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Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-7057 October 29, 1954

MACHINERY & ENGINEERING SUPPLIES, INC., petitioner,


vs.
THE HONORABLE COURT OF APPEALS, HON. POTENCIANO PECSON,
JUDGE OF THE COURT OF FIRST INSTANCE OF MANILA, IPO LIMESTONE
CO., INC., and ANTONIO VILLARAMA, respondents.
Vicente J. Francisco for petitioner.
Capistrano and Capistrano for respondents.

CONCEPCION, J.:

This is an appeal by certiorari, taken by petitioner Machinery and Engineering Supplies Inc.,
from a decision of the Court of Appeals denying an original petition for certiorari filed by said
petitioner against Hon. Potenciano Pecson, Ipo Limestone Co., Inc., and Antonio Villarama, the
respondents herein.

The pertinent facts are set forth in the decision of the Court of Appeals, from which we quote:

On March 13, 1953, the herein petitioner filed a complaint for replevin in the Court of
First Instance of Manila, Civil Case No. 19067, entitled "Machinery and Engineering
Supplies, Inc., Plaintiff, vs. Ipo Limestone Co., Inc., and Dr. Antonio Villarama,
defendants", for the recovery of the machinery and equipment sold and delivered to said
defendants at their factory in barrio Bigti, Norzagaray, Bulacan. Upon application ex-
parte of the petitioner company, and upon approval of petitioner's bond in the sum of
P15,769.00, on March 13,1953, respondent judge issued an order, commanding the
Provincial Sheriff of Bulacan to seize and take immediate possession of the properties
specified in the order (Appendix I, Answer). On March 19, 1953, two deputy sheriffs of
Bulacan, the said Ramon S. Roco, and a crew of technical men and laborers proceeded to
Bigti, for the purpose of carrying the court's order into effect. Leonardo Contreras,
Manager of the respondent Company, and Pedro Torres, in charge thereof, met the
deputy sheriffs, and Contreras handed to them a letter addressed to Atty. Leopoldo C.
Palad, ex-oficio Provincial Sheriff of Bulacan, signed by Atty. Adolfo Garcia of the
defendants therein, protesting against the seizure of the properties in question, on the
ground that they are not personal properties. Contending that the Sheriff's duty is
merely ministerial, the deputy sheriffs, Roco, the latter's crew of technicians and
laborers, Contreras and Torres, went to the factory. Roco's attention was called to the
fact that the equipment could not possibly be dismantled without causing damages or
injuries to the wooden frames attached to them. As Roco insisted in dismantling the
equipment on his own responsibility, alleging that the bond was posted for such
eventuality, the deputy sheriffs directed that some of the supports thereof be cut
(Appendix 2). On March 20, 1953, the defendant Company filed an urgent motion, with
a counter-bond in the amount of P15,769, for the return of the properties seized by the
deputy sheriffs. On the same day, the trial court issued an order, directing the Provincial
Sheriff of Bulacan to return the machinery and equipment to the place where they were
installed at the time of the seizure (Appendix 3). On March 21, 1953, the deputy sheriffs
returned the properties seized, by depositing them along the road, near the quarry, of
the defendant Company, at Bigti, without the benefit of inventory and without re-
installing hem in their former position and replacing the destroyed posts, which
rendered their use impracticable. On March 23, 1953, the defendants' counsel asked the
provincial Sheriff if the machinery and equipment, dumped on the road would be re-
installed tom their former position and condition (letter, Appendix 4). On March 24,
1953, the Provincial Sheriff filed an urgent motion in court, manifesting that Roco had
been asked to furnish the Sheriff's office with the expenses, laborers, technical men and
equipment, to carry into effect the court's order, to return the seized properties in the
same way said Roco found them on the day of seizure, but said Roco absolutely refused
to do so, and asking the court that the Plaintiff therein be ordered to provide the
required aid or relieve the said Sheriff of the duty of complying with the said order
dated March 20, 1953 (Appendix 5). On March 30, 1953, the trial court ordered the
Provincial Sheriff and the Plaintiff to reinstate the machinery and equipment removed
by them in their original condition in which they were found before their removal at the
expense of the Plaintiff (Appendix 7). An urgent motion of the Provincial Sheriff dated
April 15, 1953, praying for an extension of 20 days within which to comply with the
order of the Court (appendix 10) was denied; and on May 4, 1953, the trial court ordered
the Plaintiff therein to furnish the Provincial Sheriff within 5 days with the necessary
funds, technical men, laborers, equipment and materials to effect the repeatedly
mentioned re-installation (Appendix 13). (Petitioner's brief, Appendix A, pp. I-IV.)

Thereupon petitioner instituted in the Court of Appeals civil case G.R. No. 11248-R, entitled
"Machinery and Engineering Supplies, Inc. vs. Honorable Potenciano Pecson, Provincial Sheriff
of Bulacan, Ipo Limestone Co., Inc., and Antonio Villarama." In the petition therein filed, it was
alleged that, in ordering the petitioner to furnish the provincial sheriff of Bulacan "with
necessary funds, technical men, laborers, equipment and materials, to effect the installation of
the machinery and equipment" in question, the Court of Firs Instance of Bulacan had committed
a grave abuse if discretion and acted in excess of its jurisdiction, for which reason it was prayed
that its order to this effect be nullified, and that, meanwhile, a writ of preliminary injunction be
issued to restrain the enforcement o said order of may 4, 1953. Although the aforementioned
writ was issued by the Court of Appeals, the same subsequently dismissed by the case for lack
of merit, with costs against the petitioner, upon the following grounds:

While the seizure of the equipment and personal properties was ordered by the
respondent Court, it is, however, logical to presume that said court did not authorize the
petitioner or its agents to destroy, as they did, said machinery and equipment, by
dismantling and unbolting the same from their concrete basements, and cutting and
sawing their wooden supports, thereby rendering them unserviceable and beyond
repair, unless those parts removed, cut and sawed be replaced, which the petitioner, not
withstanding the respondent Court's order, adamantly refused to do. The Provincial
Sheriff' s tortious act, in obedience to the insistent proddings of the president of the
Petitioner, Ramon S. Roco, had no justification in law, notwithstanding the Sheriffs'
claim that his duty was ministerial. It was the bounden duty of the respondent Judge to
give redress to the respondent Company, for the unlawful and wrongful acts committed
by the petitioner and its agents. And as this was the true object of the order of March 30,
1953, we cannot hold that same was within its jurisdiction to issue. The ministerial duty
of the Sheriff should have its limitations. The Sheriff knew or must have known what is
inherently right and inherently wrong, more so when, as in this particular case, the
deputy sheriffs were shown a letter of respondent Company's attorney, that the
machinery were not personal properties and, therefore, not subject to seizure by the
terms of the order. While it may be conceded that this was a question of law too
technical to decide on the spot, it would not have costs the Sheriff much time and
difficulty to bring the letter to the court's attention and have the equipment and
machinery guarded, so as not to frustrate the order of seizure issued by the trial court.
But acting upon the directives of the president of the Petitioner, to seize the properties at
any costs, in issuing the order sought to be annulled, had not committed abuse of
discretion at all or acted in an arbitrary or despotic manner, by reason of passion or
personal hostility; on the contrary, it issued said order, guided by the well known
principle that of the property has to be returned, it should be returned in as good a
condition as when taken (Bachrach Motor Co., Inc., vs. Bona, 44 Phil., 378). If any one
had gone beyond the scope of his authority, it is the respondent Provincial Sheriff. But
considering that fact that he acted under the pressure of Ramon S. Roco, and that the
order impugned was issued not by him, but by the respondent Judge, We simply declare
that said Sheriff' act was most unusual and the result of a poor judgment. Moreover, the
Sheriff not being an officer exercising judicial functions, the writ may not reach him,
for certiorari lies only to review judicial actions.

The Petitioner complains that the respondent Judge had completely disregarded his
manifestation that the machinery and equipment seized were and still are the
Petitioner's property until fully paid for and such never became immovable. The
question of ownership and the applicability of Art. 415 of the new Civil Code are
immaterial in the determination of the only issue involved in this case. It is a matter of
evidence which should be decided in the hearing of the case on the merits. The question
as to whether the machinery or equipment in litigation are immovable or not is likewise
immaterial, because the only issue raised before the trial court was whether the
Provincial Sheriff of Bulacan, at the Petitioner's instance, was justified in destroying the
machinery and in refusing to restore them to their original form , at the expense of the
Petitioner. Whatever might be the legal character of the machinery and equipment,
would not be in any way justify their justify their destruction by the Sheriff's and the
said Petitioner's. (Petitioner's brief, Appendix A, pp. IV-VII.)

A motion for reconsideration of this decision of the Court of Appeals having been denied ,
petitioner has brought the case to Us for review by writ of certiorari. Upon examination of the
record, We are satisfied, however that the Court of Appeals was justified in dismissing the case.
The special civil action known as replevin, governed by Rule 62 of Court, is applicable only to
"personal property".

Ordinarily replevin may be brought to recover any specific personal property


unlawfully taken or detained from the owner thereof, provided such property is capable
of identification and delivery; but replevin will not lie for the recovery of real property or
incorporeal personal property. (77 C. J. S. 17) (Emphasis supplied.)

When the sheriff repaired to the premises of respondent, Ipo Limestone Co., Inc., machinery
and equipment in question appeared to be attached to the land, particularly to the concrete
foundation of said premises, in a fixed manner, in such a way that the former could not be
separated from the latter "without breaking the material or deterioration of the object." Hence,
in order to remove said outfit, it became necessary, not only to unbolt the same, but , also, to cut
some of its wooden supports. Moreover, said machinery and equipment were "intended by the
owner of the tenement for an industry" carried on said immovable and tended." For these
reasons, they were already immovable property pursuant to paragraphs 3 and 5 of Article 415
of Civil Code of the Philippines, which are substantially identical to paragraphs 3 and 5 of
Article 334 of the Civil Code of Spain. As such immovable property, they were not subject to
replevin.

In so far as an article, including a fixture annexed by a tenant, is regarded as part of the


realty, it is not the subject for personality; . . . .

. . . the action of replevin does not lie for articles so annexed to the realty as to be part as
to be part thereof, as, for example, a house or a turbine pump constituting part of a
building's cooling system; . . . (36 C. J. S. 1000 & 1001)

Moreover, as the provincial sheriff hesitated to remove the property in question, petitioner's
agent and president, Mr. Ramon Roco, insisted "on the dismantling at his own responsibility,"
stating that., precisely, "that is the reason why plaintiff posted a bond ." In this manner,
petitioner clearly assumed the corresponding risks.

Such assumption of risk becomes more apparent when we consider that, pursuant to Section 5
of Rule 62 of the Rules of Court, the defendant in an action for replevin is entitled to the return
of the property in dispute upon the filing of a counterbond, as provided therein. In other words,
petitioner knew that the restitution of said property to respondent company might be ordered
under said provision of the Rules of Court, and that, consequently, it may become necessary for
petitioner to meet the liabilities incident to such return.

Lastly, although the parties have not cited, and We have not found, any authority squarely in
point — obviously real property are not subject to replevin — it is well settled that, when the
restitution of what has been ordered, the goods in question shall be returned in substantially the
same condition as when taken (54 C.J., 590-600, 640-641). Inasmuch as the machinery and
equipment involved in this case were duly installed and affixed in the premises of respondent
company when petitioner's representative caused said property to be dismantled and then
removed, it follows that petitioner must also do everything necessary to the reinstallation of
said property in conformity with its original condition.
Wherefore, the decision of the Court of Appeals is hereby affirmed, with costs against the
petitioner. So ordered.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-17393 July 21, 1921

BACHRACH MOTOR COMPANY, INC., plaintiff,


vs.
RICARDO SUMMERS, defendant.
Gibbs, McDonough and Johnson and Benedicto M. Javier for plaintiff.
Claro M. Recto and Jose M. Casal for defendant.

STREET, J.:

On March 9, 1920, Elias Aboitiz executed a chattel mortgage upon a Nash automobile, bearing
the Factory No. 143643, in favor of the Bachrach Motor Company, Inc., to secure a debt for
P3,675, payable in twelve installments. In the month of November of the same year, the
mortgagor defaulted in the payment of the installment for that month; and as a consequence the
Motor Company determined to have the car sold for the purpose of foreclosing the mortgage, in
the manner prescribed in section 14 of the Chattel Mortgage Law (Act No. 1508). It accordingly
requested Ricardo Summers, as sheriff of the city of Manila, to take the car from the debtor and
to expose it to public sale, as provided in said section. Acting in pursuance of this authority the
sheriff applied to the mortgagor for the automobile; but the mortgagor refused to surrender
possession; and the Motor Company instituted an action of replevin to recover the car.
However, its effort to get possession were again destined to be temporarily baffled, as Aboitiz
gave bond for the retention of the automobile pendente lite. The Motor Company thereupon filed
the present petition in this court for the writ of mandamus to compel the sheriff to seize the car
from the mortgagor and sell it. To this petition the sheriff demurred, and the cause is now
before us for the determination of the issues thus presented.

The question to which we shall first address ourselves — and which is really the vital point in
the case — is whether, after default by the mortgagor in the performance of the conditions of a
chattel mortgage, the sheriff is unconditionally bound to seize the mortgaged property, at the
instance of the creditor, and sell it to satisfy the debt. The petitioner supposes that the sheriff
must so proceed and that, upon failure to do so, he can be compelled thereto by the writ
of mandamus.
In commercial usage the property which is the subject of a chattel mortgage is, as well known,
almost invariably left in the possession of the mortgagor, and this possession is not disturbed
until the mortgagor defaults in the payment of the secured debt or otherwise fails to comply
with the condition of the mortgage.

When default occurs and the creditor desires to foreclose, he must necessarily take the
mortgaged property into his hands; and his right to do this is clearly implied in the provision
which gives the right to sell. Says the statue: "The mortgagee . . . may, after thirty days from the
time of condition broken, cause the mortgaged property, or any part thereof, to be sold at public
auction by a public officer at a public place in the municipality where the mortgagor resides,"
etc. (Sec. 14, Act No. 1508.) As will be seen, this provision supposes that the creditor has
possession of the mortgaged property, for the power to sell imports a power to make delivery of
the thing sold to the purchaser; and without actual possession delivery would be impossible.
The right of the mortgagee to have possession after condition broken must therefore be taken to
be unquestionable; and to this effect is the great weight of American authority. (11 C.J., 560; 28
Am. and Eng. Encyc. of Law, 2d ed., 782; 5 R.C., 462; St. Mary's Machine Co. vs. National
Supply Co., 96 Am. St. Rep., 677, 684, note.)

Where, however, the debtor refuses to yield up the property, the creditor must institute an
action, either to effect a judicial foreclosure directly, or to secure possession as a preliminary to
the sale contemplated in the provision above quoted. He cannot lawfully take the property by
force against the will of the debtor. Upon this point the American authorities are even more
harmonious than they are upon the point that the creditor is entitled to possession. As was said
many years ago by the writer of this opinion in a monographic article contributed to an
encyclopedic legal treatise, "if possession cannot be peaceably obtained the mortgagee must
bring an action." (Trust Deeds and Power of Sale Mortgages, 28 Am. and Eng. Encyc. of Law, 2d
ed., 783.) In the article on Chattel Mortgages, in Corpus Juris, we find the following statement of
the law on the same point: "The only restriction on the mode by which the mortgagee shall
secure possession of the mortgaged property after breach of condition is that he must act in an
orderly manner and without creating a breach of the peace, subjecting himself to an action for
trespass." (11 C.J., 560; see also 5 R.C.L., 462.)

The reason why the law does not allow the creditor to possess himself of the mortgaged
property with violence and against the will of the debtor is to be found in the fact that the
creditor's right of possession is conditioned upon the fact of default, and the existence of this
fact may naturally be the subject of controversy. The debtor, for instance, may claim in good
faith, and rightly or wrongly, that the debt is paid, or that for some other reason the alleged
default is nonexistent. His possession in this situation is as fully entitled to protection as that of
any other person, and in the language of article 446 of the Civil Code he must be respected
therein. To allow the creditor to seize the property against the will of the debtor would make
the former to a certain extent both judge and executioner in his own cause — a thing which is
inadmissible in the absence of unequivocal agreement in the contract itself or express provision
to that effect in the statute.

It will be observed that the law places the responsibility of conducting the sale upon "a public
officer;" and it might be supposed that an officer, such as the sheriff, can seize the property
where the creditor could not. This suggestion is, we think, without force, as it is manifest that
the sheriff or other officer proceeding under the authority of the language already quoted from
section 14 of the Chattel Mortgage Law, becomes pro hac vice the mere agent of the creditor.
There is nothing in this provision which creates a specific duty on the part of the officer to seize
the mortgaged property; and no intention on the part of the law-making body to impose such a
duty can be implied. The conclusion is clear that for the recovery of possession, where the right
is disputed, the creditor must proceed along the usual channels by action in court. Whether the
sheriff, upon being indemnified by the creditor, could safely proceed to take the property from
the debtor, is a point upon which we express no opinion.

In the brief of counsel attention is directed to the circumstance that in section 3 of Act No. 1508,
the chattel mortgage is said to be a conditional sale; and an inference is drawn therefrom
supposedly favorable to the contention of the petitioner. It is undeniable that the language there
used supports the view that the mortgagee is the owner of the mortgaged property and
therefore entitled to possession after condition broken, but that provision is in no wise
concerned with the problem as to how possession may be acquired if the mortgagor refuses to
yield it up. In this connection a few words of comment exhibiting the true import of that
provision will not be out of place. The language referred to is as follows:

Sec. 3. A chattel mortgage is a conditional sale of personal property as security for the
payment of a debt, or the performance of some other obligation specified therein, the
condition being that the sale shall be void upon the seller paying to the purchaser a sum
of money or doing some other act named. If the condition is performed according to its
terms the mortgage and sale immediately become void, and the mortgagee is thereby
divested of its title.

The use of the term conditional sale in connection with the chattel mortgage is apt to be
misleading to a person unacquainted with the common-law history of the contract of mortgage;
and it is unfortunate that such an expression should have been incorporated in a statute
intended to operate in the Philippine Islands. As will be readily seen, the idea is totally foreign
to the conception of the mortgage which is entertained by the civil law. What is worse it does
not even reflect with fidelity the actual state of the American and English law on the same
subject.

Rightly understood, in connection with the common-law history of the mortgage, the meaning
of the section quoted may be exhibited in some such proposition as the following:

A chattel mortgage is a contract which purports to be, and in form is, a sale of personal property,
intended as security for the payment of a debt, or the performance of some other obligation
specified therein, upon the condition subsequent that such sale shall be void upon payment of
the debt or performance of the specified obligation according to the terms of the contract.

