RIVERA VS.
VARGAS order allowing the seizure is erroneous and may be set aside on
Facts: Petitioner avers that the writ of replevin was served upon
and signed by the security guard on duty where the rock-
crushing plant to be seized was located contrary to the sheriff’s
return stating that both the writ and the summons was served
upon petitioner. Nine (9) days after the writ was served on the
security guard, petitioner filed an answer to the complaint
accompanied by a prayer for the approval of her redelivery
bond. The RTC, however, denied the redelivery bond for having
been filed beyond the five-day mandatory period prescribed in
Sections 5 and 6 of Rule 60.
Petitioner argues in the case at bar via the petition on Rule 45
that the RTC committed grave abuse of discretion in denying
her counterbond on the ground that it was filed out of time. She
contends that the mandatory five-day period did not even begin
to run in this case due to the improper service of the writ of
replevin, contrary to Section 4 of Rule 60.
Issue: WON the denial of counterbond filed beyond the 5 day
mandatory period is erroneous considering the writ was
improperly served.
Held: Yes.
Before a final judgment, property cannot be seized unless by
virtue of some provision of law. The Rules of Court, under Rule
60, authorizes such seizure in cases of replevin. However, a
person seeking a remedy in an action for replevin must follow
the course laid down in the statute, since the remedy is penal in
nature. When no attempt is made to comply with the provisions
of the law relating to seizure in this kind of action, the writ or
motion by the adverse party.
The process regarding the execution of the writ of replevin in
Section 4 of Rule 60 is unambiguous: the sheriff, upon receipt of
the writ of replevin and prior to the taking of the property, must
serve a copy thereof to the adverse party (petitioner, in this
case) together with the application, the affidavit of merit, and the
replevin bond. The reasons are simple, i.e., to provide proper
notice to the adverse party that his property is being seized in
accordance with the court’s order upon application by the other
party, and ultimately to allow the adverse party to take the
proper remedy consequent thereto.
Service of the writ upon the adverse party is mandatory in line
with the constitutional guaranty on procedural due process and
as safeguard against unreasonable searches and seizures.
In the case at bar since the writ was invalidly served, petitioner
is correct in contending that there is no reckoning point from
which the mandatory five-day period shall commence to run.
The writ must satisfy proper service in order to be valid and
effective: i.e. it should be directed to the officer who is
authorized to serve it; and it should be served upon the person
who not only has the possession or custody of the property
involved but who is also a party or agent of a party to the action.
Consequently, a trial court is deemed to have acted without or in
excess of its jurisdiction with respect to the ancillary action of
replevin if it seizes and detains a personalty on the basis of a
writ that was improperly served, such as what happened in this
case.
Petitioner’s proper remedy should have been to file a motion to
quash the writ of replevin or a motion to vacate the order of
seizure. Nevertheless, petitioner’s filing of an application for a
redelivery bond, while not necessary, did not thereby waive her
right to question the improper service.
The trial for the main action shall continue. Respondent may,
however, file a new application for replevin should he choose to
do so.
ALIM VS. CA
This is a petition for review on certiorari of the February 27,
1990 decision * of the Court of Appeals in CA-G.R. CV No.
10603 entitled "PACIFIC COAST TIMBER PRODUCTS, INC.
vs. LUCIO TAN ALIM", affirming the decision ** of the Regional
Trial Court of Quezon City, Branch LXXXIX in Civil Case No. Q-
24970 which dismissed private respondent's complaint, but
allowed the petitioner to exercise his option to buy the tractor in
question, which decision was later amended in its Order, dated
September 19, 1985, partially granting petitioner's motion for
reconsideration but denying his plea therein to grant damages
for unrealized income in his logging business due to the alleged
irregular and illegal seizure of the said equipment leased to him.
The case arose out of a Lease Contract with Option To Buy,
dated January 5, 1977, which was entered into by and between
respondent PACIFIC COAST TIMBER PRODUCTS, INC., as
lessor, and petitioner LUCIO TAN ALIM, as lessee, for a term of
fifteen months over a unit of tractor at a monthly rental of
P10,000.00 subject to the stipulation, among others, that after
payment of five months, the lessee is given an option to
purchase the equipment at the price of P150,000.00, in which
event the rental paid shall be considered as part payment of the
consideration and that the subject equipment has to remain at
the lessee's jobsite at PARCEL III-R between Dianawan Creek
and Bazal, San Joaquin, Baler (Original Record, p. 7; Exhibit "I"
and Exhibit "A").
