplied.)
Jurisprudence says:
In the case of Engineering Construction, Inc. v. National Power Corporation (G.R. No. L-34589, June 29, 1988), the Supreme Court defined garnishment in the following manner:
“Garnishment is considered as a specie of attachment for reaching credits belonging to the judgment debtor and owing to him from a stranger to the litigation. Under the above-cited rule, the garnishee [the third person] is obliged to deliver the credits, etc. to the proper officer issuing the writ and “the law exempts from liability the person having in his possession or under his control any credits or other personal property belonging to the defendant, . . ., if such property be delivered or transferred, . . ., to the clerk, sheriff, or other officer of the court in which the action is pending.”
What is the effect of garnishment?
In the case of Bank of the Philippine Islands v. Carlito Lee (G.R. No. 190144, August 01, 2012), citing the case of Santos v. Aquino, Jr. (G.R. Nos. 86181-82, January 13, 1992), the Supreme Court ruled that garnishment places the attached properties in custodia legis, thus:
“A writ of attachment is substantially a writ of execution except that it emanates at the beginning, instead of at the termination, of a suit. It places the attached properties in custodia legis, obtaining pendente lite a lien until the judgment of the proper tribunal on the plaintiff’s claim is established, when the lien becomes effective as of the date of the levy.”
Does garnishment have the effect of binding a third party or a garnishee to the jurisdiction of the trial courts?
In Perla Compania de Seguros, Inc. v. Ramolete (G.R. No. 60887, November 13, 1991), the Supreme Court Court ruled:
“In order that the trial court may validly acquire jurisdiction to bind the person of the garnishee, it is not necessary that summons be served upon him. The garnishee need not be impleaded as a party to the case. All that is necessary for the trial court lawfully to bind the person of the garnishee or any person who has in his possession credits belonging to the judgment debtor is service upon him of the writ of garnishment.
The Rules of Court themselves do not require that the garnishee be served with summons or impleaded in the case in order to make him liable.
xxxx
Through the service of the writ of garnishment, the garnishee becomes a “virtual party” to, or a “forced intervenor” in the case and the trial court thereby acquires jurisdiction to bind him to compliance with all orders and processes of the trial court with a view to the complete satisfaction of the judgment of the court.”
Are salaries exempt from garnishment?
The law says:
Section 13 of Rule 39 [Execution, Satisfaction and Effect of Judgments] of 1997 Rules of Court provides that:
>Section 13. Property exempt from execution. — Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:
xxx
- So much of the salaries, wages, or earnings of the judgment obligor for his personal services within the four months preceding the levy as are necessary for the support of his family;
Xxx” (Emphasis supplied.)
Further, Section 40 of Rule 39 of the Rules of Court provides that:
Section 40. Order for application of property and income to satisfaction of judgment. — The court may order any property of the judgment obligor, or money due him, not exempt from execution, in the hands of either himself or another person, or of a corporation or other juridical entity, to be applied to the satisfaction of the judgment, subject to any prior rights over such property.
If, upon investigation of his current income and expenses, it appears that the earnings of the judgment obligor for his personal services are more than necessary for the support of his family, the court may order that he pay the judgment in fixed monthly installments, and upon his failure to pay any such installment when due without good excuse, may punish him for indirect contempt.” (Emphasis supplied.)
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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