Now, while the proposition which we have here formulated contains a true description of the
external features of the chattel mortgage, it does not by any means embody a correct statement
of its judicial effects. A visit to any recorder's office in a common-law State will supply
abundant proof that chattel mortgages are commonly drawn in the form of a straight sale, to
which a clause of defeasance is added, declaring that in case the debt is paid or other obligation
performed the contract will be void. But the form of the contract is merely a heritage from the
remote past, and does not be any means reveal the exact import of the transaction. Every
person, however superficially versed in American and English law, knows that in equity the
mortgage, however drawn, is to be treated as a mere security. The contract in fact merely
imposes on the mortgaged property a subsidiary obligation by which it is bound for the debt or
other principal obligation of the mortgagor. This is the equitable conception of the mortgage;
and ever since the English Court of Chancery attained to supremacy in this department of
jurisprudence, mortgages have been dealt with in this sense in every land where English law
has taken root. The old formulas may, it is true, remain, but a new spirit has been breathed into
them. And of course sooner or later the ancient forms are discarded. Look, for instance, at the
form of a chattel mortgage given in section 5 of Act No. 1508, where it is said that the mortgagor
"conveys and mortgages." This means "conveys by way of mortgage;" and the word
"mortgages" alone would of course be equally effective. In fact we note that in the contract
executed in the present case, it is merely said that Elias Aboitiz "mortgages" the automobiles to
which the contract relates. In describing the chattel mortgage as a conditional sale we are
merely rattling the bones of an antiquated skeleton from which all semblance of animate life has
long since departed. The author of Section 3 of the Chattel Mortgage Law was most unhappy in
his effort to elucidate to civilian jurists the American conception of the contract of mortgage.

But whatever conclusion may be drawn in the premises with respect to the true nature of a
chattel mortgage, the result must in this case be the same; for whether the mortgagee becomes
the real owner of the mortgaged property — as some suppose — or acquires only certain rights
therein, it is none the less clear that he has after default the right of possession; though it cannot
be admitted that he may take the law into his own hands and wrest the property violently from
the possession of the mortgagor. Neither can he do through the medium of a public officer that
which he cannot directly do himself. The consequence is that in such case the creditor must
either resort to a civil action to recover possession as a preliminary to a sale, or preferably he
may bring an action to obtain a judicial foreclosure in conformity, so far as practicable, with the
provisions of the Chattel Mortgage Law.

Only a few words will be added with reference to the question whether this court has
jurisdiction to entertain the present proceeding. In this connection it is insisted by the attorneys
for the respondent that the sheriff is an officer of the Court of First Instance and the petitioner
should, so it is insisted, address himself to that court as the proper court to control the activities
of the sheriff. While this criticism would be valid if the purpose were to control the sheriff in the
matter of carrying into effect any judgment, order, or writ of a Court of First Instance, it is not
applicable in a case like the present where the act to be done is defined by general law and has
no relation to the office of sheriff as the executive officer of the Court of First Instance. As to
such activities this court must be considered to have concurrent jurisdiction with the Court of
First Instance under section 515 of the Code of Civil Procedure.

The demurrer must be sustained, and the writ prayed for will be denied. It is so ordered, with
costs against the petitioner.

Mapa, C.J., Araullo, Avanceña and Villamor, JJ., concur.


Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

A.M. No. P-91-549 July 5, 1993

REYNALDO SEBASTIAN, complainant,


vs.
SHERIFF ALBERTO A. VALINO, respondent.
Bautista, Picaso, Buyco, Tan & Fider Law Offices for complainant.

Teresita G. Oledan for respondent.

QUIASON, J.:

Marblecraft, Inc., represented by its Assistant General Manager, Reynaldo Sebastian, charges
Alberto A. Valino, Senior Deputy Sheriff, Office of the Regional Sheriff, Pasig, Metro Manila,
with (1) gross abuse of authority committed in connection with the implementation of the writ
issued by the Regional Trial Court, Makati, Metro Manila, in Civil Case No. 89-3368, and (2)
refusal to enforce the trial court's for the return of the seized items.

Complainant alleges that:

1. On March 3, 1989, Private Development Corporation of the Philippines (PDCP) filed a


replevin suit against Marblecraft, Inc., in Civil Case No. 89-3368, in order to foreclose the
chattels mortgaged by Marblecraft. On March 30, 1989, the Regional Trial Court, Makati, issued
a writ of seizure directed against Marblecraft covering the chattels sought to be replevied.

2. The enforcement of the writ of seizure was delayed because of the writ of preliminary
injunction enjoining PDCP from proceeding with the foreclosure sale issued by the Regional
Trial Court, Pasig, Metro Manila in Civil Case No. 58006, It was only on October 31,1990, when
the Regional Trial Court, Pasig, dissolved the writ of preliminary injunction.

3. On November 9, 1990, at around 10:37 A.M., respondent, accompanied by several policemen


and PDCP employees, went to the office of Marblecraft at Barrio Santolan, Pasig, to implement
the writ of seizure. Respondent and his companions forcibly opened the lockers and desk
drawers of the employees of complainant and took their personal belongings, as well as some
office equipment issued to them. The employees filed with the Office of the Provincial
Prosecutor of Rizal two criminal complaints for robbery against respondent and his
companions.

4. Respondent only showed to complainant's counsel a copy of the writ but did not furnish him
with a copy of the application for the writ, the supporting affidavit and the bond.

5. In the course of the implementation of the writ, which lasted for four days, several pieces of
machinery and equipment were destroyed or taken away by respondent.

6. Respondent turned over the seized articles to the counsel of PDCP and allowed these items to
be stored in PDCP's warehouse in Taguig, Metro Manila.

7. On November 14, 1990, complainant posted a counterbond. In an order issued on the same
day, the Regional Trial Court, Makati, approved the bond and directed the immediate return of
the seized items. After denying PDCP's motion to set aside the November 14 Order, the trial
court reiterated the directive for the return of the seized items in its November 26 Order.
Respondent did not implement the orders.

8. PDCP filed a motion for reconsideration of the November 26 Order, which was denied in an
Order dated December 11, 1990.

In his comment, respondent branded the administrative complaint against him as pure
harassment filed by Marblecraft after he had refused to defer the implementation of the writ of
seizure. He said that if he did not implement the writ, he would have been accused by PDCP of
non-performance of his duties as a sheriff. He pointed out that the criminal complaints for theft
filed against him by the employees of complainant were dismissed by the Provincial Prosecutor
of Rizal.

The administrative complaint was referred to Judge Martin S. Villarama Jr. of the Regional Trial
Court, Pasig, for investigation, report and recommendation.

In his report, Judge Villarama, found respondent guilty of partiality when he immediately
turned over the seized items to PDCP, and of willful refusal to enforce the November 14, 26 and
December 11, 1990 Orders of the Regional Trial Court, Makati.

Under the Revised Rules of Court, the property seized under a writ of replevin is not to be
delivered immediately to the plaintiff. The sheriff must retain it in his custody for five days and
shall return it to the defendant, If the latter, as in the case, requires its return and files a
counterbond (Sec. 4, Rule 60, Revised Rules of Court). In violation of said Rule, respondent
immediately turned over the seized articles to PDCP. His claim that the Office of the Regional
Sheriff did not have a place to store the seized items, cannot justify his violation of the Rule. As
aptly noted by the Investigating Judge, the articles could have been deposited in a bonded
warehouse.

Respondent must serve on Marblecraft not only a copy of the order of seizure but also a copy of
the application, affidavit and bond (Sec. 4, Rule 60, Revised Rules of Court). Respondent did not
furnish defendant with a copy of the application, affidavit and bond. By his own admission, he
only served it with a copy of the order of seizure (Rollo, p. 37).

The more serious infraction of respondent is his refusal to implement the order of the Regional
Trial Court, Makati for him to return to complainant the articles seized pursuant to the writ of
seizure dated March 30, 1990.

The Order dated November 14, 1990 directed him "to immediately return to defendant all its
properties seized and taken from its premises pursuant to the writ of seizure of March 30, 1989,
from receipt of this Order (sic)" (Rollo,
p. 42)

The Order dated November 26, 1990 directed him "to implement the Order of this Court dated
November 14, 1990 and to immediately return to defendant all its properties seized and taken
from its premises pursuant to the writ of seizure dated March 30, 1989 from receipt of this
Order (sic)" (Rollo,
p. 44).

The Order dated December 11, 1990 directed him "to implement the Order of this Court dated
November 26, 1990, within three (3) days from the receipt hereof, otherwise this Court will be
constrained to appoint and deputize another sheriff to implement the order dated November
26, 1990" (Rollo, p. 47).

The only action taken by respondent to implement the Order dated December 11, 1990 was to
write a letter on December 12, 1990, addressed to the counsel of PDCP, requesting the turnover
of seized articles. As expected, PDCP's counsel refused to part with the possession of the seized
articles and to issue a letter of authorization to withdraw the same from the warehouse. Instead
of taking possession of the articles, respondent merely reported to the Regional Trial Court that
"[i]t is now clear that the undersigned cannot implement the Court order dated December 11,
1990 by reason of the refusal of PDCP to accept or to honor said Court order" (Rollo, p.48).

The petition for certiorari of PDCP to question the orders of the Regional Trial Court, Makati,
was filed with the Court of Appeals only on December 17, 1990. The Court of Appeals issued a
temporary restraining order only on December 21, 1990. Respondent therefore had more than
seven days within which to enforce the orders of the trial court if he was minded to do so.

Respondent could have avoided getting into his present predicament had he not turned over
the possession of the seized goods prematurely to the PDCP.

The complainant cannot be blamed if it harbored the suspicion that respondent was beholden to
PDCP. The zeal with which respondent enforced the order of seizure in favor of PDCP was in
sharp contrast with his inaction in enforcing the three orders of the trial court directing him to
return the seized items to complainant.

It is not for respondent to question the validity of the orders of the trial court. It is for him to
execute them. As observed by the Investigating Judge, "[t]here is therefore no excuse for
respondent's wilfull refusal to implement the Order of the Court" (Report and
Recommendation, p. 10). Disobedience by court employees of orders of the court is not
conducive to the orderly administration of justice. The display of partially in favor of a party as
against the other party erodes public confidence in the integrity of the courts.

IN VIEW OF THE FOREGOING, the Court finds respondent guilty of serious misconduct and
RESOLVED to impose upon him the penalty of FOUR (4) MONTHS SUSPENSION without
pay, the period of which should not be charged to his accumulated leave, with a WARNING
that a repetition of the same or of acts calling for disciplinary action will be dealt with more
severely. This resolution is IMMEDIATELY EXECUTORY, and respondent is hereby ordered to
forthwith desist from performing any further official functions appertaining to said office.

SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 88938 June 8, 1992

LA TONDEÑA DISTILLERS, INC., petitioner,


vs.
COURT OF APPEALS, NATIVIDAD ADDURU SANTILLAN, Judge, Branch 38,
RTC, Manila, DEPUTY SHERIFF REGIO RUEFA and TEE CHIN
HO, respondents.

NARVASA, J.:

The appellate proceedings at bar originated from an action of "replevin with damages" instituted
in the Regional Trial Court of Manila by La Tondeña Distillers, Inc. against a person named "Te
Tien Ho," described in the complaint as a "junk dealer" or owner of a "second hand store" with
"office bodega at 1005 Estrada St., Singalong, Manila." The action was docketed as Civil Case
No. 89-47768 and assigned to Branch 38 of the Manila RTC, presided over by Hon. Natividad G.
Adduru-Santillan.

In its verified complaint, 1 La Tondeña Distillers, Inc. (hereafter, simply La Tondeña) set out the
following facts, to wit:
1) that "it manufactures and sells . . . a gin popularly known as "Ginebra San
Miguel," which is contained in 350 c.c. white flint bottles with the marks of
ownership "LA TONDEÑA, INC." and "GINEBRA SAN MIGUEL" stamped or
blown-in to the bottles which . . . (it [La Tondeña]) specially ordered from the
bottle manufactures for its exclusive use;"

2) that said white flint bottles were registered with the Philippine Patent Office
by La Tondeña's predecessor-in-interest in accordance with Republic Act No.
623, 2 as amended, 3 the registration having thereafter been renewed and being
valid and subsisting;

3) that use of the registered bottles by any one without written permission of the
owner is declared unlawful by Section 2 of R.A. 623, as amended, pertinently
reading as follows:

SEC. 2. It shall be unlawful for any person, without the written


consent, of the manufacturer, bottler, or seller, who has
successfully registered the marks of ownership in accordance with
the provisions of the next preceding section, to fill such bottles . . .
for the purpose of sale or to sell, dispose of, buy or traffic in or
wantonly destroy the same, whether filled or not . . .

4) that, the sale of the gin in the registered white flint, bottles does not include
the sale of the bottles themselves; in fact, La Tondeña's "sales invoices never
specified that the sale of the beverage includes the sale of the container;" and

5) that the defendant "Te Tien Ho" has in his possession a quantity of the
registered bottles worth P20,000.00,

and on the basis of these facts, prayed that:

(a) Upon the filling and approval of a bond in the amount of P40,000.00, . . . (the)
Court, issue an order directing the, Sheriff or other proper officer . . . to take into
his custody all the 350 c.c. bottles of the plaintiff in the possession of the
defendant . . . and to dispose of the same in accordance with the rules of court;

(b) After trial plaintiff be adjudged the lawful owner possessor of the said bottles
and . . . judgment (be rendered) in the alternative against the defendant for the
delivery thereof to plaintiff, or for the payment . . . of the value thereof in case
delivery, cannot be made;" and

(c) Defendant, be made to pay, actual, nominal and temperate and exemplary
damages in specific stated amounts (aggregating P75,400.00), as well as
attorney's fees in the amount of P50,000.00.

Judge Santillan issued the writ of delivery prayed for on February 13, 1989 upon La Tondeña's
posting of a bond in the amount of P40,000.00. In implementation of the writ, Deputy Sheriff
Regio Ruefa seized on February 22, 1989 20,250 bottles with the blown-in marks, "La Tondeña
Inc." and "Ginebra San Miguel" from No. 1105 Estrada St. Singalong. 4 On that occasion Mr. Ruefa
executed a handwritten "Receipt" of the following tenor: 5

RECEIVED FROM MR. TE TIEN HO 405 BOXES/50 . . . (20,250) bottles, pieces


350 c.c. bottles, marks BLOWN-IN "LA TONDEÑA INC. and GINEBRA San
Miguel" subject of the Order of seizure in Civil Case No. 89-47768 entitled "LA
TONDEÑA INC. vs. TE TIEN HO located at 1105 Estrada St. Singalong, Manila.

. . . . . Feb. 22, 1989.

FOR: THE SHERIFF OF MANILA

Note:

(405 boxes/50 OK EMPTY


20,250 bottles)

WITNESS BY:

(s) ALEXANDER ELLEVE 6


Plaintiff

(s) TEE CHIN HO 7


Defendant

It is noteworthy that Tee Chin Ho, denominated "defendant," signed Sheriff Ruefa's receipt as a
witness. He does not deny his intervention in the receipt and in fact, as will shortly be narrated,
insists that it was from him that the bottles were seized. Furthermore, Sheriff Ruefa's return
dated March 3, 1989 attests that prior to seizing the bottles, he served summons, copy of the
complaint and its annexes, copy of the bond, and the writ of seizure personally on defendant Te
Tien Ho, 8 who requested his wife Perla Diolesa to sign his name on the original copy of the
summons and the writ of seizure for and in his own behalf, such service and implementation of
the writ of seizure having been effected "at 1105 Estrada St., Singalong, Manila and not at 1005
Estrada St., Singalong, Manila, as evidence(d) by the signature appearing on the original
summons and writ." 9

The five-day period prescribed by law within which the sufficiency of the replevin bond might
be objected to or the return of the property seized required 10 expired without any person
objecting to the bond or seeking the return of the bottles. Instead an individual identifying
himself as "Tee Chin Ho" filed on March 1, 1989 a pleading denominated "ANSWER (with
preliminary injunction and compulsory counterclaim)," 11 which opened with a plea that he be
given "leave to intervene as party who has legal interest in the matter in litigation" such that he
would be adversely affected by a distribution or disposition of the property in litigation and a
declaration that he was submitting the answer "as party-intervenor." The answer asserted that

1) all purchases of La Tondeña's gin necessarily included the bottles containing the gin; hence
ownership of the bottles did not remain in La Tondeña but was transferred to the purchasers;

2) it was from him, Tee Chin Ho, and not from Te Tien Ho, that the bottles in question had been
taken by Sheriff Ruefa, and the taking had occurred at 1105 Estrada Street (his [Tee Chin Ho's]
place of business) and not at 1005 Estrada Street the address given in the complaint; and

3) La Tondeña had "masterminded and caused two instances of seizure against


intervenor, first through and by the Manila City, police, and second through the Court's sheriff
(copies of the receipts of seizures . . . (being attached to and made parts of the answer) as
Annexes "5" and "6" 12)". 13 Parenthetically, the text of the receipt, Annex 6, has already been set
out herein, supra 14 The other receipt, drawn up on October 6, 1988 — about four months earlier
— and referred to as Annex 5 — reads as follows:

DATE OCT. 6, 1988


TIME 9: FROM: TEE CHIN HO JUNK SHOP

ITEMS: QUANTITY:

432 x 50 (pcs. 21,600)

GMS ROUND 350 ml


GMS FRASCO 700 ml
GMS . . . 350 ml
AÑEJO FLAT 375 ml
AÑEJO OVAL 750 ml

ISSUED BY: (s) PAT. BENITO DE LEON

RECEIVED BY: (s) F. LAZARO 10/6/88

and, on the basis of the foregoing allegations, prayed "for the issuance forthwith of a
writ of preliminary investigation and prohibitory injunction . . . and, after due
proceedings, that said writs be made permanent and that judgment be issued dismissing
the complaint and, with respect to intervenor's compulsory counterclaim, that awards be
made for actual damages in the sum of P300,000.00, moral damages in the sum of
P1,000,000.00, exemplary damages in the sum of P2,000,000.00, and P100,000.00 to cover
attorney's fees and litigation expenses . . ."

On March 3, 1989 the Sheriff delivered the 20,250 empty bottles seized by him to La Tondeña. 15

The Court set Tee Chin Ho's application for injunction for hearing on March 17, 1989 but by
Order of the same date, reset the hearing to April 3, 1989 to give La Tondeña time to file a reply.
It however issued on the same day, April 3, 1989, a temporary restraining order "to preserve
the status quo and to prevent further damages, . . . (enjoining) the plaintiff, or other reasons
acting for and in its behalf, from seizing or otherwise confiscating any bottles subject of the writ
of seizure dated February 20, 1989 from the movant Tee Chin Ho of 1105 Estrada Street,
Singalong, Manila, until further orders . . . 16

La Tondeña filed its Reply on March 1, 1989 and its opposition to the application for injunction
on April 3, 1989 17 —which latter date, as aforestated, was the date to which Tee Chin Ho's
application for injunction was reset. La Tondeña also filed, under date of April 5, 1989, a
"Motion to Admit Attached Amended Complaint with Motion to Dismiss Motion for
Intervention and Petition for Preliminary Injunction," which it set for hearing on April 10, 1989
at 8:30 A.M. 18 In this motion La Tondeña alleged inter alia that Tee Chin Ho's answer-in-
intervention had not yet been admitted (the implication clearly being that it still could amend
its complaint as a matter of right 19 ); that the amendment it wished to make in its complaint
consisted merely in correcting the "spelling in the name of the defendant as well as his address,"
considering that as shown by the receipts annexed to the answer-in- intervention, "Tee Chin Ho
with address at 1105 Estrada St., Singalong, Manila and Te Tien Ho with address at 1005
Estrada St., Singalong, Manila, . . . (are) one and the same person;" and that Tee Chin Ho had
"waived his right to question the incorrect spelling of the name . . . and . . . address when he
voluntarily signed the sheriffs receipt dated February 22, 1989 through his wife . . ."

