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THIRDDIVISION

[G.R.No.137705.August22,2000]

SERGS PRODUCTS, INC., and SERGIO T. GOQUIOLAY,

petitioners,vs.PCILEASINGANDFINANCE,INC.,respondent.
DECISION
PANGANIBAN,J.:
After agreeing to a contract stipulating that a real or immovable property be
consideredaspersonalormovable,apartyisestoppedfromsubsequentlyclaiming
otherwise.Hence,suchpropertyisapropersubjectofawritofreplevinobtainedby
theothercontractingparty.
TheCase
Before us is a Petition for Review on Certiorari assailing the January 6, 1999
Decision[1]oftheCourtofAppeals(CA)[2]inCAGRSPNo.47332anditsFebruary
26, 1999 Resolution[3] denying reconsideration. The decretal portion of the CA
Decisionreadsasfollows:
WHEREFORE,premisesconsidered,theassailedOrderdatedFebruary18,1998and
ResolutiondatedMarch31,1998inCivilCaseNo.Q9833500areherebyAFFIRMED.The
writofpreliminaryinjunctionissuedonJune15,1998isherebyLIFTED.[4]
InitsFebruary18,1998Order,[5]theRegionalTrialCourt(RTC)ofQuezonCity
(Branch218)[6]issuedaWritofSeizure.[7]TheMarch18,1998Resolution[8]denied
petitioners Motion for Special Protective Order, praying that the deputy sheriff be
enjoinedfromseizingimmobilizedorotherrealpropertiesin(petitioners)factoryin
Cainta,Rizalandtoreturntotheiroriginalplacewhateverimmobilizedmachineries
orequipmentshemayhaveremoved.[9]
TheFacts
TheundisputedfactsaresummarizedbytheCourtofAppealsasfollows:[10]
OnFebruary13,1998,respondentPCILeasingandFinance,Inc.(PCILeasingforshort)
filedwiththeRTCQCacomplaintfor[a]sumofmoney(AnnexE),withanapplicationfora
writofreplevindocketedasCivilCaseNo.Q9833500.
OnMarch6,1998,uponanexparteapplicationofPCILeasing,respondentjudgeissueda
writofreplevin(AnnexB)directingitssherifftoseizeanddeliverthemachineriesand
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equipmenttoPCILeasingafter5daysanduponthepaymentofthenecessaryexpenses.
OnMarch24,1998,inimplementationofsaidwrit,thesheriffproceededtopetitioners
factory,seizedonemachinerywith[the]wordthathe[would]returnfortheother
machineries.
OnMarch25,1998,petitionersfiledamotionforspecialprotectiveorder(AnnexC),invoking
thepowerofthecourttocontroltheconductofitsofficersandamendandcontrolits
processes,prayingforadirectiveforthesherifftodeferenforcementofthewritofreplevin.
ThismotionwasopposedbyPCILeasing(AnnexF),onthegroundthattheproperties
[were]stillpersonalandthereforestillsubjecttoseizureandawritofreplevin.
IntheirReply,petitionersassertedthatthepropertiessoughttobeseized[were]immovable
asdefinedinArticle415oftheCivilCode,thepartiesagreementtothecontrary
notwithstanding.Theyarguedthattogiveeffecttotheagreementwouldbeprejudicialto
innocentthirdparties.TheyfurtherstatedthatPCILeasing[was]estoppedfromtreating
thesemachineriesaspersonalbecausethecontractsinwhichtheallegedagreement[were]
embodied[were]totallyshamandfarcical.
OnApril6,1998,thesheriffagainsoughttoenforcethewritofseizureandtakepossession
oftheremainingproperties.Hewasabletotaketwomore,butwaspreventedbythe
workersfromtakingtherest.
OnApril7,1998,theywentto[theCA]viaanoriginalactionforcertiorari.