However, upon its delivery on January 15, 1977, the tractor was
discovered to be defective. Consequently, petitioner Alim
informed the private respondent's manager at San Luis, Quezon
of such fact in his letter dated January 25, 1977, relaying
likewise the need for the tractor's reconditioning or replacement
with another unit in good running condition and the immediate
repair thereof as may be arranged by him with the Manila Office
(Ibid., p. 96, Exhibit "2"). The Logging Manager of the
respondent corporation, Luis O. Barredo, issued a certification
on June 11, 1977 that a defective tractor was delivered to the
petitioner (Ibid., p. 98, Exhibit "5"). The amount of P5,000.00 for
the repair of the tractor was then paid by the private respondent
to petitioner Alim on January 29, 1977 (Ibid., p. 97, Exhibit "4").
Petitioner Alim expended the amount of P36,130.60 for its repair
and reconditioning, as specifically contained in his letter to
respondent corporation of June 25, 1977 (Ibid., p. 99, Exhibit
"3").
On July 1, 1977, the parties amended the lease contract with
petitioner's obligation to execute a Deed of Chattel Mortgage for
his three motor vehicles in favor of the respondent to guarantee
his undertaking in the amended lease contract (Ibid., pp. 101-
102; Rollo, pp. 12-13). Respondent corporation's counsel, Lino
M. Patajo, formally informed Alim in a letter dated March 16,
1978 that under the amended contract wherein payment of
rentals commenced in August, 1977, the latter failed to pay
rentals for seven months, from September, 1977 to February,
1978 in the amount of P70,000.00, for which reason the contract
of lease as well as the option to buy, are automatically
terminated. The same counsel likewise sent a notice of default
in obligation secured by the Chattel Mortgage (Ibid., Exhibit "C";
p. 11, Exhibit "D"; Original Records, p. 12). However, the
petition for extrajudicial foreclosure thereon was returned by the
sheriff unsatisfied (Ibid., p. 12). Thereafter, a complaint for
recovery of possession with replevin of a unit of tractor (Ibid.,
pp. 13-15-A; Rollo, pp. 15-18), was filed by private respondent
before the then Court of First Instance of Quezon City due to
petitioner's refusal to pay the arrears and to deliver the subject
equipment.
Upon the filing of a bond by Pacific Coast Timber Products, Inc.,
furnished by Pioneer Insurance and Surety Corporation in the
sum of P300,000.00 (Ibid., p. 26), the trial court issued a writ of
replevin for the seizure and delivery of the property in question
on April 13, 1978 (Ibid., p. 36; Rollo, p. 20). On April 16, 1978,
Deputy Sheriff Reynaldo P. Lopez of the then Court of First
Instance of Aurora Sub-province at Baler, Quezon, seized the
tractor from the petitioner and turned it over to the respondent
corporation on April 26, 1978 (Ibid p. 45, Sheriff's Return of
Service).
In his answer (Ibid., pp. 38-43), the petitioner denied having
defaulted in the payment of rentals and claimed to have
sustained damages for unrealized income in his logging
business as a result of the wrongful seizure of the tractor (Rollo,
p. 21).
Both parties having failed to reach an agreement at the pretrial,
the case was tried on the merits.
In the order of the trial court dated December 17, 1980,
respondent corporation's motion to recall or lift the Order of
Seizure and to cancel the replevin bond the same having
already served their purposes, (Ibid., pp. 142-143), which was
opposed by petitioner Alim (Ibid., pp. 144-146), was denied for
lack of merit since the case was still pending in court (Ibid., p.
149).
On the scheduled hearing of July 14, 1981, both parties failed to
attend. Hence, the dismissal of the case (Ibid., p. 158).
However, the order of dismissal was reconsidered upon
explanation of the parties (Ibid., p. 159). The case was finally
resolved in favor of petitioner Alim on July 31, 1985 by the trial
court (RTC, Quezon City), the dispositive portion of which
states:
ACCORDINGLY, judgment is hereby rendered
dismissing the plaintiffs complaint, and allowing the
defendant within fifteen days from and after this judgment
becomes final and executory, to exercise his option
under the Lease Contract with Option to Buy, as
amended, to buy the tractor, in question, by paying to the
plaintiff the balance of P90,000.00 after deducting from
the purchase price of P150,000.00, in rentals, already
paid by him, and ordering the plaintiff to pay to the
defendant the amount of P36,130.60 as reimbursement
for the expenses for repairs made by the defendant on
the tractor which may be offsetted from the remaining
purchase price of P90,000.00 if the defendant exercises
his option to buy, plus reasonable attorney's fees in the
amount of P5,000.00, with costs against the plaintiff.