On April 7, 1989, Judge Adduru-Santillan promulgated an Order ruling "for intervenor Tee
Chin Ho" and directing issuance of "a writ of preliminary prohibitory injunction and a writ of
preliminary mandatory injunction . . . as prayed for in the answer in intervention, upon
intervenor's filing a bond in the amount of Forty-Five Thousand Pesos (P45,000.00)." The Order
was made to rest on the following findings, to wit:

. . . that the seizure authorized by the Court's writ of replevin is only against the
person whose name and address is pleaded in the complaint namely TE TIEN
HO at No. 1005 Estrada St., Singalong, Manila; the two truckloads empty bottles
seized by the Manila Police (Exhibit "4") and by the Sheriff of Manila (Exhibit "5")
from intervenor Tee Chin Ho, is improper and unlawful; intervenor Tee Chin Ho
possessor of the two truckloads of empty bottles is presumed under the civil law
as the owner thereof (Article 433 and 541, Civil Code); that even under Republic
Act 623, as amended by Republic Act 5700, the fact that the law provides that the
sale of the bottled products does not ipso jure carry with it the sale of the bottle
yet the same law negates any right of action of plaintiff manufacturer and seller
to recover the empty bottles from "any person to whom the registered
manufacturer . . . seller has transferred . . . any of the containers (Section 5) and,
moreover, the statute expressly exempts from its coverage the use of bottles as
containers for "sisi," "bagoong," "patis," and similar native products" (Section 6);
and that the due process clause protects intervenor in his right to earn his
livelihood through engagement in his junk shop business (Quisumbing and
Fernando, Philippine Constitutional Law, p. 80).

Then Judge Adduru-Santillan issued the "writ, of mandatory and prohibitory injunction" on
April 11, 1989 —

1) "ordering plaintiff La Tondeña Distillers, Inc., its agents, duly authorized


representatives or other persons acting for and in its behalf to return and restore
unto intervenor Tee Chin Ho at his address at 1105 Estrada St., Singalong,
Manila, all 41,850 empty bottles/containers with blown up mark "La Tondeña
Inc." and "Ginebra San Miguel" seized from intervenor mentioned in Annexes "4"
and "5" of the answer-in-intervention;" and

2) enjoining plaintiff from using, employing, inducing, corrupting or otherwise


causing members of the Manila Police Force and/or other persons for the
purpose of seizing bottles/containers bearing the mark; "La Tondeña Inc." or
"Ginebra San Miguel" found in intervenor's possession at his address at 1105
Estrada St., Singalong, Manila, until further orders . . .

Earlier, on April 10, 1989, at the hearing of La Tondeña 's motions (a) to dismiss
application for injunction and (b) to amend its complaint Judge Adduru-Santillan
informed the parties that the motion to amend complaint was deemed "submitted for
resolution but that (s)he had already granted the petition for the issuance of preliminary
mandatory and prohibitory injunction, . . . (and that) effective April 26, 1989, she will not
be holding trial due to her application for retirement." 20 La Tondeña learned on the
same day that by Order dated April 7, 1989, the Judge had admitted Tee Chin Ho's
answer in intervention. 21

This Order La Tondeña assailed in the Court of Appeals. On April 19, 1989, it filed with that
Court a petition "for Certiorari, Prohibition and Mandamus with Preliminary Prohibitory and
mandatory Injunction and/or Temporary Restraining Order." 22 In its petition, it alleged that
Judge Santillan had in effect adjudicated the case on the merits without trial; she has ignored
and failed to apply, or grossly misconstrued, the relevant provisions of R.A. 623, as amended;
she had disregard circumstances on record showing that Te Tien Ho and Tee Chin Ho are one
and the same person; she had, albeit utterly without authority, taken cognizance of and passed
upon the alleged seizure by the Manila Police of bottles from Tee Chin Ho on another, earlier
occasion; and she "should have disqualified herself from acting on the petition or at least
requested that it be transferred to her pairing judge." La Tondeña thus prayed for judgment
"declaring null and void and of no effect and force the order dated April 7, 1989 . . . including
the writ of prohibitory, mandatory injunction dated April 11, 1989 and directing respondent
sheriff Rufio 23 Ruefa to refrain from enforcing the said writ, commanding the respondent judge
to desist from conducting any further proceedings in civil case no. 89-47768 . . ." It also prayed
for a temporary restraining order, which the Court of Appeals granted by Resolution dated
April 21, 1989 "in order not to render moot and academic the issue/issues raised . . ."24

The Court of Appeals promulgated its judgment on these case on May 18, 1989. 25 It dismissed
La Tondeña's petition. It declared that the petition did "not prima facie" reveal such sufficiency in
substance as would merit its being given due course;" that even "granting arguendo that the
errors pointed out by petitioner had indeed attended respondent Judge's issuance of the
assailed Order, these errors cannot be corrected by means of certiorari, . . . the appropriate
remedy . . . being a timely appeal from the judgment on the merits;" and that the "solidly
grounded and well-reasoned discussion of respondent Judge (in her challenged order) . . .
cannot be consistent with a finding . . . that she indulged in a whimsical and capricious or
arbitrary and despotic exercise of judgment, characteristic of the grave abuse of discretion
calling for
certiorari," 26

La Tondeña filed a motion for reconsideration of the decision 27 which was denied by
Resolution dated June 29, 1989. 28 It then seasonably appealed to this Court in certiorari; and here
it ascribes several errors to the Court of Appeals, i.e., in not finding that —

1.) . . . the Respondent Judge acted without jurisdiction and with grave abuse of discretion in
including in . . . (her) order the return of 21,600 registered bottles allegedly seized by the Manila
Police on October 6, 1988, which were not the subject of the case and not within the jurisdiction
of the trial court;

2) the respondent Judge had violated fundamental rules on injunctions, viz.:

a) that, a mandatory injunction shall not issue in favor of a party whose rights are
not clear;

b) that no advantage may be given (by an injunction to one (party) to the


prejudice of the other;"

c) that, (an injunction's) primary purpose is to preserve the status quo;

3) . . . the Respondent Judge violated a rule on Replevin that the disposition of a property seized
under a replevinorder upon the defendant shall be done only within 5 days from date of seizure;

4) . . . the Respondent Judge utterly failed to apply the law in question, RA 623 as amended by
RA 5700;

5) . . . the act of Respondent Judge in . . . granting the preliminary injunction was tainted with
procedural infirmities;" and

6) Tee Chin Ho and Te Tien Ho are one and the same person.

A defendant or other party in a replevin proceeding against whom a writ of seizure has the
following alternative remedies set forth in Section 5, Rule 60 of the Rules of Court, viz.:

SEC. 5. Return, of property. — If the defendant objects to the sufficiency of the


plaintiff's bond, or of the surety or sureties thereon, he cannot require the return
of the property as in this section provided; but if he does not so object may, at
any time before the delivery of the property to the plaintiff require the return
thereof, by filing with the clerk or judge of the court a bond executed to the
plaintiff in double the value of the property as stated in the plaintiff affidavit, for
the delivery of the property to the plaintiff, if such delivery be adjudged, for the
payment of such sum to him as may be recovered against the defendant, and by
serving a copy of such bond on the plaintiff or his attorney.
The defendant may avail of these alternative options only within five (5) days after the taking of
the property by the officer. This was made plain albeit impliedly by Section 6 of the same Rule,
providing as follows: 29

SEC. 6 Disposition of property by officer. — If within five (5) days after the taking of the
property by the officer, the defendant does not object to the sufficiency of the bond,
or of the surety or sureties thereon, or require the return of the property as
provided in the last preceding section; or if the defendant so objects, and the
plaintiff's first or new bond is approved; or if the defendant so requires, and his
bond is objected to and found insufficient and he does not forthwith file an
approved bond, the property shall be delivered to the plaintiff. If for any reason,
the property is not delivered to the plaintiff, the officer must return it to the
defendant.

Thus if a defendant in a replevin action wishes to have the property taken by the sheriff restored
to him, he should within five days from such taking, (1) post a counter-bond in double the value
of said property, 30 and (2) serve plaintiff with a copy thereof both requirements — as well as
compliance therewith within the five-day period mentioned — being mandatory. 31

Alternatively, "the defendant may object to the sufficiency of the plaintiff's bond, or of the
surety or sureties thereon;" but if he does so, "he cannot require the return of the property" by
posting a counter-bond pursuant to Sections 5 and 6.

In other words, the law does not allow the defendant to file a motion to dissolve or discharge
the writ of seizure (or delivery) — on the ground of insufficiency of the complaint or of the
grounds relied upon therefor, as in proceedings on preliminary attachment or injunction 32 and
thereby put at issue the matter of the title or right, of possession over the specific chattel
being replevied, the policy apparently being that said matter should be ventilated and
determined only at the trial on the merits.

On the other hand, a stranger to the action, i.e., a person not a party to the action, or as the law
puts it, "any other person than the defendant or his agent," whose property is seized pursuant to
the writ of delivery, is accorded the remedy known as terceria, a third party claim, to wit:

SEC. 7. Third-party claim. — If the property taken be claimed by any other person
then the defendant or his agent, and such person makes an affidavit of his title
thereto or right to the possession thereof, stating the grounds of such right or
title, and serves the same upon the officer while he has possession of the
property, and a copy thereof upon the plaintiff, unless the plaintiff or his agent,
on demand of the officer, indemnifies him against such claim by a bond in a sum
not greater than the value of the property, and in case disagreement as to such
value the same shall be decided by the court issuing the order. The officer is not
liable for damages for taking or keeping of such property, to any other person
than the defendant or his agent, unless such claim is so made and the action
upon the bond brought within one hundred and twenty (120) days from the date
of filing of the said bond. But nothing herein contained shall prevent such third
person from vindicating his claim to the property by any proper action.
However, when the plaintiff, or the person in whose behalf the order of delivery
was issued, is the Republic of the Philippines, or any officer duly representing it,
the filing of bond shall not be required, and in case the sheriff or the officer
executing the order is sued for damages as a result of such execution, he shall be
represented by the Solicitor General, and if held liable therefor, the actual
damages adjudged by the court shall be paid by the National Treasurer out of the
funds to be appropriated for the purpose.

The remedy is identical to that granted to strangers in a proceeding on preliminary


attachment or execution of judgments. 33

In lieu of, or in addition to the filing of a terceria, the third party may, as Section 7 points out,
vindicate "his claim to the property by any proper action." This effort at vindication may take
the form of a separate action for recovery of the property, or intervention in the replevin action
itself. 34

It was thus imperative for the Trial Judge, before ultimately resolving the motion for leave to
intervene as party defendant of the person identifying himself as "Tee Chin Ho," to determine
the precise status of said "Tee Chin Ho:" whether he was indeed a stranger to the action, as he
claims, and could therefore avail of the remedy of intervention as a party defendant, or he was
in truth a proper party defendant, who had been mistakenly and inadvertently referred to as
"Te Tien Ho", and who therefore only had the alternative remedies aforementioned of either (a)
objecting to the replevin bond or the surety or sureties thereof or (b) posting a counter-bond to
compel return of the property.

As of April 11, 1989, when the Trial Judge issued the "writ of mandatory and prohibitory
injunction," she was aware, or should have known, of certain facts in the record bearing
strongly on the identity of "Tee Chin Ho," namely: —

1) that "Tee Chin Ho" was actually served with summons at his junk shop at Estrada Street;

2) that the bottles described in La Tondeña's complaint and the writ of delivery were actually
found at his establishment, and were there seized;

3) that Tee Chin Ho's shop is the only junk shop on Estrada Street;

4) that "Tee Chin Ho" did not then protest to the sheriff he was not the defendant named in the
summons, "Te Tien Ho," or that his address was different from that indicated in the process;
instead he asked his wife to sign his name on the sheriff's receipt wherein he was described as
"defendant," as well "on the original copy of the summons and the writ of seizure for and in his
own behalf;" 35

5) that "Tee Chin Ho" is not phonetically all that different from "Tee Tien Ho;"

6) that "Tee Chin Ho" admitted that earlier, he had been found in possession of empty bottles
marked "La Tondeña, Inc.," and "Ginebra San Miguel," which had been seized by Manila police
officers; and
7) that La Tondeña had filed a "motion to admit attached amended complaint with motion to
dismiss motion for intervention and petition for preliminary injunction" dated April 5, 1989, in
which it alleged inter alia, in relation to the amendment of its complaint, that —

a) the "name of defendant Tee Chin Ho and his address at 1105 Estrada St.,
Singalong, Manila . . . (had been) inadvertently indicated as Te Tien Ho with
address at 1005 Estrada St., Singalong, Manila in the complaint;"

b) the amendment consisted merely in the correction of "the spelling in the name
of the defendant as well as his address . . ;"

c) the error in La Tondeña's identification of the defendant was not a fatal one
since the principal object of the replevin suit was the recovery of identifiable
bottles in the wrongful possession of another; and

d) in any case, Tee Chin Ho had waived his right to object such an error.

There were thus circumstances of record, of which Her Honor was charged with knowledge,
that tended to show that La Tondeña's proffered thesis was not entirely far-fetched: that the real
target of its replevin suit was a junk dealer at Estrada Street, Singalong, Manila, who was in
unlawful possession of a large number of its empty bottles, whose name and address had been
mistakenly stated in the original complaint but could nonetheless be ascertained. At the very
least, therefore, it was a matter of preferential priority for the Judge to determine whether "Tee
Chin Ho" is in fact "Te Tien Ho," and thus enable her to know in turn, whether or not the
remedy of intervention was proper in the premises, instead of that provided in Section 5 of Rule
60, supra. In other words, unless there were a prior determination by Her Honor of whether or
not "Tee Chin Ho" was a proper party defendant or a stranger to the action, she was in no position
to adjudge that this intervention as party defendant was correct. But this is what respondent
Judge did. Without first making that prior determination, she proceeded to pass upon the
motion for intervention; she just simply assumed and declared that Tee Chin Ho was not Te
Tien Ho. She thus appears to have acted without foundation, rashly, whimsically, oppressively.

II

Also overlooked by respondent Judge was that the amendment sought by La Tondeña was one
of those explicitly mentioned, and could, in the premises, be made as a matter of right, in
accordance with Section 1 and 2, Rule 10 of the Rules of Court, viz.: 36

Sec. 1. Amendments in general. — Pleadings may be amended by adding or


striking out an allegation or the name of any party, or by correcting a mistake in the
name of a party or a mistaken or inadequate or description in any other respect, so that
the actual merits of the controversy may speedily be determined, without regard
to technicalities, and in the most expeditious and inexpensive manner.

Sec. 2. When amendments allowed as a matter of right. — A party may amend his
pleading once as a matter of course at any time before a responsive pleading is
served or, if the pleading is one to which no responsive pleading is permitted
and the action has not been placed upon the trial calendar, he may so amend it at
any time within ten (10) days after it is served.

It is plain from the record that at the time that La Tondeña moved to amend its complaint to
correct "a mistake in the name of a party" and "a mistaken or inadequate allegation or
description" of that party's place of residence or business, no effective "responsive pleading"
(i.e., the answer) had been served on it by the person impleaded in the action as defendant; for
the admission of Tee Chin Ho's answer-in-intervention (with permissive counterclaim) was yet
hanging fire and no notice of the Court's action thereon had been served on La Tondeña.
Clearly, then, the amendment which La Tondeña wished to make was a matter of right in
accordance with Section 2, Rule 10. Being directed at a "defect in the designation of the parties,"
it was in truth a correction that could be summarily made at any stage of the action provided no
prejudice is caused thereby to the adverse party," as Section 4 of the same Rule 10 further
provides.

It is simply amazing why in light of all these factual and legal consideration, respondent Judge
did not quickly admit the amendment in question to correct the mistaken reference to Tee Chin
Ho as Te Tien Ho, but what is worse, first granted leave to Tee Chin Ho's intervention, and
then indefinitely deferred the matter of the amendment of the complaint by simply declaring it"
submitted for resolution" and commending it to the attention of the Judge who would succeed
her in her sala in view of her impending retirement. The Judge thus appears to have acted in
disregard of the plain provisions of the Rules, whimsically, oppressively.

III

It is amazing, too, why Tee Chin Ho — who was already actually a defendant because he had
been served with summons and had implicitly acknowledged his status as such by signing or
causing the signing of his name to certain papers in which he was described as defendant —
should thereafter still have moved to intervene in the action as defendant in intervention. The
more direct step indicated under the circumstances, since he had already been brought into the
action as defendant, although against his will, was merely to draw the court's attention, by
some appropriate motion or pleading, to the lack of any cause of action against him because he
was not the person impleaded as defendant in the complaint and, of course, seek relief from the
writ of seizure and recovery as such damages as might have been cause to him by the
enforcement thereof. However, Tee Chin Ho chose the more circuitous path: although already
technically a defendant, he still filed a motion to intervene as defendant, and also with the same
basic objective: to tell the Court he was not the person named in the complaint, and to recover
the property seized from him as well as damages.

By this maneuver, Tee Chin Ho was able to evade the legal consequences of the expiration of
the five-day period prescribed by Section 5 (in relations to Section 6) of Rule 10, supra; he
succeeded in recovering the bottles in question even after the expiry of said period, and what is
more, as defendant in intervention, he was able to put at issue the propriety of the ground relied
upon for a writ of delivery, — which he would have been disqualified to do as defendant. It was
seriously wrong: for the Court to have sanctioned such a maneuver.

IV
Again, the subject of La Tondeña's replevin suit, as already stated, are the 20,250 bottles seized
from Tee Chin Ho on February 22, 1989 on the strength of the writ of delivery of February 13,
1989.

But the Trial Court's Order of April 7, 1989, directed La Tondeña to "return and restore unto
intervenor Tee Chin Ho . . . all 41,850 empty bottles/containers with blown up mark "La
Tondeña Inc." and "Ginebra San Miguel" seized from intervenor mentioned in Annexes "4" and
"5" of the answer-in-intervention" — more particularly, in the permissive counterclaim set out in
said answer-in-intervention. In other words, the Court ordered the return not only of the 20,250
bottles seized pursuant to its writ of delivery on February 13, 1989, but, also the quantity of
bottles claimed by Tee Chin Ho to have been seized from him by Manila Police officers at an
earlier date.

