Republic of the Philippines

National Capital Judicial Region

METROPOLITAN TRIAL COURT
Branch 47, Pasay City

ARGUS CREDIT CORP.,

Plaintiff,

-versus- CIVIL CASE NO. 753-05 CFM

For: Replevin and /or
Sum of Money with Damages
DAVID ANICETO AND ELSIE ANICETO,
DAVERLY ANICETO, DANILO CASTRO,
AND NENITA CASTILLO,
Defendants.
X----------------------------------------------x

DECISION

Replevin is one of the most ancient actions known to law, taking its name from
the object of its process. It originated in common law as a remedy against the wrongful
exercise of the right of distress for rent and, according to some authorities, could only be
maintained in such a case. But by the weight of authority, the remedy is not and never
was restricted to cases of wrongful distress in the absence of any statutes relating to the
subject, but is a proper remedy for any unlawful taking.1

THE COMPLAINT

Plaintiff Argus Credit Corp. alleged that defendants David Aniceto, Elsie
Aniceto, Daverly Ancieto, Danilo Castro and Nenita Castillo executed and delivered a
promissory note dated February 4, 2005 with a face value of One Hundred Twelve
Thousand Two Hundred Pesos (P112,200.00) payable in daily equal instalment of One
Thousand One Hundred Pesos (P1,1000.00). To secure payment of the promissory
note, defendants executed in favor of plaintiff, a chattel mortgage dated May 23, 2005.
The defendants fulfilled their obligation under the loan dated February 4, 2005. They
re-applied for another loan in the amount of Fifty One Thousand Pesos (P51,000.00) to
be paid in daily equal instalment of Five Hundred Pesos (P500.00) until fully paid. They
executed a new promissory note dated June 3, 2005 and to secure payment of the said
obligation, they executed a Memorandum of Agreement instead of a new Deed of
Chattel Mortgage. Starting on July 11, 2005, defendants failed to pay their instalments
and refused to deliver the mortgaged chattels. Demand letter was given to the
defendants who did not heed it. The outstanding balance of the defendants at the time of
the filing of this complaint on September 5, 2005 is Thirty Five Thousand Seven
Hundred Fifty Pesos (P35, 750.00). Plaintiff prayed that: (1) a writ of replevin be issued

1Rivera vs. Vargas, G.R. No. 165895, June 5, 2009 citing Stone vs. Church, 16 N.Y.S.2d 512, 515, 172 Misc. 1007,
1008 (1939); Sinnott vs. Feiock, 59 N.E. 265, 165 N.Y. 444, 80 Am.S.R. 736, 53 L.R.A. 565 (1901); and Kurzweil vs.
Story & Clark Piano Co. and Blumgarten vs. Mason & Hamlin Co., 159 N.Y.S. 231, 95 Misc. 484 (1916); Palmer vs.
King, 41 App. DC. 419, L.R.A.1916D 278, Ann. Cas.1915C 1139 (1914).

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ordering the seizure of the chattels or personal properties stated in the promissory note
and deed of chattel mortgage ; and (2) judgment be rendered to confirm and ratify as
legal and valid the seizure of the chattels or personal properties after its delivery to
plaintiff for foreclosure to satisfy defendants unpaid obligation to the plaintiff with
order to defendants to jointly and severally pay the plaintiff the attorneys fees and the
cost of suit. In the alternative, plaintiff prayed that judgment be rendered ordering
defendant to pay the amount of Thirty Five Thousand Seven Hundred Fifty Thousand
Pesos (P35, 750.00) as unpaid principal with interests, attorneys fees, collection
charges, liquidated damages and cost of suit.

ANSWER

Defendants David Aniceto and Elsie Aniceto admitted the existence of their
loan with the plaintiff on February 4, 2005 as evidenced by a promissory note. They
paid said loan. They admitted to loan again on June 3, 2005 as evidenced by another
promissory note. They executed the Memorandum of Agreement. They alleged that
plaintiff has no cause of action. The complaint was filed prematurely. They have been
paying their obligations. They denied of not paying their dues starting July 11, 2005.
They have receipts to prove their payment until October, 2005. They are willing to pay
their obligations but plaintiff refused to accept payments and refused to coordinate with
the defendants on how these instalments will be paid. In their compulsory
counterclaims for the malicious filing of this complaint, defendants prayed that plaintiff
pay Twenty Thousand Pesos (P20,000.00) actual damages, Twenty Thousand Pesos
(P20,000.00) moral damages, Twenty Thousand Pesos (P20,000.00) exemplary
damages, and cost of suit.

