So, you won: can you enforce it? Some tips

 Posted By: je froilan m. clerigo
13-Dec-2007

You won a collection suit. There was no appeal, yet the losing party does not pay. The court grants your motion for a writ of execution. There is just one problem: when you asked the client to locate properties of his debtor so you can sell them at auction to pay the debt, he was unable to. What now? Here are some suggestions:

1. Ask the court for an order for the examination of the losing party in court. Section 36, Rule 39 authorizes this. Ask for a subpoena to compel attendance. If he does not show up, or he does not want to answer questions during the examination, ask that he or she be cited in contempt. Have him or her arrested, if necessary.

During the examination, ask questions about his or her means of income, properties, bank accounts, stocks, dividends, etc., essentially asking for all of his or her means to pay the debt. Make him or her realize that if he or she lies during this examination, you will not hesitate to prosecute him or her for perjury.

Sometimes, your client may have an idea what or where the properties are. Get the documents and confront the debtor with them. Ask him or her to confirm if these were indeed his or her properties. If these properties are in the hands of another person or corporation, you can consider taking the next suggestion.

2. What if the debtor cannot be located, should you wait until he gets arrested? Not necessarily if you or your client suspects that the debtor owns stocks in a company, or maintains an account with a bank, or holds cedits of other people (that is, there are people who are also indebted to him). Ask the court for an order requiring these persons - or representatives in case of corporations - to appear in court to be examined. Again, ask for a subpoena to compel their attendance. Most of the time, just the spectre of appearing in court would be sufficient for them to cooperate with you. Otherwise, examine them, require them to produce documents, and confirm your information on the properties of the debtor.

The good thing with this order is that, just its receipt by the person or corporation will already "bind all credits due (your client) and all money and property of the judgment obligor in the possession or in the control of such person, corporation or juridical entity for the time of service." This means that if after receiving this order, these persons or corporations should connive with the losing party to get these properties out of your reach - such as allowing sale or withdrawal - they can be punished for contempt; in fact, in my opinion, they can even be made to pay the judgment debt themselves, being responsible for denying you your legal recourse against the losing debtor.

We suggest further that, to increase your chances of collection, a prudent step to take is to use the modes of discovery (interrogatories, deposition, production of documents) to know the financial capacity of the other party: find out what and where his or her properties are so you can secure them at the end of the case. That's a subject for another blog entry, though.