Now, as regards these bottles earlier taken into custody by the Manila Police, certain
circumstances are germane, namely:

1) the claim therefor was made in a permissive counterclaim, it not appearing that said claim
"arises out of or is necessarily connected with, the transaction or occurrence that is the subject
matter of the opposing party's . . . claim and does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction;" 37 and

2) the only evidence on record is the receipt issued by the officers involved in the seizure
(Annex 5, answer-in-intervention); the police officers were not impleaded as parties defendant
on Tee Chin Ho's counterclaim nor required to appear and give evidence of said seizure; no
proof was ever adduced by Tee Chin Ho of the reason for the confiscation of the bottles, or
whether or not the bottles had been turned over to La Tondeña.

It does not appear that any docketing fees were paid by Tee Chin Ho for his permissive
counterclaim. At no point has Tee Chin Ho ever stated that he had indeed paid any filing or
other fees thereon. The Trial Court, therefore, should not have admitted the permissive
counterclaim, much less issued preliminary mandatory and prohibitory injunctions founded on
the averments thereof. 38

The Trial Court also required La Tondeña to return to Tee Chin Ho the bottles seized from the
latter by Manila police officers notwithstanding the absence of any showing whatever that the
confiscation of those bottles had been had at La Tondeña's instance or, more importantly, that
the bottles had been turned over to La Tondeña, and without requiring the police officers
concerned to give evidence of the facts surrounding the seizure of those bottles.

It being presumed that "official duty has been regularly performed" and "the law has been
obeyed," 39 the act of seizure of the police officers cannot initially be deemed unlawful upon its
face, in the absence of evidence of the circumstances under which they effected the seizure.
Indeed, since regularity may be assumed in the act of the police officers in question, it may not
unreasonably be supposed that they acted in virtue of a search warrant or some order of a
competent Court — a court other than respondent Judge's, which would consequently have
jurisdiction, to the exclusion of the Court a quo, to release the bottles. Prudence thus dictated
that the respondent Judge at the very least require evidence on this matter: as to why seizure
was made and whether or not, the bottles had been surrendered to La Tondeña — so that it
could be ordered to return them to Tee Chin Ho But this the respondent Judge did not do.
Without knowing if jurisdiction over the bottles seized by the Manila Police was in another
court, without requiring the officers concerned to appear and shed light on the issue, without
knowing, if the bottles were indeed, in possession of La Tondeña , she required La Tondeña to
restore possession. thereof to Tee Chin Ho. In doing so, Her Honored acted quite imprudently,
recklessly, capriciously, oppressively.

Finally, it would appear that respondent Judge, in resolving an application for a provisional
remedy, in the process already disposed of the case on the merits. The basic issue in the action
at bar is whether or not La Tondeña has a right of action to prevent the use by Tee Chin Ho (or
as he was mistakenly named in the complaint: Te Tien Ho) of the bottles especially
manufactured for it pursuant to its specifications. This issue was resolved by respondent Judge
in her challenged Order of April 7, 1989 in the following manner:

. . . even under Republic Act 623, as amended by Republic Act 5700, the fact that
the law provides that the sale of the bottled products does not ipso jure carry with
it the sale of the bottle, yet the same law negates any right of action of plaintiff
manufacturer and seller to recover the empty bottles from "any person to whom
the registered manufacturer . . . seller it has transferred . . . any of the containers
(Section 5) and, moreover, the statute expressly, exempts from its coverage the
use of bottles as containers for "sisi," "bagoong," "patis," and similar native
products" (Section 6); and that the due process clause protects intervenor in his
right to earn his livelihood through engagement in his junk shop business
(Quisumbing and Fernando, Philippine Constitutional Law, p, 80).

It is of public knowledge that when a person purchase a drink, whatever it may


be the buyer is required to deposit an amount for the bottles and if the empty
bottles, after consuming its contents, is not returned, then the buyer is
answerable for the empty bottle, thereby converting the transaction to one of a
sale to include the bottle thereof and the seller would not and shall not be
permitted to complaint and recover the said bottles until and unless the
corresponding deposit is returned to the buyer in exchange of the bottle.

Such a ruling having been handed down, what else, it may be asked, would still have to
be resolved at the trial, and stated in its final judgment, as regards the merits of the
action?

Said ruling moreover, does not seem to correct, being in conflict with Section 3 of Republic Act
No. 623, which reads: 40

Sec. 3. The use by any person other then the registered manufacturer, bottler or
seller, without written permission of the latter of any such bottle, cask, barrel,
keg, box, steel cylinders, tanks, flasks, accumulators, or other similar containers,
or the possession thereof without any written permission of the manufacturer, by any
junk dealer or dealer in casks, barrels, kegs, boxes, steel cylinders, tanks, flasks,
accumulators, or other similar containers, the same being duly marked or
stamped and registered as herein provided, shall give rise to a prima facie
presumption that such use of possession is unlawful.

Since Tee Chin Ho never denied being a junk dealer — indeed, his registered business name
describes him as one such 41 — or that he did not have La Tondena's written permission to
possess the bottles in question, a correct application of the law called for invoking the
presumption created by the confluence of these twin circumstances to deny said respondent any
right to the possession or use of the bottles, instead of ordering their return to him, howsoever
provisionally. And lacking any showing that La Tondeña conveyed the bottles, sans contents, to
Tee Chin Ho, or that the latter is a bottler of "sisi," "bagoong," or similar products, no argument
can be made for extending to him the exemptive provisions of Section 5 and 6 of the same Act
cited in the questioned Order of the Regional Trial Court.

VI

All the foregoing considered; the Court is satisfied that the grave errors ascribed to the Regional
Trial Court were in fact committed; and that it was quite wrong for the Court of Appeals to
have failed to declare those errors as constituting grave abuse of discretion, and to have upheld
the Order assailed in these proceedings.

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals complained of
is REVERSED. The Order of April 7, 1989 of the Regional Trial Court of Manila in Civil Case
No. 89-47768 and the Writ of Mandatory and Prohibitory Injunction of April 11, 1989 issued
pursuant thereto are NULLED and SET ASIDE. The status quo obtaining prior to the issuance of
said Order and Writ is ORDERED RESTORED, and the proceedings in said case shall continue
as if they had never been issued. Costs against the private respondent.

SO ORDERED.

FIRST DIVISION

[G.R. No. 102998. July 5, 1996]

BA FINANCE CORPORATION, petitioner vs. HON. COURT OF APPEALS and


ROBERTO M. REYES, respondents.
DECISION
VITUG, J.:
The case at bar is a suit for replevin and damages. The petition for review on certiorari assails
the decision of the Court of Appeals[1] in CA- G.R. CV No. 23605 affirming that of the Regional
Trial Court of Manila, Branch XX,[2] which has disposed of its Civil Case No. 87-42270 in this wise:

"WHEREFORE, the case against defendant-spouses (sic) Reynaldo Manahan is hereby


dismissed without prejudice, for failure to prosecute. Plaintiff having failed to show the liability
of defendant John Doe in the person of Roberto M. Reyes, the case against the latter should
likewise be dismissed. Moreover, plaintiff is hereby directed to return the vehicle seized by
virtue of the order of seizure issued by this Court with all its accessories to the said Roberto M.
Reyes."[3]

The decisions of both the appellate court and the court a quo are based on a like finding of
the facts hereinafter briefly narrated.
The spouses Reynaldo and Florencia Manahan executed, on 15 May 1980, a promissory
note[4] binding themselves to pay Carmasters, Inc., the amount of P83,080.00 in thirty-six monthly
installments commencing 01 July 1980. To secure payment, the Manahan spouses executed a deed
of chattel mortgage[5] over a motor vehicle, a Ford Cortina 1.6 GL, with motor and serial number
CUBFWE-801010. Carmasters later assigned[6] the promissory note and the chattel mortgage to
petitioner BA Finance Corporation with the conformity of the Manahans. When the latter failed
to pay the due installments, petitioner sent demand letters. The demands not having been
heeded, petitioner, on 02 October 1987, filed a complaint for replevin with damages against the
spouses, as well as against a John Doe, praying for the recovery of the vehicle with an alternative
prayer for the payment of a sum of money should the vehicle not be returned. Upon petitioner's
motion and the filing of a bond in the amount of P169,161.00, the lower court issued a writ of
replevin. The court, however, cautioned petitioner that should summons be not served on the
defendants within thirty (30) days from the writ's issuance, the case would be dismissed for
failure to prosecute.[7] The warning was based on what the court perceived to be the deplorable
practice of some mortgagees of "freezing (the) foreclosure or replevin cases" which they would
so "conveniently utilize as a leverage for the collection of unpaid installments on mortgaged
chattels."[8]
The service of summons upon the spouses Manahan was caused to be served by petitioner
at No. 35 Lantana St., Cubao, Quezon City. The original of the summons had the name and the
signature of private respondent Roberto M. Reyes indicating that he received, on 14 October 1987,
a copy of the summons and the complaint.[9] Forthwith, petitioner, through its Legal Assistant,
Danilo E. Solano, issued a certification to the effect that it had received from Orson R. Santiago,
the deputy sheriff of the Regional Trial Court of Manila, Branch 20, the Ford Cortina seized from
private respondent Roberto M. Reyes, the John Doe referred to in the complaint,[10] in Sorsogon,
Sorsogon.[11] On 20 October 1987, the lower court came out with an order of seizure.
Alleging possession in good faith, private respondent filed, on 26 October 1987, a motion for
an extension of time within which to file his answer and/or a motion for intervention. The court
granted the motion.
A few months later, or on 18 February 1988, the court issued an order which, in part, stated:

"Perusal of the record shows that an order for the seizure of personal property was issued on
October 20, 1987 in pursuance to a previous order of the Court dated October 13,
1987. However, to date, there is no showing that the principal defendants were served with
summons inspite of the lapse of four (4) months.

"Considering, this is a replevin case and to forestall the evils that arise from this practice,
plaintiff failing to heed the Order dated October 13, 1987, particularly second paragraph
thereof, the above-entitled case is hereby ordered DISMISSED for failure to prosecute and
further ordering the plaintiff to return the property seized with all its accessories to defendant
John Doe in the person of Roberto M. Reyes.

"SO ORDERED."[12]

On 26 February 1988, petitioner filed a notice of dismissal of the case "without prejudice and
without pronouncement as to costs, before service of Summons and Answer, under Section 1,
Rule 17, of the Rules of Court."[13] It also sought in another motion the withdrawal of the replevin
bond. In view of the earlier dismissal of the case (for petitioner's failure to prosecute), the court,
on 02 March 1988, merely noted the notice of dismissal and denied the motion to withdraw the
replevin bond considering that the writ of replevin had meanwhile been implemented.[14]
On 09 March 1988, private respondent filed a motion praying that petitioner be directed to
comply with the court order requiring petitioner to return the vehicle to him. In turn, petitioner
filed, on 14 March 1988, a motion for the reconsideration of the orders of 18 February 1988 and 02
March 1988 contending that: (a) the dismissal of the case was tantamount to adjudication on the
merits that thereby deprived it with the remedy to enforce the promissory note, the chattel
mortgage and the deed of assignment, under Section 3, Rule 117, of the Rules of Court; (b) the
order to return the vehicle to private respondent was a departure from jurisprudence recognizing
the right of the mortgagor to foreclose the property to respond to the unpaid obligation secured
by the chattel mortgage, and (c) there were no legal and factual bases for the court's view that the
filing of the replevin case was "characterized (by) evil practices."[15]
On 20 April 1988, the court granted petitioner's motion for reconsideration and accordingly
recalled the order directing the return of the vehicle to private respondent, set aside the order
dismissing the case, directed petitioner "to cause the service of summons together with a copy of
the complaint on the principal defendants within five (5) days from receipt" [16] thereof at
petitioner's expense, and ordered private respondent to answer the complaint.
A few months later, or on 02 August 1988, petitioner filed a motion to declare private
respondent in default. The court granted the motion on that same day and declared private
respondent "in default for his failure to file the x x x answer within the reglementary
period."[17] The court likewise granted petitioner's motion to set the case for the presentation, ex
parte, of evidence. Petitioner, thereupon, submitted the promissory note, the deed of chattel
mortgage, the deed of assignment, a statement of account in the name of Florencia Manahan and
two demand letters.
On 27 February 1989, the trial court rendered a decision dismissing the complaint against the
Manahans for failure of petitioner to prosecute the case against them. It also dismissed the case
against private respondent for failure of petitioner to show any legal basis for said respondent's
liability. The court ratiocinated:
"x x x. Roberto M. Reyes is merely ancillary debtor in this case. The defendant spouses Manahan
being the principal debtor(s) and as there is no showing that the latter has been brought before
the jurisdiction of this court, it must necessarily follow that the plaintiff has no cause of action
against said Roberto M. Reyes herein before referred to as defendant John Doe. Under the
circumstances, it is incumbent upon the plaintiff to return the seized vehicle unto the said
Roberto M. Reyes."[18]

In its appeal to the Court of Appeals, petitioner has asserted that a suit for replevin aimed at
the foreclosure of the chattel is an action quasi in rem which does not necessitate the presence of
the principal obligors as long as the court does not render any personal judgment against
them. This argument did not persuade the appellate court, the latter holding that-

"x x x. In action quasi in rem an individual is named as defendant and the purpose of the
proceeding is to subject his interest therein to the obligation or lien burdening the property,
such as proceedings having for their sole object the sale or disposition of the property of the
defendant, whether by attachment, foreclosure, or other form of remedy (Sandejas vs. Robles, 81
Phil. 421). In the case at bar, the court cannot render any judgment binding on the defendants
spouses for having allegedly violated the terms and conditions of the promissory note and the
contract of chattel mortgage on the ground that the court has no jurisdiction over their persons,
no summons having been served on them. That judgment, if rendered, is void for having
denied the defendants spouses due process of law which contemplates notice and opportunity
to be heard before judgment is rendered, affecting one's person or property (Macabingkil vs.
Yatco, 26 SCRA 150, 157).

"It is next contended by appellant that as between appellant, as mortgagee, and John Doe,
whose right to possession is dubious if not totally non-existent, it is the former which has the
superior right of possession.

"We cannot agree.

"It is an undisputed fact that the subject motor vehicle was taken from the possession of said
Roberto M. Reyes, a third person with respect to the contract of chattel mortgage between the
appellant and the defendants spouses Manahan.

"The Civil Code expressly provides that every possessor has a right to be respected in his
possession (Art. 539, New Civil Code); that good faith is always presumed, and upon him who
alleges bad faith on the part of a possessor rests the burden of proof (Art. 527, ibid.); and that
the possession of movable property acquired in good faith is equivalent to a title; nevertheless,
one who has lost any movable or has been unlawfully deprived thereof, may recover it from the
person in possession of the same (Art. 559, ibid.). Thus, it has been held that a possessor in good
faith is entitled to be respected and protected in his possession as if he were the true owner
thereof until a competent court rules otherwise (Chus Hai vs. Kapunan, 104 Phil. 110; Yu, et
al. vs. Hon. Honrado, etc., et al., 99 SCRA 237). In the case at bar, the trial court did not err in
holding that the complaint does not state any cause of action against Roberto M. Reyes, and in
ordering the return of the subject chattel to him."[19]

The appellate court, subsequently, denied petitioner's motion for reconsideration.


In the instant appeal, petitioner insists that a mortgagee can maintain an action for replevin
against any possessor of the object of a chattel mortgage even if the latter were not a party to the
mortgage.
Replevin, broadly understood, is both a form of principal remedy and of a provisional
relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being
wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow
the plaintiff to retain the thing during the pendency of the action and hold it pendente lite.[20]The
action is primarily possessory in nature and generally determines nothing more than the right of
possession. Replevin is so usually described as a mixed action, being partly in rem and partly in
personam-in rem insofar as the recovery of specific property is concerned, and in personam as
regards to damages involved. As an "action in rem," the gist of the replevin action is the right of
the plaintiff to obtain possession of specific personal property by reason of his being the owner
or of his having a special interest therein.[21] Consequently, the person in possession of the
property sought to be replevied is ordinarily the proper and only necessary party defendant, and
the plaintiff is not required to so join as defendants other persons claiming a right on the property
but not in possession thereof. Rule 60 of the Rules of Court allows an application for the
immediate possession of the property but the plaintiff must show that he has a good legal basis,
i.e., a clear title thereto, for seeking such interim possession.
Where the right of the plaintiff to the possession of the specific property is so conceded or
evident, the action need only be maintained against him who so possesses the property. In rem
actio est per quam rem nostram quae ab alio possidetur petimus, et semper adversus eum est qui rem
possidet. In Northern Motors, Inc. vs. Herrera,[22] the Court has said:

"There can be no question that persons having a special right of property in the goods the
recovery of which is sought, such as a chattel mortgagee, may maintain an action for replevin
therefor. Where the mortgage authorizes the mortgagee to take possession of the property on
default, he may maintain an action to recover possession of the mortgaged chattels from the
mortgagor or from any person in whose hands he may find them."[23]

In effect then, the mortgagee, upon the mortgagor's default, is constituted an attorney-in-fact of
the mortgagor enabling such mortgagee to act for and in behalf of the owner. Accordingly, that
the defendant is not privy to the chattel mortgage should be inconsequential. By the fact that the
object of replevin is traced to his possession, one properly can be a defendant in an action for
replevin. It is here assumed that the plaintiff's right to possess the thing is not or cannot be
disputed.
In case the right of possession on the part of the plaintiff, or his authority to claim such
possession or that of his principal, is put to great doubt (a contending party might contest the
legal bases for plaintiff's cause of action or an adverse and independent claim of ownership or
right of possession is raised by that party), it could become essential to have other persons
involved and accordingly impleaded for a complete determination and resolution of the
controversy. For instance, in Servicewide Specialists, Inc., vs. Court of Appeals, et al., G.R. No.
103301, 08 December 1995, this Court ruled:

"While, in its present petition for review on certiorari, Servicewide has raised a number of
points, the crucial issue still remains, however, to be whether or not an action filed by the
mortgagee for replevin to effect a foreclosure of the property covered by the chattel mortgage
would require that the mortgagor be so impleaded as an indispensable party thereto.

"Rule 60 of the Rules of Court allows a plaintiff, in an action for the recovery of possession of
personal property, to apply for a writ of replevin if it can be shown that he is `the owner of the
property claimed x x x or is entitled to the possession thereof. The plaintiff need not be the owner
so long as he is able to specify his right to the possession of the property and his legal basis
therefor. The question then, insofar as the matter finds relation to the instant case, is whether or
not the plaintiff (herein petitioner) who has predicated his right on being the mortgagee of a
chattel mortgage should implead the mortgagor in his complaint that seeks to recover
possession of the encumbered property in order to effect its foreclosure.

"The answer has to be in the affirmative. In a suit for replevin, a clear right of possession must
be established. A foreclosure under a chattel mortgage may properly be commenced only once
there is default on the part of the mortgagor of his obligation secured by the mortgage. The
replevin in the instant case has been sought to pave the way for the foreclosure of the object
covered by the chattel mortgage. The conditions essential for that foreclosure would be to show,
firstly, the existence of the chattel mortgage and, secondly, the default of the mortgagor. These
requirements must be established since the validity of the plaintiff's exercise of the right of
foreclosure are inevitably dependent thereon. It would thus seem, considering particularly an
adverse and independent claim of ownership by private respondent, that the lower court acted
improvidently when it granted the dismissal of the complaint against Dollente, albeit on
petitioner's (then plaintiff) plea, on the ground that the non-service of summons upon Ernesto
Dollente (would) only delay the determination of the merits of the case, to the prejudice of the
parties' In Imson v. Court of Appeals, we have explained:

x x x. An indispensable party is one whose interest will be affected by the court's action in the
litigation, and without whom no final determination of the case can be had. The party's interest
in the subject matter of the suit and in the relief sought are so inextricably intertwined with the
other parties that his legal presence as a party to the proceeding is an absolute necessity. In his
absence there cannot be a resolution of the dispute of the parties before the court which is
effective, complete, or equitable.