STATEMENT OF THE CASE

On September 5, 2005, this instant case was filed. It would appear from the
Sheriffs Return dated November 23, 2005, that the Summons together with a copy of
the Complaint were served upon defendant David Aniceto who filed their Answer on
November 21, 2005. Upon Order dated April 23, 2009 of Acting Judge Josephine Vito
Cruz of this Court, the parties submitted their respective position paper. On September
3, 2009, Acting Judge Josephine Vito Cruz of this Court , motu propio corrected her
Order dated April 23, 2009 that this case is covered by regular procedure not summary
procedure thus this case was set for hearing. Trial on the merits ensued. On November
4, 2009, the plaintiffs counsel formally offered his evidence. On August 9, 2010,
defendants counsel formally offered his evidence. Thus this case was submitted for
decision.

EVIDENCE FOR THE PLAINTIFF

Testimonial

Plaintiffs counsel presented James Jordan Lopez as his lone witness.

JAMES JORDAN LOPEZ testified that he is the documentation and release

officer of the plaintiff. He is in charge of the recommendation and safe keeping of all

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loan documents. He refers any loan default to the legal department. He knew defendant
David Aniceto in this case because he obtained loan from the plaintiff based on the
promissory notes dated February 4, 2005 and June 3, 2005.2 The defendants in this
case defaulted payment since July 11, 2005 until now.3 The plaintiffs counsel sent them
a demand letter. Despite demand, defendants failed to pay. As of August 10, 2005, the
outstanding balance of defendants totalled to Fifty One Thousand Nine Hundred Ninety
Five Thousand Pesos and Twenty Nine Centavos (P51, 995.29). The plaintiffs counsel
agreed to Twenty Five Percent (25%) agreed principal plus interest as attorneys fees
and another Twenty Five percent(25%) of unpaid principal as liquidated damages.

During cross examination, he said that he prepared all the documents in this case
except the complaint. There were payments made after July 11, 2005 demand.4 On
August 27, 2005, the plaintiffs collector accepted the defendants payments amounting
to Thirty One Thousand One Hundred Ten Pesos (P31, 110.00). The collector informed
plaintiff which accepted it. 5 The plaintiffs complaint was filed on September 2, 2005.6

Documentary

The plaintiffs documentary evidence consisted of the following which were

admitted by this Court: (1) promissory note dated February 4, 2005 marked as Exhibit
A ; (2) Chattel Mortgage dated February 4, 2005 marked as Exhibit B;
(3)promissory note dated June 3, 2005 marked as Exhibit C; (4) Memorandum of
Agreement marked as Exhibit D; (5) Demand letter dated July 18, 2005 marked as
Exhibit E with sub markings; and (4) Statement of Account marked as Exhibit F.

EVIDENCE FOR THE DEFENDANT

Testimonial

The defendants counsel presented as his lone witness the defendant David
Aniceto.

DAVID ANICETO testified that he religiously made payments to the plaintiff.

He did not default in paying. On February4, 2005, he obtained a loan from plaintiff in
the amount of more or less One Hundred Twelve Thousand Pesos (P112,000.00) . The
daily payment of the loan is One Thousand One Hundred Pesos (P1, 100.00). The agent
of plaintiff collected the daily payment. The first loan was fully paid. The second loan is
in the amount of Fifty One Thousand Pesos (P51, 000.00), payment of the loan in daily
basis. The amount released was Thirty Nine Thousand Sixty Pesos and Sixty Five
Centavos (P39 ,060.65) to him. If the plaintiffs collector is unable to collect the daily
instalment payment, defendant doubles the payment. The last payment to the plaintiffs