RulingoftheCourtofAppeals
Citing the Agreement of the parties, the appellate court held that the subject
machineswerepersonalproperty,andthattheyhadonlybeenleased,notowned,
by petitioners. It also ruled that the words of the contract are clear and leave no
doubt upon the true intention of the contracting parties. Observing that Petitioner
Goquiolaywasanexperiencedbusinessmanwhowasnotunfamiliarwiththeways
of the trade, it ruled that he should have realized the import of the document he
signed.TheCAfurtherheld:
Furthermore,toaccordmerittothispetitionwouldbetopreemptthetrialcourtinrulingupon
thecasebelow,sincethemeritsofthewholematterarelaiddownbeforeusviaapetition
whosesolepurposeistoinquireupontheexistenceofagraveabuseofdiscretiononthe
partofthe[RTC]inissuingtheassailedOrderandResolution.Theissuesraisedhereinare
propersubjectsofafullblowntrial,necessitatingpresentationofevidencebybothparties.
Thecontractisbeingenforcedbyone,and[its]validityisattackedbytheotheramatterxxx
whichrespondentcourtisinthebestpositiontodetermine.
Hence,thisPetition.[11]
TheIssues
In their Memorandum, petitioners submit the following issues for our
consideration:
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A.WhetherornotthemachineriespurchasedandimportedbySERGSbecamereal
propertybyvirtueofimmobilization.
B.Whetherornotthecontractbetweenthepartiesisaloanoralease.[12]
Inthemain,theCourtwillresolvewhetherthesaidmachinesarepersonal,not
immovable, property which may be a proper subject of a writ of replevin. As a
preliminarymatter,theCourtwillalsoaddressbrieflytheproceduralpointsraisedby
respondent.
TheCourtsRuling
ThePetitionisnotmeritorious.
PreliminaryMatter:ProceduralQuestions
RespondentcontendsthatthePetitionfailedtoindicateexpresslywhetheritwas
beingfiledunderRule45orRule65oftheRulesofCourt.Itfurtherallegesthatthe
PetitionerroneouslyimpleadedJudgeHilarioLaquiasrespondent.
ThereisnoquestionthatthepresentrecourseisunderRule45.Thisconclusion
finds support in the very title of the Petition, which is Petition for Review on
Certiorari.[13]
While Judge Laqui should not have been impleaded as a respondent,[14]
substantialjusticerequiresthatsuchlapsebyitselfshouldnotwarrantthedismissal
of the present Petition. In this light, the Court deems it proper to remove, motu
proprio,thenameofJudgeLaquifromthecaptionofthepresentcase.
MainIssue:NatureoftheSubjectMachinery
Petitioners contend that the subject machines used in their factory were not
proper subjects of the Writ issued by the RTC, because they were in fact real
property. Serious policy considerations, they argue, militate against a contrary
characterization.
Rule60of the RulesofCourtprovidesthatwritsofreplevinareissuedforthe
recoveryofpersonalpropertyonly.[15]Section3thereofreads:
SEC.3.Order.Uponthefilingofsuchaffidavitandapprovalofthebond,thecourtshall
issueanorderandthecorrespondingwritofreplevindescribingthepersonalproperty
allegedtobewrongfullydetainedandrequiringthesheriffforthwithtotakesuchpropertyinto
hiscustody.
Ontheotherhand,Article415oftheCivilCodeenumeratesimmovableorreal
propertyasfollows:
ART.415.Thefollowingareimmovableproperty:
xxx....................................xxx....................................xxx
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(5)Machinery,receptacles,instrumentsorimplementsintendedbytheownerofthe
tenementforanindustryorworkswhichmaybecarriedoninabuildingoronapieceof
land,andwhichtenddirectlytomeettheneedsofthesaidindustryorworks
xxx....................................xxx....................................xxx
Inthepresentcase,themachinesthatwerethesubjectsoftheWritofSeizure
were placed by petitioners in the factory built on their own land.Indisputably, they
were essential and principal elements of their chocolatemaking industry. Hence,
although each of them was movable or personal property on its own, all of them
have become immobilized by destination because they are essential and principal
elementsintheindustry.[16]Inthatsense,petitionersarecorrectinarguingthatthe
saidmachinesarereal,notpersonal,propertypursuanttoArticle415(5)oftheCivil
Code.[17]
Be that as it may, we disagree with the submission of the petitioners that the
saidmachinesarenotpropersubjectsoftheWritofSeizure.