`Conversely, a party is not indispensable to the suit if his interest in the controversy or subject
matter is distinct and divisible from the interest of the other parties and will not necessarily be
prejudiced by a judgment which does complete justice to the parties in court. He is not
indispensable if his presence would merely permit complete relief between him and those
already parties to the action or will simply avoid multiple litigation.'

"Without the presence of indispensable parties to a suit or proceeding, a judgment of a court


cannot attain real finality." (Footnotes omitted.)

A chattel mortgagee, unlike a pledgee, need not be in, nor entitled to, the possession of the
property unless and until the mortgagor defaults and the mortgagee thereupon seeks to foreclose
thereon. Since the mortgagee's right of possession is conditioned upon the actual fact of default
which itself may be controverted, the inclusion of other parties, like the debtor or the mortgagor
himself, may be required in order to allow a full and conclusive determination of the case. When
the mortgagee seeks a replevin in order to effect the eventual foreclosure of the mortgage, it is
not only the existence of, but also the mortgagor's default on, the chattel mortgage that, among
other things, can properly uphold the right to replevy the property. The burden to establish a
valid justification for that action lies with the plaintiff. An adverse possessor, who is not the
mortgagor, cannot just be deprived of his possession, let alone be bound by the terms of the
chattel mortgage contract, simply because the mortgagee brings up an action for replevin.
The appellate court, accordingly, acted well in arriving at its now questioned judgment.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED. No costs.
SO ORDERED.

THIRD DIVISION

[G.R. No. 110048. November 19, 1999]

SERVICEWIDE SPECIALISTS, INC. petitioner, vs. COURT OF APPEALS,


HILDA TEE, & ALBERTO M. VILLAFRANCA, respondents.
DECISION
PURISIMA, J.:

This is a petition for review on certiorari under Rule 45 of the Decision of the Court of
Appeals[1] in CA-G.R. CV No. 19571, affirming the judgment of the Regional Trial Court of
Manila, Branch XX, dismissing Civil Case No. 84-25763 for replevin and damages.
The litigation involves a motor vehicle, a Colt Galant, 4-door Sedan automobile, with Motor
No. 2E-08927, Serial No. A112A-5297, Model No. 1976.
The appellate court culled the facts that matter as follows:[2]

"On May 14, 1976, Leticia L. Laus of Quezon City purchased on credit a Colt Galant xxx from
Fortune Motors (Phils.) Corporation. On the same date, she executed a promissory note for the
amount of P56,028.00, inclusive of interest at 12% per annum, payable within a period of 48
months starting August, 1976 at a monthly installment of P1,167.25 due and demandable on the
17th day of each month (Exhibit A, pp. 144, Orig. Records,). It was agreed upon, among others,
that in case of default in the payment of any installment the total principal sum, together with
the interest, shall become immediately due and payable (Exhibit A; p. 144, Orig. Records). As a
security for the promissory note, a chattel mortgage was constituted over the said motor vehicle
(Exhibit B, ibid.), with a deed of assignment incorporated therein such that the credit and
mortgage rights were assigned by Fortune Motors Corp. in favor of Filinvest Credit Corporation
with the consent of the mortgagor-debtor Leticia Laus (Exhibits B-1 and B-2; p. 147, ibid.). The
vehicle was then registered in the name of Leticia L. Laus with the chattel mortgage annotated
on said certificate. (Exhibit "H"; p. 154, ibid.)

On September 25, 1978, Filinvest Credit Corporation in turn assigned the credit in favor of
Servicewide Specialists, Inc. (Servicewide, for brevity) transferring unto the latter all its rights
under the promissory note and the chattel mortgage (Exhibit B-3; p. 149, ibid.) with the
corresponding notice of assignment sent to the registered car owner (Exhibit C; p. 150, Ibid.).

On April 18, 1977, Leticia Laus failed to pay the monthly installment for that month. The
installments for the succeeding 17 months were not likewise fully paid, hence on September 25,
1978, pursuant to the provisions of the promissory note, Servicewide demanded payment of the
entire outstanding balance of P46,775.24 inclusive of interests (Exhibits D and E; pp. 151-
152, ibid.). Despite said formal demand, Leticia Laus failed to pay all the monthly installments
due until July 18, 1980.

On July 25, 1984, Servicewide sent a statement of account to Leticia Laus and demanded
payment of the amount of P86,613.32 representing the outstanding balance plus interests up to
July 25, 1985, attorneys fees, liquidated damages, estimated repossession expense, and bonding
fee (Exhibit F; p. 153, ibid.)

As a result of the failure of Leticia Laus to settle her obligation, or at least to surrender
possession of the motor vehicle for the purpose of foreclosure, Servicewide instituted a
complaint for replevin, impleading Hilda Tee and John Dee in whose custody the vehicle was
believed to be at the time of the filing of the suit.

In its complaint, plaintiff alleged that it had superior lien over the mortgaged vehicle; that it is
lawfully entitled to the possession of the same together with all its accessories and equipments;
(sic) that Hilda Tee was wrongfully detaining the motor vehicle for the purpose of defeating its
mortgage lien; and that a sufficient bond had been filed in court. (Complaint with Annexes, pp.
1-13, ibid.). On July 30, 1984, the court approved the replevin bond (p. 20, ibid.)

On August 1, 1984, Alberto Villafranca filed a third party claim contending that he is the
absolute owner of the subject motor vehicle duly evidenced by the Bureau of Land
Transportations Certificate of Registration issued in his name on June 22, 1984; that he acquired
the said mother vehicle from a certain Remedios D. Yang under a Deed of Sale dated May 16,
1984; that he acquired the same free from all lien and emcumbrances; and that on July 30, 1984,
the said automobile was taken from his residence by Deputy Sheriff Bernardo Bernabe pursuant
to the seizure order issued by the court a quo.

Upon motion of the plaintiff below, Alberto Villafranca was substituted as defendant. Summons
was served upon him. (pp. 55-56, ibid).

On March 20, 1985, Alberto Villafranca moved for the dismissal of the complaint on the ground
that there is another action pending between the same parties before the Regional Trial Court of
Makati, Branch 140, docketed as Civil Case No. 8310, involving the seizure of subject motor
vehicle and the indemnity bond posted by Servicewide (Motion to Dismiss with Annexes; pp.
57-110, ibid.) On March 28, 1985, the court granted the aforesaid motion (p. 122, ibid.), but
subsequently the order of dismissal was reconsidered and set aside (pp. 135-136, ibid.). For
failure to file his Answer as required by the court aquo, Alberto Villafranca was declared in
default and plaintiffs evidence was received ex parte.

On December 27, 1985, the lower court rendered a decision dismissing the complaint for
insufficiency of evidence. Its motion for reconsideration of said decision having been denied,
xxx.

In its appeal to the Court of Appeals, petitioner theorized that a suit for replevin aimed at
the foreclosure of a chattel is an action quasi in rem, and does not require the inclusion of the
principal obligor in the Complaint. However, the appellate court affirmed the decision of the
lower Court; ratiocinating, thus:

A cursory reading, however, of the Promissory Note dated May 14, 1976 in favor of Fortune
Motors (Phils.) Corp. in the sum of P56,028.00 (Annex A of Complaint, p. 7, Original Records)
and the Chattel Mortgage of the same date (Annex B of Complaint; pp. 8-9, ibid.) will disclose
that the maker and mortgagor respectively are one and the same person: Leticia Laus. In fact,
plaintiff-appellant admits in paragraphs (sic) nos. 2 and 3 of its Complaint that the aforesaid
public documents (Annexes A and B thereof) were executed by Leticia Laus, who, for reasons
not explained, was never impleaded. In the case under consideration, plaintiff-appellants main
case is for judicial foreclosure of the chattel mortgage against Hilda Tee and John Doe who was
later substituted by appellee Alberto Villafranca. But as there is no privity of contract, not even
a causal link, between plaintiff-appellant Servicewide Specialists, Inc. and defendant-appellee
Alberto Villafranca, the court a quo committed no reversible error when it dismissed the case
for insufficiency of evidence against Hilda Tee and Alberto Villafranca since the evidence
adduced pointed to Leticia Laus as the party liable for the obligation sued upon (p. 2, RTC
Decision).[3]

Petitioner presented a Motion for Reconsideration but in its Resolution[4] of May 10, 1993, the
Court of Appeals denied the same, taking notice of another case pending between the same
parties xxx relating to the very chattel mortgage of the motor vehicle in litigation.
Hence, the present petition for review on certiorari under Rule 45. Essentially, the sole issue
here is: Whether or not a case for replevin may be pursued against the defendant, Alberto
Villafranca, without impleading the absconding debtor-mortgagor?
Rule 60 of the Revised Rules of Court requires that an applicant for replevin must show that
he is the owner of the property claimed, particularly describing it, or is entitled to the possession
thereof.[5]Where the right of the plaintiff to the possession of the specified property is so conceded
or evident, the action need only be maintained against him who so possesses the property. In rem
action est per quam rem nostram quae ab alio possidetur petimus, et semper adversus eum est qui rem
possidet.[6]
Citing Northern Motors, Inc. vs. Herrera,[7] the Court said in the case of BA Finance (which
is of similar import with the present case):

There can be no question that persons having a special right of property in the goods the
recovery of which is sought, such as a chattel mortgagee, may maintain an action for replevin
therefor. Where the mortgage authorizes the mortgagee to take possession of the property on
default, he may maintain an action to recover possession of the mortgaged chattels from the
mortgagor or from any person in whose hands he may find them.[8]

Thus, in default of the mortgagor, the mortgagee is thereby constituted as attorney-in-fact of


the mortgagor, enabling such mortgagee to act for and in behalf of the owner. That the defendant
is not privy to the chattel mortgage should be inconsequential. By the fact that the object of
replevin is traced to his possession, one properly can be a defendant in an action for replevin. It
is here assumed that the plaintiffs right to possess the thing is not or cannot be disputed. [9] (Italics
supplied)
However, in case the right of possession on the part of the plaintiff, or his authority to claim
such possession or that of his principal, is put to great doubt (a contending party may contest the
legal bases for plaintiffs cause of action or an adverse and independent claim of ownership or
right of possession may be raised by that party), it could become essential to have other persons
involved and impleaded for a complete determination and resolution of the controversy.[10] In the
case under scrutiny, it is not disputed that there is an adverse and independent claim of
ownership by the respondent as evinced by the existence of a pending case before the Court
of Appeals involving subject motor vehicle between the same parties herein. [11] Its resolution
is a factual matter, the province of which properly lies in the lower Court and not in the Supreme
Court, in the guise of a petition for review on certiorari. For it is basic that under Rule 45, this
Court only entertains questions of law, and rare are the exceptions and the present case does not
appear to be one of them.
In a suit for replevin, a clear right of possession must be established. (Italics supplied) A
foreclosure under a chattel mortgage may properly be commenced only once there is default on
the part of the mortgagor of his obligation secured by the mortgage. The replevin in this case has
been resorted to in order to pave the way for the foreclosure of what is covered by the chattel
mortgage. The conditions essential for such foreclosure would be to show, firstly, the existence of
the chattel mortgage and, secondly, the default of the mortgagor. These requirements must be
shown because the validity of the plaintiffs exercise of the right of foreclosure is inevitably
dependent thereon.[12]
Since the mortgagees right of possession is conditioned upon the actual fact of default
which itself may be controverted, the inclusion of other parties, like the debtor or the
mortgagor himself, may be required in order to allow a full and conclusive determination of
the case. When the mortgagee seeks a replevin in order to effect the eventual foreclosure of the
mortgage, it is not only the existence of, but also the mortgagors default on, the chattel mortgage
that, among other things, can properly uphold the right to replevy the property. The burden to
establish a valid justification for such action lies with the plaintiff. An adverse possessor, who is
not the mortgagor, cannot just be deprived of his possession, let alone be bound by the terms of
the chattel mortgage contract, simply because the mortgagee brings up an action for replevin.[13]
Leticia Laus, being an indispensable party, should have been impleaded in the complaint for
replevin and damages. An indispensable party is one whose interest will be affected by the courts
action in the litigation, and without whom no final determination of the case can be had. The
partys interest in the subject matter of the suit and in the relief sought are so inextricably
intertwined with the other parties that his legal presence as a party to the proceeding is an
absolute necessity. In his absence, there cannot be a resolution of the dispute of the parties before
the Court which is effective, complete, or equitable.
Conversely, a party is not indispensable to the suit if his interest in the controversy or subject
matter is distinct and divisible from the interest of the other parties and will not necessarily be
prejudiced by a judgment which does complete justice to the parties in Court. He is not
indispensable if his presence would merely complete relief between him and those already parties
to the action or will simply avoid multiple litigation.[14] Without the presence of indispensable
parties to a suit or proceeding, a judgment of a Court cannot attain real finality.[15]
That petitioner could not locate the mortgagor, Leticia Laus, is no excuse for resorting to a
procedural short-cut. It could have properly availed of substituted service of summons under the
Revised Rules of Court.[16] If it deemed such a mode to be unavailing, it could have proceeded in
accordance with Section 14 of the same Rule.[17] Indeed, petitioner had other proper remedies, it
could have resorted to but failed to avail of. For instance, it could have properly impleaded the
mortgagor. Such failure is fatal to petitioners cause.
With the foregoing disquisition and conclusion, the other issues raised by petitioner need not
be passed upon.
WHEREFORE, the Petition is DENIED and the Decision of the Court of Appeals in CA-G.R.
CV No. 19571 AFFIRMED. No pronouncement as to costs.
SO ORDERED.

EN BANC

[G.R. No. L-19718. January 31, 1966.]

PASTOR D. AGO, Petitioner, v. THE COURT OF APPEALS, HON. MANUEL


P. BARCELONA, BENITO MACROHON, VENANCIO CASTAÑEDA and
NICETAS HENSON, Respondents.
J.M. Luison for the petitioner.

Quijano & Arroyo for the respondents.

SYLLABUS

1. REPLEVIN; WHEN PREVAILING PARTY MAY REFUSE TO TAKE THE LITIGATED


PROPERTY; DEFENDANT’S OBLIGATION TO TAKE PROPERTY BACK. — Where judgment
is rendered for the articles or their value and they cannot be returned in substantially the same
condition, it is settled that the prevailing party may refuse to take them and instead sue on the
redelivery bond or, as in this case, execute on the judgment for value. (Kunz v. Nelson, 76 P2d
577 [1938]). If the prevailing party has this right after judgment, it is at once obvious that he
must also have the same right when, asking for the delivery pendente lite of the same property,
he afterwards find them in a substantially depreciated condition. This right to reject is assured
in the first instance by the provision that the judgment in a suit for replevin must be in the
alternative so as to afford a measure of relief where the property cannot be returned (Rule 60,
sec. 9); in the second case it is implied from the requirement that "if for any reason the property
is not delivered to the plaintiff, the officer must return it to the defendant." (Rule 60, sec. 6.) It
then becomes the defendant’s obligation to take them back upon tender of the sheriff.

2. ID.; LIABILITY OF DEFENDANT FOR DETENTION OF. — If it was petitioner’s obligation to


accept redelivery of the machines after their rejection by the respondents, then it is clear that
whether he took them back or not, he was liable for their detention. An action for replevin has
for its object the recovery of some personal property; it is obvious that if the plaintiff in that
action refuses to take delivery of the very property he sought to recover, it must be for very
good reasons which defeat his object. Not so in the case of the defendant in such an action as to
whom this presumption cannot be applied.

3. JUDGMENTS; POWER OF COURT TO STAY EXECUTION OF FINAL JUDGMENT. — The


case of Chua A. H . Lee v. Mapa, 51 Phil. 624 (1928) and other cases cited by petitioner in
support of his contention that even after a judgment has become final the court may stay or
even quash the execution, refer to circumstances that have "arisen subsequent to the remanding
of the record from the Supreme Court to the trial court" and those cases are justified by the
primordial necessity of doing justice in each case. But those cases, as Amor v. Jugo, 77 Phil. 703
(1946), subsequently explained cannot be invoked when the supposed change in the
circumstances of the parties took place while the case was pending. The reason is that there is
then no excuse for not bringing the matter to the attention of the court the fact or circumstance
that affects the outcome of the case. Such was the supposed change in the situation of the
parties in this case when, so it is claimed, the petitioner lost possession of the machines for the
detention of which he was ordered by final judgment to pay damages.

DECISION

REGALA, J.:

This is a petition for certiorari to review the decision of the Court of Appeals. So far as relevant,
the facts as found by the appellate court are as follows:chanrob1es virtual 1aw library

In 1955, Venancio Castañeda and Niceta Henson, respondents in this case, brought an action for
replevin in the Manila Court of First Instance to recover from petitioner Pastor D. Ago a
Caterpillar tractor, a Jaeger hoist and a cargo truck which the former had delivered to the latter
for use in their logging business in Agusan. At the same time, respondents asked for the
immediate delivery of the machines to them and, for this purpose, posted a bond. The trial
court approved the bond and ordered the seizure of the property, but petitioner filed a
counterbond for P60,000 for which reason he was allowed to retain possession of the
machinery.chanroblesvirtuallawlibrary
On May 30, 1957, the court rendered judgment for respondents, ordering petitioner to return
the machinery or, in the alternative, to pay the sum of P30,000 and to pay to respondents the
sum of P1,750 for the period August 3 to September 3, 1954; P1,312.50 a month from September
4, 1954 until the machines were returned or their value paid and P2,000 for attorney’s fee.
However, petitioner was given credit for P3,000 which he had earlier paid to the respondents.

Petitioner subsequently appealed the decision to this Court. While the appeal was thus pending,
it was found that petitioner’s surety, the Globe Assurance Co., had become bankrupt. Hence, on
motion of the respondents, the trial court ordered petitioner to file a new and sufficient
counterbond and, when he failed to file one, it issued a writ of replevin. Petitioner challenged
the authority of the trial court to issue the writ both in the Court of Appeals and in this Court
but in both cases his petition was dismissed. Accordingly, the trial court issued a writ of seizure
on November 10, 1958.