2 TSN dated October 15, 2009, pp. 5 to 6.

3 TSN dated October 15, 2009, p. 8.
4 TSN dated October 15, 2009, p. 16.
5 TSN dated October 15, 2009, p. 17.
6 Ibid.

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collector was on August 27, 2005. Thereafter, no collector went to their place. The
collector told him that the plaintiffs officer prohibits further collection from him. They
were told to go to plaintiffs office. His wife went to the plaintiffs office to ask for the
balance. He was surprised to receive a subpoena because it is untrue that he defaulted
payment on July 11, 2005. He paid Three Thousand Pesos (P3, 000.00) on September 7,
2005 and Four Thousand Pesos (P4,000.00) on October 6, 2005. The ledger of the
plaintiff showed the amount of Nineteen Thousand Three Hundred Fifty Pesos (P19,
350.00) outstanding balance. The release date was on June 3, 2005 while the maturity
date was on September 13, 2005. He paid a total amount of Fifty Nine Thousand
Pesos (P59,000.00).

During his cross-examination, he testified that he is a college graduate who knew

how to read and write. He read the document before signing it. The maturity of the first
loan was in the second week of May, 2005. The promissory note was dated June 3,
2005 and the demand letter was dated July 18, 2005. His receipts showed the
statements without prejudice to the filing of legal action.

Documentary

The defendants documentary evidence consisted of the following which were

admitted by this Court: (1) Deposit slip dated October 6, 2005 marked as Exhibit 1 ;
(2) Deposit slip dated September 7, 2005 marked as Exhibit 2; (3) Official Receipts
issued by plaintiff marked as Exhibits 3 to 43; (4) Statement of Account of David
Aniceto issued by plaintiff as Exhibit 44; (5) Certificate of Encashment marked as
Exhibit 45 ; (6) Letter dated November 16, 2005 marked as Exhibit 46; (7) Official
receipt dated June 1, 2005 in the amount of Eighteen Thousand Pesos (P18,000.00) as
payment to plaintiff marked as Exhibit 49 ; and (8) Official Receipt dated June 3,
2005 in the amount of Two Thousand Four Hundred Thirty Nine Pesos and Thirty Five
Centavos (P2, 439.35) as payment to plaintiff marked as Exhibit 50.

ISSUES

(1) Whether or not there was an overpayment made by the defendants to the plaintiff;

(2) Whether or not the filing of this complaint is malicious for which the defendants are
entitled to recover P20,000.00 actual damages; P20, 000.00 moral damages;
P20,000.00 exemplary damages and cost of suit; and

(3) Whether or not plaintiff should be declared as the rightful possessor of the
following chattels belonging to defendants: (a) PANASONIC TV , model no.
TC21P4SE, serial no. 990300160 in the amount of P2, 500.00; (b) LA GERMANIA
GAS RANGE . model no. 500W4, serial no. 00026219 in the amount of P1,250.00;
(c) AIWA MINI COMPONENT , model no. NSX 594, serial no. SOYEB7B020 in
the amount of P1, 750.00; (d) CONDURA Refrigerator . model no. CB090TDM,
serial no. 064800013 in the amount of P2, 500.00; (e) AIWA Component, model no.
CXNS94HE, serial no. 504087BM0030 in the amount of P2,000.00; and (f) ISUZU

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 FUSO CARGO Truck , file no. 1328-74893, motor no. 10PA1-946063, serial no.
T951U-20688 in the amount of P70,000.00.

RULING

As the issues are intertwined, this Court will beg leave to discuss them jointly.

First, there was no over-payment made by the defendants to the plaintiff. From
the Statement of Account of David Aniceto, the defendants have the outstanding
balance of Nineteen Thousand Three Hundred Fifty Pesos (P19, 350.00) as of
September 13, 2005, the maturity date. In the same account, the total payment made by
defendants was Thirty One Thousand Six Hundred Fifty Pesos (P31, 650.00). The
defendants paid Two Thousand Four Hundred Thirty Nine Pesos and Thirty Five
Centavos (P2, 439. 35) on June 3, 2005 (Exhibit 50); Three Thousand Pesos
(P3,000.00) on September 7, 2005; (Exhibit 2) and Four Thousand Pesos (P4,
000.00) on October 6, 2005 (Exhibit 1). Therefore, the remaining outstanding
balance of the defendants is Nine Thousand Nine Hundred Ten Pesos and Sixty Five
Centavos (P9, 910.65). Since the release date of the loan is June 3, 2005, the payment
on June 1, 2005 in the amount of Eighteen Thousand Pesos (P18,000.00) by the
defendants (Exhibit 49) cannot be part of the payment of the promissory note dated
June 3, 2005 absent of express stipulation to that effect.