SO ORDERED. (Rollo, pp. 32-33)
The said decision was, however, partially modified upon motion
for reconsideration of the petitioner, dated August 19, 1985
(Original Record, pp. 259-261), in its Order dated September
19, 1985, in this wise:
ACCORDINGLY, judgment is hereby rendered
dismissing the plaintiff's complaint, and allowing the
defendant, within fifteen (15) days from and after (sic)
this judgment becomes final and executory, to exercise
his option under the Lease Contract with Option To Buy,
as amended, to buy the tractor, in question by paying to
the plaintiff the balance of P80,000.00 after deducting
from the purchase price of P150,000.00, the amount of
 P70,000.00 in rentals, already paid by him, and ordering
the plaintiff to pay to the defendant the amount of
P36,130.60 as reimbursement for the expenses for
repairs made by the defendant on the tractor, which may
be off-setted (sic) from the remaining purchase price of
P80,000.00, if the defendant exercises his option to buy,
plus reasonable attorney's fees in the amount of
P5,000.00, with costs against the plaintiff. (Rollo, pp. 37-
A-38).
Not satisfied with the modified decision, petitioner Alim
appealed, claiming damages because of the wrongful seizure of
the tractor, but the same was affirmed by the Court of Appeals
which denied said petitioner's claim for compensation and
concurred with the following findings of the trial court:
However, since the fifteen (15) month lease period
provided in the contract had already expired ... the
plaintiff may not be judicially compelled to deliver the
tractor to defendant since after the expiration of the lease
period, it is legally entitled to its possession, as the owner
thereof. (Rollo, P. 62)
Petitioner's motion for reconsideration was denied by the Court
of Appeals in its resolution dated April 30, 1990 (Rollo, p. 65).
Hence, this petition.
The issues raised in this case are: (1) whether or not the fifteen
(15) month lease period had commenced from August 1977 and
expired in October 1978; (2) whether or not the petitioner is
entitled to collect/recover damages as prayed for in the
complaint; and (3) whether or not petitioner is entitled to recover
the sum of P300,000.00 from the replevin bond, all of which
may be synthesized in one pivotal issue, the interpretation of the
"Amendment to Contract of Lease" (Exhibit "6", Original
Records, p. 9) in relation to the "Original Lease Contract with
Option to Buy (Exhibit "1". Original Records, p. 7).
Both the trial court and the Court of Appeals are of the view that
there is no amendment as to the duration of the Contract of
Lease; that the contract expired as originally stipulated on April
5, 1978 and that when the tractor was seized by virtue of a writ
of replevin on August 16, 1978, the contract of lease had
expired and the lessee Alim was consequently not entitled to
damages.
A careful review of the records shows that in the original
contract, it was expressly stipulated that the lease shall be for a
period of fifteen (15) months (Exhibit "1". par. 2) and that the
lessee is given an option to purchase the equipment for ONE
HUNDRED FIFTY THOUSAND (P150,000.00) PESOS, after
Alim has completed and religiously paid the 5-month rentals
which shall be considered as part payment of the consideration
(Ibid., par. 4).
On the other hand, there is no provision in the amended
contract as to the period of the lease. Instead, it provides that
"All provisions of the original lease contract not amended by the
foregoing provisions shall remain in full force and effect."
(Exhibit "6", par. 5). The alteration is evidently focused on the
period for the right to exercise the option to buy. Originally, the
period was five (5) months of regular payment but under the
amended contract, the period was changed to fifteen (15)
months, unquestionably including the period from the
commencement of the original contract on January 7, 1977, as
specifically provided in paragraph 4 thereof, which states:
4. The monthly rentals of the equipment which on the
date of the execution of this amendment to the original
lease contract have not been paid shall be considered as
paid obligation of LESSEE to LESSOR, the payment of
which will be the subject of negotiation between LESSOR
and LESSEE.
The letter of Atty. Lino M. Patajo, counsel of respondent
corporation, on which Alim heavily relied in his arguments in his
favor, unmistakably confirms the fact of non-extension of the
lease agreement when he spoke of the commencement of the
payment of the rentals, not on the commencement of the new
period of lease (Exhibit "C", Original Records, p. 11). Inevitably,
the courts cannot go beyond what appears in the documents
submitted by the parties.