On January 5, 1959, the sheriff served the writ on petitioner’s assistant manager, then took
possession of the tractor and hoist as required by law, and five days after offered to deliver
these machines to the respondent’s representative but the latter refused to accept them on the
ground that the tractor and hoist were unserviceable while the truck could not be produced.
Indeed, as the Court of Appeals said in the decision appealed, "with respect to the tractor, the
three most important and indispensable parts thereof were broken and unusable. The Jaeger
hoist had also become useless."cralaw virtua1aw library

On January 22, 1959, the sheriff made a report to the court, stating that, because of respondents’
refusal to take possession of the machines, "there is no other recourse but to return (them) to
defendant Pastor D. Ago." The following day, January 23, 1959, respondents also informed the
court that they "could not receive the D-8 Caterpillar tractor or the Jaeger hoist with power
engine because they are in a dilapidated condition while the GMC truck could not be produced
by the defendants. These three (3) machines were complete and in good condition when
plaintiff turned them over to defendants."cralaw virtua1aw library

Meanwhile this Court affirmed the decision of the lower court in Ago v. Castañeda, G.R. No. L-
14066, June 30, 1961 and thereafter remanded the case to the court of origin. On August 25, 1961,
a writ of execution for P172,923.87 was issued. However, petitioner asked for a stay of execution
on the ground that since January 5, 1959, there had been "a change in the situation of the
parties" which made it inequitable to enforce the decision as affirmed by this Court. According
to petitioner, after their seizure by the sheriff, the tractor and the hoist were never returned to
him. Therefore, he should not be made to pay damages which he estimated to be P99,877.09 for
their detention after January 5, 1959. With respect to the cargo truck, petitioner contended that
no rental value could be assigned to it because on January 5, 1959, it was already a junk.

In its order of October 13, 1961, the court denied petitioner’s motion on the ground that the
matter should have been raised before the decision became final. As a result, petitioner’s house
and lot in Quezon City were levied upon by the Sheriff and advertised for sale on October 25,
1961. Petitioner tried to prevent enforcement of the writ of execution by filing a motion to stop
the sale but this was denied on October 14, 1961. His motion for reconsideration was likewise
denied on October 18. He therefore filed a petition for certiorari in the Court of Appeals to annul
the orders of October 13, 14 and 18, 1961, but after due consideration, the petition was
dismissed. Hence this appeal.

On November 23, 1962, we granted injunction in this case upon the filing of a bond in the sum
of P110,000 to restrain execution of the judgment so far as P99,877.08 was concerned "without
prejudice to the enforcement of the judgment with respect to the undisputed balance of
P73,046.28 as of August 25, 1961." But as no bond was filed by petitioner and no writ of
injunction was issued, respondent sheriff proceeded with the sale of petitioner’s house and lot.
In the public auction held on March 8, 1963, respondents won as highest bidders for P141,750.

It was then that petitioner, without informing us of the sale, filed a bond and secured from us
on March 9, 1964, a writ of preliminary injunction. When our attention was therefore called to
this fact, we cancelled the injunction. However, on motion of the petitioner and upon his
posting a new bond in the amount of P50,000, we issued an injunction restraining execution of
the judgment for the deficiency of P48,918.61.

Petitioner makes seven assignments of error all of which can be reduced to the following
propositions: (1) whether the respondents had a right to reject the machinery and the petitioner
a corresponding obligation to take them back; (2) whether the sheriff actually returned the
machinery after respondents refused to take them; and (3) whether execution should have been
suspended.

To begin with, where judgment is rendered for the articles or their value and they cannot be
returned in substantially the same condition, it is settled that the prevailing party may refuse to
take them and instead sue on the redelivery bond or, as in this case, execute on the judgment for
value (Kunz v. Nelson, 76 P2d 577 [1938]). If the prevailing party has this right after judgment,
it is at once obvious that he must also have the same right when, asking for the delivery
pendente lite of the same property, he afterwards finds them in a substantially depreciated
condition. Here, the Court of Appeals found "beyond dispute" that the tractor and the hoist had
so deteriorated that they had become unserviceable. This right to reject is assured in the first
instance by the provision that the judgment in a suit for replevin must be in the alternative so as
to afford a measure of relief where the property cannot be returned (Rule 60, sec. 9); in the
second case it is implied from the requirement that "if for any reason the property is not
delivered to the plaintiff, the officer must return it to the defendant." (Rule 60, sec. 6). It then
becomes the defendant’s obligation to take them back upon tender of the sheriff.

Now, did the sheriff return the machinery to the petitioner, as defendant in the replevin suit?
Despite the affirmative finding of the Court of Appeals, petitioner denies that they were ever
returned to him. For this purpose, he relies on the affidavits of P.C. Villanueva, Felimon Pacot
and Narciso Lansang — affidavits which he presented to the trial court in support of his motion
to stay execution. Villanueva was the same sheriff who, in his report dated January 22, 1959,
stated that, in view of respondents’ refusal to accept the machines, "there is no other recourse
but to return (them) to the defendant Pastor D. Ago," but who now in his affidavit executed on
September 27, 1961, or two years and eight months after making the report, states that he was
not able to return the machines because petitioner refused to take them back. Lansang was
petitioner’s assistant manager on whom the writ of seizure was served on January 5, 1959, while
Pacot was petitioner’s guard to whom the machines were entrusted for safekeeping for five
days as required by law, who now in their affidavits of September 27, 1961, state that the
machines remained in the custody of Pacot because petitioner did not take them back when the
sheriff offered to return them.

But if, as explained, it was petitioner’s obligation to accept redelivery of the machines after their
rejection by respondents, then it is clear that whether he took them back or not, he was liable for
their detention. An action for replevin has for its object the recovery of some personal property;
it is obvious that if the plaintiff in that action refuses to take delivery of the very property he
sought to recover, it must be for very good reasons which defeat his object. Not so in the case of
the defendant in such an action as to whom this presumption cannot be applied.

Then, too, as both the trial and the appellate courts observed, petitioner did not contest
respondents’ manifestation made the day after the sheriff reported to the court that he was
going to return the machines to petitioner. In that manifestation, respondents
averred:chanrob1es virtual 1aw library

8. In view of the dilapidated state of the machineries which are no longer in a serviceable,
usable, or working condition and the important and indispensable parts thereon missing or
scattered, while the GMC truck could not even be located, plaintiffs’ representative could not
receive the machineries from the Sheriff of Agusan who in turn returned the remaining
machines and whatever parts that still remained, to defendant Pastor D. Ago, thru his
representative.

Why petitioner did not dispute this assertion shortly after it was made has not been explained.
On the other hand, his tardy denial of it when the judgment for recovery was to be executed
fosters in the mind a conviction that the affidavits were secured merely to frustrate efforts at
execution.chanrobles virtual lawlibrary

But there is an even more fundamental reason why we think the lower court correctly ordered
execution to proceed. As Moran aptly states:jgc:chanrobles.com.ph

" [A] court cannot refuse to issue a writ of execution upon a final and executory judgment, or
quash it, or order its stay, for, as a general rule, the parties will not be allowed, after final
judgment, to object to the execution by raising new issues of fact or of law, nor can it refuse —
and the reason is more compelling — to issue such writ, or quash it or order its stay, when the
judgment had been reviewed and affirmed by an appellate court, for it cannot review or
interfere with any matter decided on appeal, or give other or further relief, or assume
supervisory jurisdiction to interpret or reverse the judgment of the higher court." (2 Comments
on the Rules of Court 257 [1963])

Chua A. H. Lee v. Mapa, 51 Phil. 624 (1928) and other cases, which are cited by petitioner in
support of his contention that even after a judgment has become final the court may stay or
even quash the execution, refer to circumstances that have "arisen subsequent to the remanding
of the record from the Supreme Court to the trial court" (at 628) and those cases are justified by
the primordial necessity of doing justice in each case. But those cases, as Amor v. Jugo, 77 Phil.
703 (1946) subsequently explained, cannot be invoked when the supposed change in the
circumstances of the parties took place while the case was pending. The reason is that there is
then no excuse for not bringing the matter to the attention of the court the fact or circumstance
that affects the outcome of the case. Such was the supposed change in the situation of the
parties in this case when, so it is claimed, the petitioner lost possession of the machines for the
detention of which he was ordered by final judgment to pay damages.

Finally, with respect to the cargo truck which petitioner says was already a junk on January 5,
1959 when the sheriff served the writ of seizure and for which reason he should not be made to
pay rental, suffice it to say that the finding of the Court of Appeals is that it was missing and
could not be produced and not that it was a junk. We take this finding to be final, especially
considering that it was based on the official report of the sheriff.chanrobles virtual lawlibrary

WHEREFORE, the decision appealed from is affirmed, with costs against petitioner.

Republic of the Philippines


SUPREME COURT
Manila

EN BANC

G.R. No. L-22585 December 18, 1967

NICANOR. B. PAGKALINAWAN, Supervising Agent, National Bureau of


Investigation, East Visayan District Office Cebu City, petitioner,
vs.
HON. AMADOR E. GOMEZ, in his capacity as Presiding Judge, Branch II,
Court of First Instance of Cebu, Cebu City, and NORBERTO L.
DAYRIT, respondents.
Fernando and Evangelista for petitioner.
Jayme, Rodriguez and Sosmeña for respondents.

FERNANDO, J.:

This decision deals with the specific question on whether a court of first instance of one district
in a replevin proceeding may ignore a search warrant issued by another court of first instance.
In brief, this petition presents this situation: Respondent Judge, the Hon. Amador E. Gomez
acting on a complaint for replevin filed by the other respondent Norberto L. Dayrit directed
petitioner, Nicanor B. Pagkalinawan, a supervising agent of the National Bureau of
Investigation to turn over to the Sheriff of Cebu City an automobile which was seized under a
search warrant issued by the Court of First Instance of Manila, the Hon. Guillermo Santos
presiding, as a subject of the offense of theft or as stolen property. Did respondent Judge act in
excess of jurisdiction or with grave abuse of discretion?
What happened next after such seizure in accordance with the search warrant issued on
February 4, 1964, at Manila was set forth in the petition. Thus: "That on February 7, 1964,
respondent Norberto L. Dayrit filed a complaint for Replevin in the Court of First Instance of
Cebu, which was docketed as Civil Case No. R-8284 and assigned to Branch II presided by
respondent Honorable Judge Amador E. Gomez, against the herein petitioner, Nicanor
Pagkalinawan, Supervising Agent, National Bureau of Investigation, Cebu City, [and two
members of the] Manila Police Department for the recovery of possession of the aforementioned
car alleging that it is wrongfully detained by the herein petitioner . . .; that on February 8, 1964
the respondent Judge acting on said complaint issued an order directing the Sheriff of Cebu
City or any proper officer of the court, to take the aforementioned car into his custody and said
order was implemented by the Clerk of Court by issuing on the same date a writ of replevin; . . .
that on same date, February 8, 1964 the petitioner after said writ of replevin was served on him
manifested that he could not possibly comply with said order to deliver the aforementioned car
to the sheriff because he was holding the same in 'custodia legis' for the Court of First Instance of
Manila, Branch II, the court that issued the search warrant under which the said car was seized
and held in custody; . . . that on February 12, 1964, the respondent Judge, acting on the 'urgent
motion to require defendant Nicanor B. Pagkalinawan, Supervising Agent, National Bureau of
Investigation, Cebu City, to explain why he persists in refusing to deliver the car in question to
the sheriff', which motion was vigorously opposed during the hearing by the petitioner, issued
an order directing the petitioner . . . 'to immediately comply with the order of the court and to
turn over to the sheriff the car in question upon receipt of a copy of this order' with the warning
that, otherwise, 'this court visits on [him] the full harshness of its coercive power' and under this
circumstance the petitioner on the same date, February 12, 1964, was compelled to part with the
custody of the said car to the Provincial Sheriff of Cebu who took over the possession of the
same and who in turn immediately gave it or turned it over to respondent Norberto L. Dayrit; . .
. that the delivery of the car to the Provincial Sheriff who in turn delivered it to the respondent
Norberto L. Dayrit by virtue of the said order of the respondent Judge, would place the
petitioner in imminent danger of being declared in Contempt of the Manila Court of First
Instance that issued the search warrant because he cannot now comply with the recent order of
the said court dated February 10, 1964 regarding the proper disposition of said car; . . . that
petitioner on February 14, 1964 filed an 'urgent motion for reconsideration of the order dated
February 12, 1964 and setting aside the writ of replevin dated February 8, 1964,' but respondent
Judge after hearing on said motion on February 15, 1964, denied the same in its order dated
February 20, 1964. . . ."1

It was then alleged by petitioner that the aforesaid orders issued by the respondent Judge
compelling him to deliver such car to the Sheriff so that it could be turned over to the other
respondent, after it was explained that it was being held in custodia legis for the Manila Court of
First Instance, having been properly seized in pursuance of a search warrant issued by it, were
made without or in excess of its jurisdiction, or with grave abuse of discretion; that said orders
moreover would likewise "nullify the purpose and defeat the force and validity of the search
warrant issued by the Court of First Instance, a competent court of equal category;" and "would
then cause confusion in the enforcement and implementation of lawful orders issued by other
courts thereby causing embarrassment in the proper administration of justice; . . . ."2

The prayer was for respondent Judge being declared as having acted without or in excess of
jurisdiction or with grave abuse of discretion in thus proceeding in the replevin action and that
pending the final hearing and determination of this petition, an order of preliminary mandatory
injunction be issued directing the respondent Judge to order the return of said car to petitioner,
desisting and refraining until further orders of this Court from acting on the matter.

On March 18, 1964, this Court issued a resolution ordering respondents to file an answer to the
petition and likewise issued a preliminary mandatory injunction without bond as prayed for.itc-
alf

In the answer of respondent Dayrit, there was in effect an admission of the facts as alleged by
petitioner. Respondent Dayrit would however impugn the actuations of petitioner, who, it was
alleged "instead of protecting rights of the citizens of this country used the powers of his office
in arrogating unto himself the interpretation of the law which only the courts are vested thereof
and the alleged contempt charge which petitioner asserts under this paragraph is not only
nugatory and illegal but entirely imaginary for the reason that the [search warrant] mentioned
in the [Petition] is based on fraud and deceit. . . ."3 The special defenses appearing in the answer
further stressed not only the fact of the car that was seized under the search warrant as different
from that referred to in the case pending in the Court of First Instance of Manila, but also the
fact of respondent being the true and lawful owner thereof.4There was thus a denial of the
allegations that respondent Judge in issuing the orders complained of, acted in excess of his
jurisdiction or with grave abuse of discretion, for the truth of the matter, according to
respondent, was that "the car in question is not subject of a criminal case before a Court of First
Instance of Manila, more specifically before Hon. Judge Guillermo Santos," who issued the
search warrant, or in any other court, respondent Dayrit further stating that he was not an
accused "in any case where said car is allegedly stolen property. . . ."5

More specifically in so far as the assertion of the jurisdiction of respondent Judge on the suit for
replevin affecting the validity of the search warrant issued, it was alleged in the answer "That
respondent Dayrit denies the allegations contained in paragraph 10 of the [petition] with
respect to the fact that the [orders] of co-respondent Judge Amador E. Gomez would nullify and
defeat the force and validity of the [search warrant] for [its] issuance . . . cannot prevent
respondent Judge Amador E. Gomez to issue an order of replevin as provided by Section 2,
Rule 60 of the Rules of Court; . . ."6

Petitioner is entitled to the remedy prayed for; the writ must be granted. It would be to ignore a
principle to which this Court has been firmly committed if under the circumstances disclosed,
respondent Judge would be sustained. The moment a court of first instance has been informed
through the filing of an appropriate pleading that a search warrant has been issued by another
court of first instance, it cannot, even if the literal language of the Rules of Court7 yield a
contrary impression which in this case demonstrated the good faith of respondent Judge for
acting as he did, require a sheriff or any proper officer of the Court to take the property subject
of the replevin action if theretofore it came into the custody of another public officer by virtue of
a search warrant. Only the court of first instance that issued such a search warrant may order its
release.itc-alf Any other view would be subversive of a doctrine that has been steadfastly
adhered to, the main purpose of which is to assure stability and consistency in judicial
actuations and to avoid confusion that may otherwise ensue if courts of coordinate jurisdiction
are permitted to interfere with each other's lawful orders.
Only the other day, in Tuason & Co. v. Hon. Guillermo E. Torres,8 this Court reaffirmed such a
principle, when speaking through Justice Bengzon, it held that only the particular branch of the
Court of First Instance of Quezon City "can annul its own decision. . . ." The opinion continues:
"It is settled that the jurisdiction to annul a judgment of a branch of the Court of First Instance
belongs solely to the very same branch which rendered the judgment." As aptly stated, any other
branch "even it be in the same judicial district" that would attempt to do so "either excess its
jurisdiction",9 or "acts with grave abuse of discretion amounting to lack of jurisdiction, . . . ."10 As
set forth in the above Tuason decision: "In either case, certiorari and prohibition would be
proper to prevent the attempting branch of the court from proceeding to nullify a final decision
rendered by a co-equal and coordinate branch." In this case then, certiorari is likewise an
appropriate remedy when respondent Judge disregarded a search warrant issued by another
court of first instance.itc-alf

In Cabigao v. del Rosario,11 which was a petition to restrain respondent Judge from interfering
with execution of a judgment rendered by another court of first instance, this Court, speaking
through Justice Ostrand stated: "Firstly, it is settled by an overwhelming weight of authority
that no court has power to interfere by injunction with the judgments or decrees of a court of
concurrent or coordinate jurisdiction having equal power to grant the relief sought by
injunction."

In Philippine National Bank v. Javellana,12 which was a petition for certiorari, seeking to set aside a
writ of preliminary injunction issued by respondent Judge enjoining the Provincial Sheriff from
proceeding with the sale of a property attached to satisfy a judgment by another court of first
instance, the above doctrine was reiterated, followed with the affirmation that such "ruling in
the Cabigao case is decisive on the issue before us."

While the instant proceeding does not deal with the annulment of a judgment previously
issued, the principle therein announced calls for application here. Otherwise court of first
instance would be allowed to pass on the validity of a search warrant, issued by another court
of first instance. This is to preclude an undesirable situation from arising, one, which if,
permitted, as above pointed out, would be fraught with undesirable consequences, as already
indicated, for the bench, no less than for the litigants.itc-alf To such an eventuality, this Court
cannot give its sanction.

Moreover, while not authoritative, this case being one of first impression, the doctrine
announced in Molo v. Yatco,13which denied an original petition filed with this Court
for mandamus is persuasive. There the petitioner alleging that by virtue of a search warrant
issued by the Court of First Instance of Rizal for an alleged violation of the Usury Law, certain
documents belonging to him were seized and thereafter kept in the possession of the
respondent Collector of Internal Revenue, sought their return. This Court did not
oblige; mandamus did not lie, as "the one having the legal custody thereof is the Court of First
Instance of Rizal which had ordered their seizure and which is the only one authorized by law
to return them to their owner." It is worth noting that while the then Justice Laurel dissent his
opinion being in effect that the remedy should be granted he admitted that where property is
seized under color of judicial process and brought under the control of the court, [it was] placed
beyond the reach of replevin or other independent or plenary remedy, . . . ."14 Again, while the
above ruling is not squarely on all fours, still the governing principle does not seem to be in
doubt. The remedy for questioning the validity of a search warrant may be sought in the Court
of First Instance that issued it, not in the gala of another Judge, and as admitted in the
dissenting opinion of Justice Laurel, not through replevin.