Second, the filing of the complaint is not malicious. Obligations arising from
contracts have the force of law between the contracting parties and should be complied
with in good faith. 7 The promissory noted dated June 3, 2005 is a contract between
the plaintiff and defendants which the parties are bound to follow the terms and
conditions thereof. In the said contract, the defendants obtained a loan of Fifty One
Thousand Pesos (P51,000.00) to be paid in a daily instalment of Five Hundred Pesos
(P500.00) with the interest rate of 1.37%. It is provided therein that in case of default in
the payment of any instalment or for violation of any conditions stipulated, the entire
balance of the obligation shall become immediately due and payable. Likewise, demand
and notice of dishonour are hereby waived. Holder may accept partial payment
reserving his right of recourse against each and all endorsers. Defendants agreed and
signed the aforesaid promissory note. Plaintiff alleged in the complaint that xxx
beginning July 11, 2005 defendants unjustifiably and illegally refused to pay their daily
instalments to the plaintiff. It appears from the Statement of Account of David Aniceto
(Exhibit H and Exhibit 44) that there was no payment of instalment on July 11,
2005. However, there are other dates which there are no payments by the defendants
which are on 6/3/05 to 6/6/05; 6/12/05; 6/19/05 to 6/20/05; 6/26/05 to 6/27/05;
6/29/05 to 6/30/05; 7/2/05 t0 7/3/05; 7/10/05 to 7/13/05; 7/16/05 to
7/18/05;7/24/05; 7/28/05; 7/30/05 to 7/31; 8/1/05 to 8/2/05; 8/5/05; 8/7/05;
8/9/05 to 8/13/05; 8/21/05; 8/26/05; 8/28/05 to 9/13/05. While defendants have a
point that disprove the averment by the plaintiff of their non-payment of the daily
instalment on July 11, 2005, this did not materially affect the complaint because of the
7 Article 1159 New Civil Code.

5
proviso in the promissory note, to reiterate that: Holder may accept partial payment
reserving his right of recourse against each and all endorsers. Plaintiff, started the
counting of the non-payment on July 11, 2005 instead of the other date out of the
numerous dates where there were default of payment, which made the entire obligation
due and demandable. This was established by plaintiff counsel that some receipts of
the defendant David Aniceto that showed his payment of the daily instalment bears the
words: Without prejudice to any legal action or case can file against him.8 The defendants are not
entitled to actual, moral and exemplary l damages. Actual damages refer to those recoverable
because of pecuniary loss, which include the value of the loss suffered and unrealized
profits.9 Actual damages must be proved and the amount of damages must possess at
least some degree of certainty.10 Evaluating the defendants documentary exhibits,
there was no evidence whatsoever adduced by them to prove the actual loss suffered by
them. There is no basis to award actual damages. No exemplary damages can be
awarded unless the defendants first establishes their clear right to moral damages. The
same principle holds true with attorneys fees and ligation expenses.

Lastly, the plaintiff should be declared as the rightful possessor of the following
chattels belonging to defendants: (a) PANASONIC TV , model no. TC21P4SE, serial no.
990300160 in the amount of P2, 500.00; (b) LA GERMANIA GAS RANGE . model no.
500W4, serial no. 00026219 in the amount of P1,250.00; (c) AIWA MINI
COMPONENT , model no. NSX 594, serial no. SOYEB7B020 in the amount of P1,
750.00; (d) CONDURA Refrigerator . model no. CB090TDM, serial no. 064800013 in
the amount of P2, 500.00; (e) AIWA Component, model no. CXNS94HE, serial no.
504087BM0030 in the amount of P2,000.00 totalling to Ten Thousand Pesos
(P10,000.00). It is provided in the Deed of Mortgage that should the mortgagors fail to
comply with the terms and conditions of the promissory note, the mortgagee shall
automatically have the absolute right without need or prior notice or demand to
judicially or extrajudicially foreclose this mortgage and proceed against all of the
mortgaged rights , interest and properties for the full satisfaction of the mortgagors
entire obligation to the mortgagee. Taking into account that the outstanding balance of
the defendants is Nine Thousand Nine Hundred Ten Pesos and Sixty Five Centavos (P9,
910.65), this amount can be fully satisfied with the afore-mentioned chattels without
the interest of twelve percent (12%) per annum. The seizure of ISUZU FUSO CARGO
Truck , file no. 1328-74893, motor no. 10PA1-946063, serial no. T951U-20688 in the
amount of P70,000.00 cannot be confirmed in favor of the plaintiff as the rightful
possessor because of the satisfaction of the outstanding obligation by the defendants by
the other chattels.