The Court has held that contracting parties may validly stipulate that a real
propertybeconsidered as personal.[18] After agreeing to such stipulation, they are
consequently estopped from claiming otherwise.Under the principle of estoppel, a
partytoacontractisordinarilyprecludedfromdenyingthetruthofanymaterialfact
foundtherein.
Hence,inTumaladv.Vicencio,[19]theCourtupheldtheintentionofthepartiesto
treat a house as a personal property because it had been made the subject of a
chattelmortgage.TheCourtruled:
xxx.Althoughthereisnospecificstatementreferringtothesubjecthouseaspersonal
property,yetbyceding,sellingortransferringapropertybywayofchattelmortgage
defendantsappellantscouldonlyhavemeanttoconveythehouseaschattel,oratleast,
intendedtotreatthesameassuch,sothattheyshouldnotnowbeallowedtomakean
inconsistentstandbyclaimingotherwise.
ApplyingTumalad,theCourtinMakatiLeasingandFinanceCorp.v.Wearever
Textile Mills[20] also held that the machinery used in a factory and essential to the
industry,asinthepresentcase,wasapropersubjectofawritofreplevinbecauseit
wastreatedaspersonalpropertyinacontract.PertinentportionsoftheCourtsruling
arereproducedhereunder:
xxx.Ifahouseofstrongmaterials,likewhatwasinvolvedintheaboveTumaladcase,may
beconsideredaspersonalpropertyforpurposesofexecutingachattelmortgagethereonas
longasthepartiestothecontractsoagreeandnoinnocentthirdpartywillbeprejudiced
thereby,thereisabsolutelynoreasonwhyamachinery,whichismovableinitsnatureand
becomesimmobilizedonlybydestinationorpurpose,maynotbelikewisetreatedassuch.
Thisisreallybecauseonewhohassoagreedisestoppedfromdenyingtheexistenceofthe
chattelmortgage.
Inthepresentcase,theLeaseAgreementclearlyprovidesthatthemachinesin
questionaretobeconsideredaspersonalproperty.Specifically,Section12.1ofthe
Agreementreadsasfollows:[21]
12.1ThePROPERTYis,andshallatalltimesbeandremain,personalproperty
notwithstandingthatthePROPERTYoranypartthereofmaynowbe,orhereafterbecome,
inanymanneraffixedorattachedtoorembeddedin,orpermanentlyrestingupon,real
propertyoranybuildingthereon,orattachedinanymannertowhatispermanent.
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Clearly then, petitioners are estopped from denying the characterization of the
subject machines as personal property. Under the circumstances, they are proper
subjectsoftheWritofSeizure.
Itshouldbestressed,however,thatourholdingthatthemachinesshouldbe
deemedpersonalpropertypursuanttotheLeaseAgreementisgoodonlyinsofaras
thecontractingpartiesareconcerned.[22]Hence,whilethepartiesareboundbythe
Agreement, third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal.[23] In any event, there is no
showingthatanyspecificthirdpartywouldbeadverselyaffected.