Nothing is more settled than the rule that the terms of written
contract are binding on the parties thereto. In the interpretation
of the provisions of a written contract, the courts should follow
the literal meaning of the stipulation. Otherwise, the evident
intention of the parties must prevail (Art. 1370, Civil Code)
(Spouses Roberto E. Fermin and Maylinda Ferraren v. Hon.
Court of Appeals, et al., G.R. 95146, May 6, 1991).
There is therefore no merit in the petitioner's allegation that the
seizure was wrongful for which he must be
compensated.1âwphi1 The ownership or right of possession
over the subject equipment belonged to the Pacific Coast
Timber Products, Inc. at the time it was seized. The seizure of
the equipment was ordered by the trial court for its restoration
by means established in the laws of procedure. Thus, the
requisites for the issuance of the writ of replevin (Sec. 2, Rule
60) have been satisfied.
The writ is a provisional remedy in replevin suits. It is in the
"nature of a possessory action and the applicant who seeks the
immediate possession of the property need not be the holder of
the legal title to the property." It is sufficient that at the time he
applied for a writ of replevin he is found to be "entitled to a
possession thereof as stated in Section 2, Rule 60 of the Rules
of Court. The Appellate Court correctly observed that the trial
court was right in holding that "the plaintiff may not anymore be
judicially compelled to deliver the tractor to the defendant since
after the expiration of the lease period, it is legally entitled to its
possession, as the owner thereof (p 5, RTC decision; Rollo, p.
31)". It is very clear therefore, that Alim is not entitled to any
award of damages based on the foregoing facts and evidence
presented. Neither can he claim moral and exemplary damages.
The records show that the petitioner was not able to adduce any
evidence before the trial court to prove facts upon which the
award for such damages may be predicated. In fact, even in the
petition and memorandum for the petitioner, there was no
discussion of the evidence upon which Alim relies for his claim.
Moral damages have to do with injury personal to the awardee
such a physical sufferings and the like, while exemplary
damages are imposed by way of example or correction for the
public good (Makabili v. Court of Appeals, 157 SCRA 253
[1988]).
Indisputably, moral damages cannot generally be awarded in
the absence of bad faith (De Aparico v. Paraguya, 150 SCRA
279 [1987]). Otherwise stated, moral damages can be awarded
if they are the proximate results of a wrongful act or omission
(Filinvest Credit Corporation v. Mendez, 152 SCRA 593 [1987]),
while exemplary damages are not awarded if the defendant had
not acted in a wanton, oppressive or malevolent manner (Zenith
Insurance Corporation v. Court of Appeals, 185 SCRA 398
[1990]), neither can claim for exemplary damages be granted in
the absence of gross or reckless negligence (De los Santos, et
al. v. Court of Appeals, G.R. 51165, June 21, 1990), which
misfeasance is not true in the case at bar.
A replevin bond is simply intended to indemnify the defendant
against any loss that he may suffer by being compelled to
surrender the possession of the disputed property pending the
trial of the action. He cannot recover on the bond as for a
reconversion when he has failed to have the judgment entered
for the return of the property. Nor is the surety liable for payment
of the judgment for damages rendered against the plaintiff on a
counterclaim or punitive damages for fraudulent or wrongful acts
committed by the plaintiffs and unconnected with the
defendant's deprivation of possession by the plaintiff. Even
where the judgment was that the defendant was entitled to the
property, but no order was made requiring the plaintiff to return
it or assessing damages in default of a return, it was declared
that until judgment was entered that the property should be
restored, there could be no liability on the part of the sureties
Sapugay v. Court of Appeals, 183 SCRA 464 [1990]).
PREMISES CONSIDERED, the instant petition is DISMISSED
and the assailed decision is AFFIRMED.
TWIN ACE HOLDING VS. RUFINA
Facts:
Twin Ace operates in the Philippines as a domestic Corporation under
thename and style of Tanduay Distillers which manufactures
rhum, wines, and liquors.Rufina is engaged in production of native
products such as patis, bagoong,sisi, and other native food seasonings.
These products are aside from being soldlocally were also exported.
However, Rufina uses the bottles of Tanduay productsas containers for
their products without authorization, or consent of Twin Ace.Section 6 of R.
A 623, as amended by R.A 5700 does not prohibit use ofbottles as
containers for sisi, bagoong, patis, and similar native products.
Issue:
Whether or not Rufina is covered within the exemption provided by
sectionof R.A 623, as amended by R.A 5700 being a large scale
producer?