In view of the controverting evidence, after evaluating the testimonial and

documentary evidence of all the parties, this Court hereby finds for the defendants
that it is entitled to the possession of the subject vehicle ISUZU FUSO CARGO Truck ,
file no. 1328-74893, motor no. 10PA1-946063, serial no. T951U-20688.

8 TSN dated July 8, 2010, p. 22.

9 8 Manresa 100.
10 Tomassi vs. Villa-Abrillee, L-7047, August 21, 1958.

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 DISPOSITIVE PORTION

WHEREFORE, premises considered, judgement is hereby rendered in

favor of the plaintiff and against the defendants by ordering the latter to deliver,
through the sheriff, to the former, as rightful possessor, the following chattels:

(a) PANASONIC TV , model no. TC21P4SE, serial no. 990300160 in the amount of Two
Thousand Five Hundred Pesos (P2, 500.00);

(b) LA GERMANIA GAS RANGE . model no. 500W4, serial no. 00026219 in the amount
of One Thousand Two Hundred Fifty Pesos (P1,250.00);

(c) AIWA MINI COMPONENT , model no. NSX 594, serial no. SOYEB7B020 in the
amount of One Thousand Seven Hundred Fifty Pesos (P1, 750.00);

(d) CONDURA Refrigerator . model no. CB090TDM, serial no. 064800013 in the
amount of Two Thousand Five Hundred Pesos (P2, 500.00); and

(e) AIWA Component, model no. CXNS94HE, serial no. 504087BM0030 in the amount
of Two Thousand Pesos (P2,000.00) for foreclosure in accordance to the chattel
mortgage.

However, considering the depreciation of the subject chattels, defendants should pay the
plaintiff the deficient amount of the sale of the chattels which must correspond to the
amount of Nine Thousand Nine Hundred Ten Pesos and Sixty Five Centavos (P9,
910.65), the outstanding obligation.

Also, defendants are ordered to pay to the plaintiff the interest of Twelve percent
(12%) per annum to the outstanding balance of Nine Thousand Nine Hundred Ten
Pesos and Sixty Five Centavos (P9, 910.65) computed from the time of the filing of the
complaint until fully paid.

In case delivery of the afore-mentioned chattels cannot be made, the defendants

are ordered to jointly and severally pay the plaintiff the amount of Nine Thousand Nine
Hundred Ten Pesos and Sixty Five Centavos (P9, 910.65) with the interest rate of
Twelve percent (12%) per annum computed from the time of the filing of the complaint
until fully paid.

The counterclaims of the defendants are dismissed.

The plaintiff is ordered to return, through the sheriff, the seized subject
mortgaged vehicle ISUZU FUSO CARGO Truck , file no. 1328-74893, motor no. 10PA1-
946063, serial no. T951U-20688 in full tank together with the 4d Motolite battery and
Two (2) Goodyear spare tires.

7
 In case the delivery of the mortgaged vehicle cannot be made, plaintiff is ordered
to pay the amount Seventy Thousand Pesos (P70,000.00) representing the value of the
subject motor vehicle as well as the monetary equivalent of the gasoline, 4d Motolite
battery and Two (2) Goodyear spare tires.

SO ORDERED.

Pasay City, September 3, 2010.

ELIZA B. YU
Judge

Copy furnished:
Atty. Antonio Silang
Counsel for the Plaintiff
1052 MPI Bldg., EDSA Magallanes Village,
Makati City

Atty. Remmel Balinbin

Counsel for the Defendant
Public Attorneys Office
Pasay City Hall

Argus Credit Corp.

1052 EDSA Magallanes Village,
Makati City

David Aniceto
34 Pag-Asa St., Zone I, Signal Village,
Taguig