ValidityoftheLeaseAgreement
IntheirMemorandum,petitionerscontendthattheAgreementisaloanandnot
a lease.[24] Submitting documents supposedly showing that they own the subject
machines, petitioners also argue in their Petition that the Agreement suffers from
intrinsicambiguitywhichplacesinseriousdoubttheintentionofthepartiesandthe
validityoftheleaseagreementitself.[25]IntheirReplytorespondentsComment,they
furtherallegethattheAgreementisinvalid.[26]
Theseargumentsareunconvincing.The validity and the nature of the contract
are the lis mota of the civil action pending before the RTC. A resolution of these
questions,therefore,iseffectivelyaresolutionofthemeritsofthecase.Hence,they
shouldbethreshedoutinthetrial,notintheproceedingsinvolvingtheissuanceof
theWritofSeizure.
Indeed, in La Tondea Distillers v. CA,[27] the Court explained that the policy
under Rule 60 was that questions involving title to the subject property questions
whichpetitionersarenow raisingshould be determined in the trial.In that case,
theCourtnotedthattheremedyofdefendantsunderRule60waseithertoposta
counterbond or to question the sufficiency of the plaintiffs bond. They were not
allowed,however,toinvokethetitletothesubjectproperty.TheCourtruled:
Inotherwords,thelawdoesnotallowthedefendanttofileamotiontodissolveordischarge
thewritofseizure(ordelivery)ongroundofinsufficiencyofthecomplaintorofthegrounds
reliedupontherefor,asinproceedingsonpreliminaryattachmentorinjunction,andthereby
putatissuethematterofthetitleorrightofpossessionoverthespecificchattelbeing
replevied,thepolicyapparentlybeingthatsaidmattershouldbeventilatedanddetermined
onlyatthetrialonthemerits.[28]
Besides,thesequestionsrequireadeterminationoffactsandapresentationof
evidence, both of which have no place in a petition for certiorari in the CA under
Rule65orinapetitionforreviewinthisCourtunderRule45.[29]
RelianceontheLeaseAgreement
It should be pointed out that the Court in this case may rely on the Lease
Agreement,fornothingonrecordshowsthatithasbeennullifiedorannulled.Infact,
petitioners assailed it first only in the RTC proceedings, which had ironically been
institutedbyrespondent.Accordingly,itmustbepresumedvalidandbindingasthe
lawbetweentheparties.
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Makati Leasing and Finance Corporation[30] is also instructive on this point. In

thatcase,theDeedofChattelMortgage,whichcharacterizedthesubjectmachinery
as personal property, was also assailed because respondent had allegedly been
requiredtosignaprintedformofchattelmortgagewhichwasinablankformatthe
timeofsigning.TheCourtrejectedtheargumentandreliedontheDeed,rulingas
follows:
xxx.Moreover,evengrantingthatthechargeistrue,suchfactalonedoesnotrendera
contractvoidabinitio,butcanonlybeagroundforrenderingsaidcontractvoidable,or
annullablepursuanttoArticle1390ofthenewCivilCode,byaproperactionincourt.There
isnothingonrecordtoshowthatthemortgagehasbeenannulled.Neitherisitdisclosedthat
stepsweretakentonullifythesame.xxx
AllegedInjusticeCommittedonthePartofPetitioners
PetitionerscontendthatiftheCourtallowsthesemachineriestobeseized,then
itsworkerswouldbeoutofworkandthrownintothestreets.[31]Theyalsoallegethat
theseizurewouldnullifyalleffortstorehabilitatethecorporation.
PetitionersargumentsdonotprecludetheimplementationoftheWrit.Asearlier
discussed,lawandjurisprudencesupportitspropriety.Verily,theabovementioned
consequences, if they come true, should not be blamed on this Court, but on the
petitionersforfailingtoavailthemselvesoftheremedyunderSection5ofRule60,
whichallowsthefilingofacounterbond.Theprovisionstates:
SEC.5.Returnofproperty.Iftheadversepartyobjectstothesufficiencyoftheapplicants
bond,orofthesuretyorsuretiesthereon,hecannotimmediatelyrequirethereturnofthe
property,butifhedoesnotsoobject,hemay,atanytimebeforethedeliveryoftheproperty
totheapplicant,requirethereturnthereof,byfilingwiththecourtwheretheactionispending
abondexecutedtotheapplicant,indoublethevalueofthepropertyasstatedinthe
applicantsaffidavitforthedeliverythereoftotheapplicant,ifsuchdeliverybeadjudged,and
forthepaymentofsuchsumtohimasmayberecoveredagainsttheadverseparty,andby
servingacopybondontheapplicant.