Held:
Yes. The exemption under the law is unqualified as the law did not make
adistinction that it only applies to small scale industries, it did not
qualify that theprotection therein was intended and limited only to such. It
is a basic rule instatutory construction that when the law is clear and free
from any doubt orambiguity, there is no room for construction or
interpretation.
STRONGHOLD INSURANCE COMPANY VS. CA
In a complaint filed against private respondent Jose Orosa,
dated November 13, 1984 and docketed as Civil Case No. 84-
28188 in Branch 3 of the Regional Trial Court of Manila, therein
plaintiff FCP Credit Corporation prayed that a writ of replevin be
issued against private respondent Jose Orosa ordering the
seizure of the motor vehicle covered by a chattel mortgage
executed in favor of said plaintiff. Upon the tiling of an affidavit
of merit[1] and a replevin bond put up by petitioner Stronghold
Insurance Co., Inc. in the amount of P210,000.00,[2] a writ of
replevin was issued by the court a quo.
On March 25, 1988, judgment was rendered by the trial
court[3] with the following dispositive portion:
"WHEREFORE, judgment is rendered for the defendant, and
against the
plaintiff:
1) Dismissing the complaint for lack of merit;
Declaring that the plaintiff was not entitled to
the Writ of Replevin, issued on January 7,
2) 1985, and is now liable to the defendant for
actual damages under the Replevin bond it
filed;
On defendant's counterclaim, ordering the
plaintiff to pay the defendant the sum of
3) P400,000.00 as moral damages; P100,000.00
as exemplary damages, and P50,000.00 as,
and for, attorney's fees;
Ordering the plaintiff to return to the defendant
the subject 1983 Ford Laser Sedan, with
4) Motor or Serial No. SUNKBT 14584, or its
equivalent, in kind or value, in cash as of this
date and to pay the costs."
Copy of the decision was received by private respondent on
April 11,1988 while petitioner received a copy thereof on April
13,1988. On the following day, April 14, 1988, private
respondent Orosa filed a motion for execution of the judgment
pending appeal, alleging that the judgment in the case may be
rendered ineffective because FCP Credit Corporation was
already liquidating its business affairs. He expressed his
willingness to file a bond for such purpose.[4] Petitioner opposed
said motion through a "Motion for Partial Reconsideration of the
Decision and Opposition to the Motion for Execution"[5] filed on
April 26, 1988, on the following grounds, as summarized by the
respondent court, to wit:
"1. The petitioner was adjudged liable in the decision without the
benefit of hearing in violation of Rule 57, Section 20 in relation
to Section 10, Rule 60, Rules of Court;
"2. The petitioner being not a party to the proceedings, judgment
against it could not be rendered without violating the elementary
rules of procedure;
"3. The allegations in private respondent's motion for execution
pending appeal are purely speculative, self-serving conclusions
and without factual basis;
"4. The exact liability of the bondsman is not specified.'"[6]
An application for judgment on the bond was thereafter filed by
private respondent Orosa on April 26, 1988, adopting by
reference his motion for execution of judgment pending appeal
and the findings of the trial court,[7] An opposition thereto was
filed by petitioner on the contentions that the appeal had been
perfected hence the trial court had already lost jurisdiction to
hear therein defendant's motion; that the application for
damages does not set forth the facts showing his right thereto
and the amount thereof; and that the motion is fatally defective
for lack of the requisite three (3) days notice.[8]
The hearing on the application was scheduled on April 29, 1988,
but the herein private respondent Orosa and his counsel failed
to appear therein. Consequently, petitioner's counsel orally
moved for the denial of said application for judgment on the
bond, but the court below denied said motion and declared all
incidents submitted for resolution.[9] In the meantime, action on
therein plaintiff's notice of appeal and motion to elevate the
records to the Court of Appeals, which were earlier filed on April
14, 1988, was held in abeyance by the court.[10]
In a special order dated June 3, 1988, the trial court ordered the
issuance of a writ of execution pending appeal upon respondent
Orosa's filing of a bond in the amount of P500,000.00.