WHEREFORE, the writ prayed for is granted, and the mandatory preliminary injunction issued
made permanent. With costs against respondent Dayrit.

THIRD DIVISION

G.R. No. 79021 May 17, 1993

ROMEO S. CHUA, Petitioner, vs. THE HON. COURT OF APPEALS, DENNIS CANOY AND
ALEX DE LEON, Respondents.

Roberto R. Palmares for petitioner.chanrobles virtual law library

Josefino B. Remotigue for private respondents.

BIDIN, J.:

This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court assailing
the decision of the Court of Appeals dated May 7, 1987 which nullified the orders dated April
18, 1986 and May 19, 1986 of the Regional Trial Court of Cebu City Branch
VIII.chanroblesvirtualawlibrarychanrobles virtual law library

The facts of the case are not disputed. On April 12, 1986, Judge Lauro V. Francisco of the
Regional Trial Court of Cebu City Branch XIII, after examining 2Lt. Dennis P. Canoy and two
(2) other witnesses, issued a search warrant directing the immediate search of the premises of
R.R. Construction located at M.J. Cuenco Avenue, Cebu City, and the seizure of an Isuzu dump
truck with plate number GAP-175. At twelve noon of the same date, respondent Canoy seized
the aforesaid vehicle and took custody thereof.chanroblesvirtualawlibrarychanrobles virtual
law library

On April 14, 1986, a civil action for Replevin/Sum of Money for the recovery of possession of
the same Isuzu dump truck was filed by petitioner against respondent Canoy and one "John
Doe" in the Regional Trial Court of Cebu City Branch VIII, presided by Judge Leonardo B.
Cañares and docketed thereat as Civil Case No. CEB 4384 alleging among other things,
petitioner's lawful ownership and possession of the subject vehicle; that he has not sold the
subject vehicle to anyone; that he has not stolen nor carnapped it, and that he has never been
charged of the crime of carnapping or any other crime for that matter. Further, petitioner
questioned the validity of the search warrant and the subsequent seizure of the subject vehicle
on the strength of the aforesaid search warrant.chanroblesvirtualawlibrarychanrobles virtual
law library
On the same date, April 14, 1986, Judge Cañares of the Regional Trial Court of Cebu City
Branch VIII directed the issuance of a writ of replevin upon the posting of a bond in the amount
of one hundred thousand pesos (P100,000.00). The writ of replevin was also issued on the same
date, and the subject vehicle was seized on 15 April 1986 by Deputy Sheriff Galicano V.
Fuentes.chanroblesvirtualawlibrarychanrobles virtual law library

On April 16, 1986, respondent Canoy filed a motion for the dismissal of the complaint and for
the quashal of the writ of replevin. The motion was opposed by petitioner. The motion to
dismiss and to quash the writ of replevin was denied in an Order dated April 18, 1986. A
motion for reconsideration of the aforementioned Order was filed and was opposed by
petitioner. In an order dated May 19, 1986, the Regional Trial Court of Cebu Branch VIII denied
the motion for reconsideration and directed the delivery of the subject vehicle to petitioner. Not
satisfied, herein private respondents filed with the Court of Appeals a Petition for Certiorari and
Prohibition praying for the nullification of the orders dated April 18, 1986 and May 19,
1986.chanroblesvirtualawlibrarychanrobles virtual law library

Meanwhile, a case for Carnapping docketed as I.S. No. 86-185, entitled "Alex De Leon,
Complainant, vs. Romeo Chua, Respondent" pending preliminary investigation before the
Office of the City Fiscal of Cebu City was provisionally dismissed upon motion of Romeo Chua
with the following reservation: "without prejudice to its reopening once the issue of ownership
is resolved", (Rollo, p. 62).chanroblesvirtualawlibrarychanrobles virtual law library

In a decision dated May 17, 1987, the Court of Appeals reversed the Regional Trial Court of
Cebu City Branch VIII, and nullified the questioned orders. The appellate court ordered the
dismissal of the Replevin action, and directed that possession of the subject vehicle be restored
to Canoy. It applied the ruling in the case of Pagkalinawan vs. Gomez (21 SCRA 1275 [1967])
which held:

Once a Court of First Instance has been informed that a search warrant has been issued by
another court of first instance, it cannot require a sheriff or any proper officer of the court to
take the property subject of the replevin action, if theretofore it came into custody of another
public officer by virtue of a search warrant. Only the court of first instance that issued such a
search warrant may order its release.

Furthermore, it was also pointed out in the same case that the validity of a search warrant may
only be questioned in the same court that issued it.chanroblesvirtualawlibrarychanrobles
virtual law library

Petitioner moved for a reconsideration of the decision, but the respondent court denied the
same. Thus, petitioner filed this appeal by certiorari. The parties submitted their respective
memoranda, and thereafter the case was deemed submitted for
decision.chanroblesvirtualawlibrarychanrobles virtual law library

The issue presented before the Court is whether or not the validity of a seizure made pursuant
to a search warrant issued by a court can be questioned in another branch of the same court,
where the criminal action filed in connection with which the search warrant was issued, had
been dismissed provisionally.chanroblesvirtualawlibrarychanrobles virtual law library
At the outset, it must be pointed out that the ruling made by the Office of the City Fiscal in the
complaint for carnapping was erroneous. It held: ". . . the preliminary investigation of that case
is premature until such time that the issue of ownership will be resolved by the Court of
Appeals, so that the instant case is hereby dismissed provisionally without prejudice to its reopening
once the issue of ownership is resolved in favor of complainant." (emphasis
supplied).chanroblesvirtualawlibrarychanrobles virtual law library

A criminal prosecution for carnapping need not establish the fact that complainant therein is the
absolute owner of the motor vehicle. What is material is the existence of evidence which would
show that respondent took the motor vehicle belonging to another. The Anti-Carnapping Law
or Republic Act No. 6539 punishes as carnapping the taking with intent to gain, of a motor
vehicle belonging to another person, without the latter's consent or by means of violence or
intimidation of person or by using force upon things.chanroblesvirtualawlibrarychanrobles
virtual law library

Another aspect which needs to be stressed is the fact that since a preliminary investigation is
not part of the trial, the dismissal of a case by the fiscal will not constitute double jeopardy and
hence there is no bar to the filing of another complaint for the same offense (People vs. Medted,
68 Phil. 435).chanroblesvirtualawlibrarychanrobles virtual law library

We find no merit in the main issue presented before Us. Petitioner seeks a reversal of a decision
of the Court of Appeals which relied on the decision in Pagkalinawan vs. Gomez
(supra).chanroblesvirtualawlibrarychanrobles virtual law library

The principle followed among courts in the dispensation of justice is that a judge who presides
in a branch of a court cannot modify or annul the orders issued by another branch of the same
court, since the two (2) courts are of the same rank, and act independently but coordinately
(Montesa vs. Manila Cordage Co., 92 Phil. 25 [1952]).chanroblesvirtualawlibrarychanrobles
virtual law library

It is a basic tenet of civil procedure that replevin will not lie for property in custodia legis. A
thing is in custodia legis when it is shown that it has been and is subjected to the official custody
of a judicial executive officer in pursuance of his execution of a legal writ (Bagalihog vs.
Fernandez, 198 SCRA 614 [1991]). The reason posited for this principle is that if it was
otherwise, there would be interference with the possession before the function of the law had
been performed as to the process under which the property was taken. Thus, a defendant in an
execution or attachment cannot replevy goods in the possession of an officer under a valid
process, although after the levy is discharged, an action to recover possession will lie (Francisco,
Revised Rules of Court in the Philippines: Provisional Remedies, p. 402
[1985]).chanroblesvirtualawlibrarychanrobles virtual law library

The Court had occasion to rule on this issue in the case of Vlasons Enterprises Corporation vs.
Court of Appeals (155 SCRA 186 [1987]). In the aforementioned case, two (2) propeller pieces
were seized on the strength of a search warrant issued by the Court of First Instance of Manila
Branch XVIII. After the seizure, criminal complaints were filed against the alleged thieves.
However, the complaints were later on dismissed. Five (5) months later, a civil action for the
recovery of the possession of the propellers were filed in the Court of First Instance of Manila
Branch XXIX. The latter court granted the motion for repossession of the propellers. On appeal
this Court held:

The proceeding for the seizure of the property in virtue of a search warrant does not end with
the actual taking of the property . . . and its delivery . . ., to the court . . . . It is merely the first
step in the process to determine the character of the seized property. That determination is done
in the criminal action involving the crime or crimes in connection with which the search
warrant was issued. Hence, such a criminal action should be prosecuted, or commenced if not
yet instituted, and prosecuted. The outcome of the criminal action will dictate the disposition of
the seized property. (Vlasons Enterprises Corp. vs. Court of Appeals, supra.)

In the Vlasons case, the Court differentiated the case brought before it therein, from
the Pagkalinawan case. It stated that in the Pagkalinawancase, there was a conflict in jurisdiction.
On the other hand, in the Vlasons case, it was certain that no criminal case would ensue
subsequent to or in connection with the search warrant, hence no conflict in jurisdiction or in
the ultimate disposition of the property could arise. Thus, where personal property is seized
under a search warrant and it appears that the seizure will not be followed by the filing of any
criminal action, but there are conflicting claims asserted over the seized property, the
appropriate remedy is the institution of an ordinary civil action by any interested party, or of an
interpleader action by the Government itself, in the proper competent court to which the seizing
court shall transfer custody of the articles. Another branch of the same court, in an action to
recover said property and during the pendency thereof, cannot order the delivery of said
personal property to therein plaintiff pendente lite.chanroblesvirtualawlibrarychanrobles virtual
law library

Construing the Pagkalinawan case together with the Vlasons case, we rule that where personal
property is seized under a search warrant and there is reason to believe that the seizure will not
anymore be followed by the filing of a criminal and there are conflicting claims over the seized
property, the proper remedy is the filing of an action for replevin, or an interpleader filed by the
Government in the proper court, not necessarily the same one which issued the search warrant;
however, where there is still a probability that the seizure will be followed by the filing of a
criminal action, as in the case at bar where the case for carnapping was "dismissed provisionally,
without prejudice to its reopening once the issue of ownership is resolved in favor of complainant"
(emphasis supplied), or the criminal information has actually been commenced, or filed, and
actually prosecuted, and there are conflicting claims over the property seized, the proper
remedy is to question the validity of the search warrant in the same court which issued it and
not in any other branch of the said court.chanroblesvirtualawlibrarychanrobles virtual law
library

Thus, the Regional Trial Court of Cebu Branch VIII erred when it ordered the transfer of
possession of the property seized to petitioner when the latter filed the action for replevin. It
should have dismissed the case since by virtue of the "provisional dismissal", of the carnapping
case there is still a probability that a criminal case would be filed, hence a conflict in jurisdiction
could still arise. The basic principle that a judge who presides in one court cannot annul or
modify the orders issued by another branch of the same court because they are co-equal and
independent bodies acting coordinately, must always be
adhered to.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, the petition is denied. The decision of the Court of Appeals dated May 7, 1987 is
AFFIRMED.chanroblesvirtualawlibrarychanrobles virtua

FIRST DIVISION

[A.M. No. P-05-1942. January 17, 2005]

ALIBSAR ADOMA, complainant, vs. ROMEO GATCHECO, Sheriff III, and EUGENIO
TAGUBA, Process Server, of Branches 1 and 2, respectively, of the Municipal Trial
Court in Cities of Santiago City, respondents.

DECISION
YNARES-SANTIAGO, J.:

The instant administrative complaint filed against respondents for violation of Republic Act
No. 3019 (Anti-Graft and Corrupt Practices Act) and conduct unbecoming a court employee,
arose from the execution of a writ of replevin in Adoma v. Spouses Edmundo Andres and Luzviminda
Andres, docketed as Civil Case No. 1404-1-669, for recovery of possession of motor vehicle with
prayer for the issuance of a writ of replevin before Branch 1 of the Municipal Trial Court in Cities
(MTCC) of Santiago City, presided by Judge Ruben Plata.
Complainant Alibsar Adoma claimed that on August 16, 2003 a writ of replevin[1] for the
recovery of an L-300 van was issued in his favor. On the same day, respondent sheriff Romeo
Gatcheco implemented the writ. He was accompanied by respondent Eugenio Taguba, a process
server of Branch 2 of MTCC, Santiago City, who volunteered to assist respondent sheriff. After
the two respondents seized the vehicle, they demanded payment of P8,000.00, allegedly promised
by complainant but the latter was able to give only P1,000.00 and another P1,000.00 the following
day.[2]
The writ of replevin stated that the vehicle will be delivered to complainant after 5 days from
the implementation thereof. With the vehicle still undelivered on the 7th day, complainant
threatened to file an administrative case against respondent sheriff. Finally, on August 29, 2003,
the latter was forced to release the vehicle to complainant. Respondents, however, continued to
demand P6,000.00, hence complainant filed the instant administrative case.[3]
Respondents, on the other hand, denied soliciting and receiving any amount from the
complainant. Respondent sheriff admitted, however, that complainant promised to give him
P10,000.00 if the vehicle will be sold.[4]
On September 10, 2003, the Court referred the instant administrative complaint to Judge Fe
Albano Madrid, Executive Judge, Regional Trial Court, Santiago City, Isabela, for investigation,
report and recommendation.[5]
In her investigation report, Judge Madrid found the testimony of complainant which was
corroborated by two witnesses, to be more credible. She refused to believe the claim of respondent
sheriff that he did not release the vehicle to complainant after 5 days from the implementation of
the writ on August 16, 2003, because he was awaiting instructions from Judge Plata. However,
she found that respondent sheriff did not actually demand money for the implementation of the
writ because it was complainant who promised to give money in exchange for the
implementation of the writ of replevin. Nevertheless, she concluded that respondent sheriff is
guilty of misconduct considering that he accepted partial payment and insisted on its full
payment.
As to respondent Taguba, Judge Madrid recommended that he be reprimanded for trying to
abet the misconduct of respondent sheriff.
Upon receipt of the report of Judge Madrid, the Court referred the case to the Office of the
Court Administrator (OCA) for evaluation, report and recommendation.[6]
In its Memorandum dated June 4, 2004, the OCA affirmed the investigating Judges report. It
recommended that respondent sheriff be fined in the amount of P5,000.00 for conduct
unbecoming a court employee and that respondent Taguba be reprimanded for trying to abet the
misconduct of a fellow employee of another court.
On July 5, 2004, the Court required the parties to manifest whether they are willing to submit
the case for resolution based on the pleadings filed. However, to date, the parties have yet to file
their manifestation. Hence, we are constrained to dispense the filing of such manifestation.
The Court agrees with the findings of the investigating Judge and the OCA that respondents
received the amount of P2,000.00 and that they demanded the payment of an additional P6,000.00
from complainant. The testimony of complainant before the investigating Judge is worthy of
belief because the same was not only candid and direct but also corroborated by two witnesses
who attested to the veracity of complainants accusations. The writ of replevin has been
implemented and the vehicle is now in complainants possession.
Under Section 9, Rule 141 of the Rules of Court, the procedure for the execution of writs and
other processes are: first, the sheriff must make an estimate of the expenses to be incurred by
him; second, he must obtain court approval for such estimated expenses; third, the approved
estimated expenses shall be deposited by the interested party with the Clerk of Court and ex-
oficio sheriff; fourth, the Clerk of Court shall disburse the amount to the executing sheriff; and fifth,
the executing sheriff shall liquidate his expenses within the same period for rendering a return
on the writ. Any amount received by the sheriff in excess of the lawful fees allowed by the Rules
of Court is an unlawful exaction which renders him liable for grave misconduct and gross
dishonesty.[7]
In the instant case, respondent sheriff totally disregarded the aforecited procedure. He failed
to make and submit estimate of the sheriffs expenses. The amounts received and demanded by
him are therefore unauthorized fees. His acts of accepting and soliciting said monetary
considerations make him liable not only for conduct unbecoming a court employee but also for
grave misconduct and dishonesty.
As correctly found by the OCA, respondent sheriff deliberately failed to place complainant
in possession of the vehicle after five days from the implementation of the writ because the latter
failed to give the whole amount he promised. Since the adverse party did not object to the
complainants bond nor posted a redelivery bond to recover possession of the vehicle taken under
the writ of replevin, respondent sheriff is under obligation to deliver the van to complainant.
However, it took respondent sheriff 13 days before he released the vehicle to complainant, a clear
violation of Section 6, Rule 60 of the 1997 Revised Rules of Civil Procedure which provides

SEC. 6. Disposition of property by sheriff.If within five (5) days after the taking of the
property by the sheriff, the adverse party does not object to the sufficiency of the bond, or of the
surety or sureties thereon; or if the adverse party so objects and the court affirms its approval of
the applicants bond or approves a new bond, or if the adverse party requires the return of the
property but his bond is objected to and found insufficient and he does not forthwith file an
approved bond, the property shall be delivered to the applicant. If for any reason the property
is not delivered to the applicant, the sheriff must return it to the adverse party. (6a)

In Apuyan, Jr. v. Sta Isabel,[8] citing Alvarez, Jr. v. Martin,[9] a sheriff was similarly found guilty
of grave misconduct, dishonesty and conduct grossly prejudicial to the best interest of the service
for receiving and soliciting money from the complainant and for deliberately ignoring the rules
for the implementation of a writ of attachment, thus

Furthermore, respondents act of demanding money and receiving P1,500.00 from the
complainant for the lunch and merienda of the policemen who will accompany him in executing
the decision of the Court is a clear violation of section 9, Rule 141. The Rules require the sheriff
to estimate his expenses in the execution of the decision. The prevailing party will then deposit
the said amount to the Clerk of Court who will disburse the amount to the sheriff, subject to
liquidation. Any unspent amount will have to be returned to the prevailing party. In this case,
no estimate of sheriffs expenses was submitted to the court by respondent. In fact, the money
which respondent deputy sheriff had demanded and received from complainant was not
among those prescribed and authorized by the Rules of Court. This Court has ruled that any
amount received by the sheriff in excess of the lawful fees allowed by the Rules of Court is an
unlawful exaction and renders him liable for grave misconduct and gross dishonesty.

Finally, the procedure for execution of a final judgment is the same as that in carrying out a writ
of preliminary attachment, as set forth in Rule 141 of the Rules of Court

Clearly, in this case, respondent not only utterly failed to live up to the high ethical standards
required of a sheriff, but also, he totally ignored Section 9, Rule 141 of the Rules of Court.
Respondent failed to demonstrate that he followed the procedure laid down by Rule 141.

The OCAs recommendation that respondent be found guilty of grave misconduct, dishonesty
and conduct grossly prejudicial to the best interest of the service is firmly supported by the
records of this case.