WHEREFORE,thePetitionisDENIEDandtheassailedDecisionoftheCourtof
AppealsAFFIRMED.Costsagainstpetitioners.
SOORDERED.
Melo,(Chairman),Vitug,Purisima,andGonzagaReyes,JJ.,concur.
[1] Rollo,pp.177180.
[2] PennedbyJusticeRomeoA.Brawner(Divisionactingchairman),withtheconcurrenceofJusticesEloyR.BelloJr.

andMartinS.VillaramaJr.
[3] Rollo,p.189.
[4] CADecision,p.3rollo,p.179.
[5] Rollo,p.356.
[6] PresidedbyJudgeHilarioL.Laqui.
[7] Rollo,pp.2324.
[8] Rollo,pp.7879.
[9] MotionforSpecialProtectiveOrder,pp.34rollo,pp.7677.
[10] CADecision,pp.12rollo,pp.177178.
[11] ThecasewasdeemedsubmittedforresolutiononOctober21,1999,uponreceiptbythisCourtofthepetitioners
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MemorandumsignedbyAtty.VictorBasilioN.DeLeonofAntonioR.Bautista&Partners.RespondentsMemorandum,
whichwassignedbyAtty.AmadorF.BriosoJr.ofPerez&CalimaLawOffices,hadbeenfiledearlieronSeptember29,
1999.
[12] PetitionersMemorandum,p.3rollo,p.376.
[13] Section1,Rule45oftheRulesofCourt.
[14] Section4(a)ofRule45providesthatthepetitionshallstatethefullnameoftheparties,withoutimpleadingthe
lowercourtsorjudgesthereofeitheraspetitionersorrespondents.
[15] BAFinancev.CA,258SCRA102,July5,1996FilinvestCreditv.CA,248SCRA549,September27,1995
MachineryEngineeringSupplyv.CA,96Phil.70,October29,1954.
[16] MindanaoBusCo.v.CityAssessorandTreasurer,6SCRA197,September29,1962,perLabrador,J.SeealsoVitug,
CompendiumofCivilLawandJurisprudence,1986ed.,pp.99100.
[17] PeoplesBank&TrustCo.v.DahicanLumber,20SCRA84,May16,1967Burgosv.ChiefofStaff,133SCRA800,
December26,1984DavaoSawmillCo.v.Castillo,61Phil.709,August7,1935.
[18] ChuaPengHianv.CA,133SCRA572,December19,1984StandardOilCo.v.Jaranillo,44Phil.630,March16,
1923Lunav.Encarnacion,91Phil.531,June30,1952Manarangv.Ofilada,99Phil.109,May18,1956PeoplesBank
&TrustCo.v.DahicanLumber,supra.
[19] 41SCRA143,153,September30,1971,perReyes,JBL,J.
[20] 122SCRA296,300,May16,1983,perDeCastro,J.
[21] Rollo,p.262.
[22] Evangelistav.AltoSuretyandInsuranceCo.,103Phil.401,April23,1958Navarrov.Pineda,9SCRA631,
November30,1963.
[23] Vitug,supra,pp.100101.
[24] PetitionersMemorandum,p.8rollo,p.381.
[25] Petition,p.10rollo,p.12.
[26] Reply,p.7rollo,p.301.
[27] 209SCRA553,567,June8,1992,perNarvasa,CJ.
[28] Ibid.
[29] SeeFuentesv.CourtofAppeals,268SCRA703,February26,1997.
[30] Supra,p.301.
[31] Petition,p.16rollo,p.18.

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