Section 52, Rule IV of the Uniform Rules on Administrative Cases in the Civil Service
(Resolution No. 991936, effective September 27, 1999), provides

Section 52. Classification of Offenses. - Administrative offenses with corresponding penalties are
classified into grave, less grave or light, depending on their gravity or depravity and effects on
the government service.
A. The following are grave offenses with their corresponding penalties:

1. Dishonesty
1st Offense Dismissal

3. Grave Misconduct
1st Offense Dismissal

20. Conduct prejudicial to the best interest of the service

1st offense Suspension (6 mos. 1 day to 1 year)


2nd offense Dismissal

The imposable penalty for commission of the first offense of grave misconduct and
dishonesty is dismissal. In the cases of Apuyan, Jr. v. Sta Isabel,[10] and Albello v. Galvez,[11]however,
the fact that the respondent sheriffs were first time offenders was considered a mitigating
circumstance, hence they were meted the penalty of 1 year suspension instead of dismissal.
Accordingly, since this is respondent sheriffs first offense, the penalty of 1 year suspension will
suffice.
With respect to respondent Taguba, we find the sanction of reprimand too light a penalty for
his transgression. Although it was not him who deliberately delayed the delivery of the vehicle
to force complainant to yield to the sheriffs demand, and that complainant did not point to him
as the one who received the amount of P2,000.00, respondent Taguba assisted respondent sheriff
in soliciting money from complainant. Note that respondent Taguba is a process server of another
branch of the MTCC of Santiago City but he volunteered to aid respondent sheriff in the
implementation of the writ. He not only demanded P8,000.00 from complainant after the
implementation of the writ but also tagged along with respondent sheriff when the latter tried to
exact P6,000.00 from complainant before the vehicle was released to the latter. Furthermore,
respondent Taguba had been previously suspended for 1 month in Albano-Madrid v.
Apolonio,[12] for simple misconduct in playing cards with other court personnel inside the Judges
chambers during office hours. Indeed, reprimand is not commensurate to his incorrigible
conduct. Under the circumstances, the penalty of 6 months suspension is appropriate.
At the grassroots of our judicial machinery, sheriffs are indispensably in close contact with
the litigants, hence, their conduct should be geared towards maintaining the prestige and
integrity of the court, for the image of a court of justice is necessarily mirrored in the conduct,
official or otherwise, of the men and women who work thereat, from the judge to the least and
lowest of its personnel; hence, it becomes the imperative sacred duty of each and everyone in the
court to maintain its good name and standing as a temple of justice.[13]
WHEREFORE, in view of all the foregoing, respondent Romeo Gatcheco, Sheriff III,
Municipal Trial Court in Cities, Branch 1, Santiago City is found GUILTY of Grave Misconduct,
Dishonesty and Conduct Grossly Prejudicial to the Best Interest of the Service and is
SUSPENDED for one (1) year, without pay. Respondent Eugenio Taguba, Process Server,
Municipal Trial Court in Cities, Branch 2, Santiago City is found GUILTY of Conduct Prejudicial
to the Best Interest of the Service and is SUSPENDED for six (6) months without pay.
Respondents are warned that a repetition of the same or any other act of infraction in the
future shall be dealt with most severely.
SO ORDERED.

SECOND DIVISION

ADVENT CAPITAL AND G.R. No. 183018

FINANCE CORPORATION,

Petitioner, Present:

CARPIO, J., Chairperson,

LEONARDO-DE CASTRO,*

- versus - BRION,

PEREZ, and

SERENO, JJ.

ROLAND YOUNG, Promulgated:

Respondent. August 3, 2011

x-----------------------------------------------------------------------------------------x

DECISION
CARPIO, J.:

The Case

This petition for review1 assails the 28 December 2007 Decision2 and 15 May 2008 Resolution3 of
the Court of Appeals in CA-G.R. SP No. 96266. The Court of Appeals set aside the 24 March
2006 and 5 July 2006 Orders4 of the Regional Trial Court of Makati City, Branch 147, and
directed petitioner Advent Capital and Finance Corporation to return the seized vehicle to
respondent Roland Young. The Court of Appeals denied the motion for reconsideration.

The Antecedents

The present controversy stemmed from a replevin suit instituted by petitioner Advent Capital
and Finance Corporation (Advent) against respondent Roland Young (Young) to recover the
possession of a 1996 Mercedes Benz E230 with plate number UMN-168, which is registered in
Advents name.5

Prior to the replevin case, or on 16 July 2001, Advent filed for corporate rehabilitation with the
Regional Trial Court of Makati City, Branch 142 (rehabilitation court).6

On 27 August 2001, the rehabilitation court issued an Order (stay order) which states that the
enforcement of all claims whether for money or otherwise, and whether such enforcement is by
court action or otherwise, against the petitioner (Advent), its guarantors and sureties
not solidarily liable with it, is stayed.7

On 5 November 2001, Young filed his Comment to the Petition for Rehabilitation, claiming,
among others, several employee benefits allegedly due him as Advents former president and
chief executive officer.
On 6 November 2002, the rehabilitation court approved the rehabilitation plan submitted by
Advent. Included in the inventory of Advents assets was the subject car which remained in
Youngs possession at the time.

Youngs obstinate refusal to return the subject car, after repeated demands, prompted Advent to
file the replevin case on 8 July 2003. The complaint, docketed as Civil Case No. 03-776, was
raffled to the Regional Trial Court of Makati City, Branch 147 (trial court).

After Advents posting of P3,000,000 replevin bond, which was double the value of the subject
car at the time, through Stronghold Insurance Company, Incorporated (Stronghold), the trial
court issued a Writ of Seizure8 directing the Sheriff to seize the subject car from Young. Upon
receipt of the Writ of Seizure, Young turned over the car to Advent,9 which delivered the same
to the rehabilitation receiver.10

Thereafter, Young filed an Answer alleging that as a former employee of Advent, he had the
option to purchase the subject car at book value pursuant to the company car plan and to offset
the value of the car with the proceeds of his retirement pay and stock option plan. Young
sought the (1) execution of a deed of sale over the subject car; and (2) determination and
payment of the net amount due him as retirement benefits under the stock option plan.

Advent filed a Reply with a motion to dismiss Youngs counterclaim, alleging that the
counterclaim did not arise from or has no logical relationship with the issue of ownership of the
subject car.

After issues have been joined, the parties entered into pre-trial on 2 April 2004, which resulted
in the issuance of a pre-trial order of even date reciting the facts and the issues to be resolved
during the trial.

On 28 April 2005, the trial court issued an Order dismissing the replevin case without prejudice
for Advents failure to prosecute. In the same order, the trial court dismissed Youngs
counterclaim against Advent for lack of jurisdiction. The order pertinently reads:
It appears that as of July 28, 2003, subject motor vehicle has been turned over to the
plaintiff, thru its authorized representative, and adknowledged by the parties respective
counsels in separate Manifestations filed. To date, no action had been taken by the
plaintiff in the further prosecution of this case. Accordingly, this case is ordered
dismissed without prejudice on the ground of failure to prosecute.

Anent plaintiffs Motion to Dismiss defendant Youngs counterclaim for benefits under
the retirement and stock purchase plan, the Court rules as follows: The only issue in this
case is who is entitled to the possession of the subject motor vehicle. This issue may have
a connection, but not a necessary connection with defendants rights under the
retirement plan and stock purchase plan as to be considered a compulsory counterclaim.

xxx

Notably, defendants claim is basically one for benefits under and by virtue of his
employment with the plaintiff, and the subject vehicle is merely an incident in that
claim. Said claim is properly ventilated, as it is resolvable by, the Rehabilitation Court
which has jurisdiction and has acquired jurisdiction, to the exclusion of this Court.
Accordingly, plaintiffs Motion To Dismiss defendant Youngs counterclaim is granted.11

On 10 June 2005, Young filed a motion for partial reconsideration of the dismissal order with
respect to his counterclaim.

On 8 July 2005, Young filed an omnibus motion, praying that Advent return the subject car and
pay him P1.2 million in damages (f)or the improper and irregular seizure of the subject car, to
be charged against the replevin bond posted by Advent through Stronghold.

On 24 March 2006, the trial court issued an Order denying Youngs motion for partial
reconsideration, viz:
In the instant case, defendant, in his counterclaim anchored her [sic] right of possession
to the subject vehicle on his alleged right to purchase the same under the company car
plan. However, considering that the Court has already declared that it no longer has
jurisdiction to try defendants counterclaim as it is now part of the rehabilitation
proceedings before the corporate court concerned, the assertions in the Motion for
Reconsiderations (sic) will no longer stand.

On the other hand, the plaintiff did not file a Motion for Reconsideration of the same
Order, dismissing the complaint for failure to prosecute, within the reglementary period.
Hence, the same has attained finality.

Defendant alleged that the dismissal of the case resulted in the dissolution of the writ.
Nonetheless, the Court deems it proper to suspend the resolution of the return of the
subject vehicle. In this case, the subject vehicle was turned over to plaintiff by virtue of a
writ of replevin validly issued, the latter having sufficiently shown that it is the
absolute/registered owner thereof. This was not denied by the defendant. Plaintiffs
ownership includes its right of possession. The case has been dismissed without a
decision on the merits having been rendered. Thus, to order the return of the vehicle to
one who is yet to prove his right of possession would not be proper.

Accordingly, the Motion for Partial Reconsideration is denied.12

On 8 June 2006, Young filed a motion to resolve his omnibus motion.

In an Order dated 5 July 2006, the trial court denied the motion to resolve, to wit:

In the instant case, the Court suspended the resolution of the return of the vehicle to
defendant Roland Young. It should be noted that the writ of replevin was validly issued
in favor of the plaintiff and that it has sufficiently established ownership over the subject
vehicle which includes its right to possess. On the other hand, the case (Olympia
International vs. Court of Appeals) cited by defendant finds no application to this case,
inasmuch as in the former the Court has not rendered judgment affirming plaintiffs
(Olympia) right of possession on the property seized. Moreover, the Court, in the Order
dated April 28, 2005, has already denied defendants counterclaim upon which he based
his right of possession on the ground of lack of jurisdiction. Accordingly, the Court
reiterates its previous ruling that to order the return of the subject vehicle to defendant
Young, who is yet to prove his right of possession before the Rehabilitation Court would
not be proper.

WHEREFORE, there being no new and substantial arguments raised, the Motion to
Resolve is denied.13

Young filed a petition for certiorari and mandamus with the Court of Appeals seeking to annul
the trial courts Orders of 24 March 2006 and 5 July 2006.

The Court of Appeals Ruling

In his petition before the Court of Appeals, Young argued mainly that the trial court committed
grave abuse of discretion amounting to lack or excess of jurisdiction in (1) not directing the
return of the subject vehicle to him; (2) refusing to hold a hearing to determine the damages to
be recovered against the replevin bond; and (3) dismissing his counterclaim.

The Court of Appeals ruled in favor of Young and annulled the assailed rulings of the trial
court. The Court of Appeals held:

It is noteworthy that the case was dismissed by the court a quo for failure of Advent to
prosecute the same. Upon dismissal of the case, the writ of seizure issued as an incident
of the main action (for replevin) became functus officio and should have been recalled or
lifted. Since there was no adjudication on the merits of the case, the issue of who
between Advent and petitioner has the better right to possess the subject car was not
determined. As such, the parties should be restored to their status immediately before
the institution of the case.
The Supreme Courts ruling in Olympia International, Inc. vs. Court of Appeals (supra)
squarely applies to the present controversy, to wit:

Indeed, logic and equity demand that the writ of replevin be cancelled. Being
provisional and ancillary in character, its existence and efficacy depended on the
outcome of the case. The case having been dismissed, so must the writs existence and
efficacy be dissolved. To let the writ stand even after the dismissal of the case would be
adjudging Olympia as the prevailing party, when precisely, no decision on the merits
had been rendered. The case having been dismissed, it is as if no case was filed at all and
the parties must revert to their status before the litigation.

Indeed, as an eminent commentator on Remedial Law expounds:

The plaintiff who obtains possession of the personal property by a writ of replevin does
not acquire absolute title thereto, nor does the defendant acquire such title
by rebonding the property, as they only hold the property subject to the final judgment
in the action. (I Regalado, Remedial Law Compendium, Eighth Revised Edition, p. 686)

Reversion of the parties to the status quo ante is the consequence ex proprio vigore of the
dismissal of the case. Thus, in Laureano vs. Court of Appeals (324 SCRA 414), it was held:

(A)lthough the commencement of a civil action stops the running of the statute of
prescription or limitations, its dismissal or voluntary abandonment by plaintiff leaves
the parties in exactly the same position as though no action had been commenced at all.

By the same token, return of the subject car to petitioner pending rehabilitation of
Advent does not constitute enforcement of claims against it, much more adjudication on
the merits of petitioners counterclaim. In other words, an order for such return is not a
violation of the stay order, which was issued by the rehabilitation court on August 27,
2001. x x x

Corollarily, petitioners claim against the replevin bond has no connection at all with the
rehabilitation proceedings. The claim is not against the insolvent debtor (Advent) but
against bondsman, Stronghold. Such claim is expressly authorized by Sec. 10, Rule 60, in
relation to Sec. 20, Rule 57, id., x x x14

The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, premises considered, the instant petition is PARTLY GRANTED. The


orders of the Regional Trial Court dated March 24, 2006 and July 5, 2006 are
ANNULLED and SET ASIDE in so far as they suspended resolution of petitioners
motion for, and/or disallowed, the return of the subject car to petitioner. Accordingly,
respondent Advent Capital and Finance Corporation is directed to return the subject car
to petitioner.

The Regional Trial Court of Makati City (Branch 147) is directed to conduct a hearing on,
and determine, petitioners claim for damages against the replevin bond posted by
Stronghold Insurance Co.

SO ORDERED.15

Advent filed a motion for reconsideration, which was denied by the Court of Appeals in a
Resolution dated 15 May 2008.

The Issue
The main issue in this case is whether the Court of Appeals committed reversible error in (1)
directing the return of the seized car to Young; and (2) ordering the trial court to set a hearing
for the determination of damages against the replevin bond.

The Courts Ruling

The petition is partially meritorious.

On returning the seized vehicle to Young

We agree with the Court of Appeals in directing the trial court to return the seized car to Young
since this is the necessary consequence of the dismissal of the replevin case for failure to
prosecute without prejudice. Upon the dismissal of the replevin case for failure to prosecute, the
writ of seizure, which is merely ancillary in nature, became functus officio and should have been
lifted. There was no adjudication on the merits, which means that there was no determination of
the issue who has the better right to possess the subject car. Advent cannot therefore retain
possession of the subject car considering that it was not adjudged as the prevailing party
entitled to the remedy of replevin.

Contrary to Advents view, Olympia International Inc. v. Court of Appeals16 applies to this case. The
dismissal of the replevin case for failure to prosecute results in the restoration of the parties
status prior to litigation, as if no complaint was filed at all. To let the writ of seizure stand after
the dismissal of the complaint would be adjudging Advent as the prevailing party, when
precisely no decision on the merits had been rendered. Accordingly, the parties must be
reverted to their status quo ante. Since Young possessed the subject car before the filing of
the replevin case, the same must be returned to him, as if no complaint was filed at all.
Advents contention that returning the subject car to Young would constitute a violation of the
stay order issued by the rehabilitation court is untenable. As the Court of Appeals correctly
concluded, returning the seized vehicle to Young is not an enforcement of a claim against
Advent which must be suspended by virtue of the stay order issued by the rehabilitation court
pursuant to Section 6 of the Interim Rules on Corporate Rehabilitation (Interim Rules).17 The
issue in the replevin case is who has better right to possession of the car, and it was Advent that
claimed a better right in filing the replevin case against Young. In defense, Young claimed a
better right to possession of the car arising from Advents car plan to its executives, which he
asserts entitles him to offset the value of the car against the proceeds of his retirement pay and
stock option plan.

Young cannot collect a money claim against Advent within the contemplation of the Interim
Rules. The term claim has been construed to refer to debts or demands of a pecuniary nature, or
the assertion to have money paid by the company under rehabilitation to its creditors.18 In
the replevin case, Young cannot demand that Advent pay him money because such payment,
even if valid, has been stayed by order of the rehabilitation court. However, in the replevin case,
Young can raise Advents car plan, coupled with his retirement pay and stock option plan, as
giving him a better right to possession of the car. To repeat, Young is entitled to recover the
subject car as a necessary consequence of the dismissal of the replevin case for failure to
prosecute without prejudice.

On the damages against the replevin bond

Section 10, Rule 60 of the Rules of Court19 governs claims for damages on account of improper
or irregular seizure in replevin cases. It provides that in replevin cases, as in receivership and
injunction cases, the damages to be awarded upon the bond shall be claimed, ascertained, and
granted in accordance with Section 20 of Rule 57 which reads:

Sec. 20. 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 before the trial or before appeal is perfected or before the judgment
becomes executory, with due notice to the attaching obligee or 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. e
If the judgment of the appellate court be favorable to the party against whom the
attachment was issued, he must claim damages sustained during the pendency of the
appeal by filing an application in the appellate court with notice to the party in
whose favor the attachment was issued or his surety or sureties, before the judgment of
the appellate court becomes executory. The appellate court may allow the application to
be heard and decided by the trial court.

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 obligeenot exempt from execution should the bond or deposit
given by the latter be insufficient or fail to fully satisfy the award.

The above provision essentially allows the application to be filed at any time before the
judgment becomes executory.20 It should be filed in the same case that is the main action,21 and
with the court having jurisdiction over the case at the time of the application.22

e remed

In this case, there was no application for damages against Stronghold resulting from the
issuance of the writ of seizure before the finality of the dismissal of the complaint for failure to
prosecute. It appears that Young filed his omnibus motion claiming damages against
Stronghold after the dismissal order issued by the trial court on 28 April 2005 had attained
finality. While Young filed a motion for partial reconsideration on 10 June 2005, it only
concerned the dismissal of his counterclaim, without any claim for damages against
the replevin bond. It was only on 8 July 2005 that Young filed an omnibus motion seeking
damages against the replevin bond, after the dismissal order had already become final for
Advents non-appeal of such order. In fact, in his omnibus motion, Young stressed the finality of
the dismissal order.23 Thus, Young is barred from claiming damages against the replevin bond.

In Jao v. Royal Financing Corporation,24 the Court held that defendant therein was precluded from
claiming damages against the surety bond since defendant failed to file the application for
damages before the termination of the case, thus:

The dismissal of the case filed by the plaintiffs-appellees on July 11, 1959, had become
final and executory before the defendant-appellee corporation filed its motion for
judgment on the bond on September 7, 1959. In the order of the trial court, dismissing
the complaint, there appears no pronouncement whatsoever against the surety bond.
The appellee-corporation failed to file its proper application for damages prior to the
termination of the case against it. It is barred to do so now. The prevailing party, if such
would be the proper term for the appellee-corporation, having failed to file its
application for damages against the bond prior to the entry of final judgment, the
bondsman-appellant is relieved of further liability thereunder.

Since Young is time-barred from claiming damages against the replevin bond, the dismissal
order having attained finality after the application for damages, the Court of Appeals erred in
ordering the trial court to set a hearing for the determination of damages against
the replevin bond.

WHEREFORE, the Court GRANTS the petition IN PART. The Court SETS ASIDE the portion
in the assailed decision of the Court of Appeals in CA-G.R. SP No. 96266 ordering the trial court
to set a hearing for the determination of damages against the replevin bond.