The special reasons cited by the court for said immediate
execution are (1) "defendant's willingness to file a required bond
to answer for damages in the case of reversal of the judgment"
and (2) "the plaintiff is in imminent danger of insolvency or
dissolution."[11] The motion for partial reconsideration of the
decision and opposition to the motion for execution filed on April
26, 1988 by petitioner was likewise denied for lack of merit in
another order on the same date.[12]
Respondent Orosa's right to recover damages on the replevin
bond and the liability of herein petitioner for said damages and
for all the sums of money recovered in the case in the lower
court by therein defendant against the plaintiff, jointly and
severally with the plaintiff to the extent of the value of the bond,
was held to be unquestionable in an order of the court a
quo dated June 6, 1988.[13]
The following day, June 7, 1988, the trial court issued what was
designated as a "supplemental decision," which reads:
"Pursuant to the order of June 6, 1988 and Sec. 10, Rule 60 of
the Rules of Court, and by way of supplement to the decision,
dated March 25, 1988, judgment is hereby rendered, for the
defendant, ordering the Surety, Stronghold Insurance Co., Inc.,
jointly and severally with the plaintiff, to return to the defendant,
the 1983 Ford Laser 1.5 Sedan involved, or its equivalent in
kind or in cash, as of the date of the said decision (March 25,
1988), to pay him the damages specified in the said decision, to
the extent of the value of the replevin bond which is
P210,000.00, with costs against the said Surety."[14]
Respondent Deputy Sheriff Jaime Del Rosario, by virtue of the
order of execution pending appeal, levied upon the properties of
petitioner and garnished its funds with Far East Bank and
United Coconut Planters Bank on June 17, 1988.
A few days thereafter, on June 22, 1988, petitioner filed a
petition for certiorari, with a prayer for preliminary injunction
and/or restraining order, in respondent court where it was
docketed as CA-G.R. SP No. 14938. Petitioner sought therein
the annulment of the orders of the trial court dated June 3 and
6, 1988, the supplemental decision of June 7, 1988 and the writ
of execution issued in Civil Case No. 84-28188.
Significantly, even after the filing of the petition for certiorari with
the appellate court, the trial court acted on several motions filed
either before or after said petition was instituted. On the same
day of the filing of said petition, an order was issued by the trial
court supplementing its order of execution pending appeal dated
June 3, 1988 by ordering private respondent Orosa to file an
additional bond in the amount of P200,000.00.15
An "Urgent Omnibus Motion for Reconsideration with Prayer for
Restraining Order," dated June 24, 1988, was filed by the
petitioner with the trial court, alleging that "there exists no good
and valid reasons to justify execution pending appeal against
SICI considering that it is very solvent and any final judgment
against it would surely be satisfied."[16] The motion was denied
for lack of merit on June 27, 1988.
Likewise, the trial court denied on July 6, 1988 the motion of
therein plaintiff, dated June 20, 1988, for the reconsideration of
the special order of the court issued on June 3, 1988.[17]
On July 11, 3988, upon an ex parte motion, the trial court
directed the enforcement of the writ of execution pending appeal
against therein plaintiff FCP Credit Corporation alone. [18]Later,
on August 5, 1988, another order was issued this time directing
its enforcement against petitioner.[19] Petitioner moved for the
reconsideration of said order and in the hearing of said motion,
its counsel adduced additional arguments in support thereof.
The court was informed that its application for a writ of injunction
was already submitted for resolution by the Court of Appeals.[20]
Eventually, the application for a writ of injunction referred to by
petitioner was granted by the Court of Appeals on August 26,
1988. Nevertheless, the same writ was lifted and set aside when
the petition for certiorari was dismissed in a decision
promulgated by respondent court on September 9, 1988 in CA-
G.R. SP No. 14938.[21] No grave abuse of discretion was found
to have been committed by the trial court in issuing the
questioned orders.
Hence, this petition to set aside and annul the aforesaid
decision of respondent court.
The rule is clear that where the judgment in an action is in favor
of the party against whom the writ of replevin was issued, he
may recover damages resulting therefrom and the replevin bond
required under Section 2, Rule 60 of the Rules of Court may be
held to answer for this purpose. The procedure to hold the
surety liable upon the replevin bond is provided for under
Section 10 of the same rule in relation to Section 20 of Rule 57.
Compliance with the following requisites is essential:
"x x x (1) the filing of an application therefor with the Court
having jurisdiction of the action; (2) the presentation thereof
before the judgment becomes executory (or before the trial or
before appeal is perfected); (3) the statement in said application
of the facts showing the applicant's right to damages and the
amount thereof; (4) the giving of due notice of the application to
the attaching creditor and his surety or sureties; and (5) the
holding of a proper hearing at which the attaching creditor and
sureties may be heard on the application. These requisites
apply not only in cases of seizure or delivery under Rule 60, but
also in cases of preliminary injunctions under Rule 58, and
receiverships under Rule 59."[22]
To avoid multiplicity of suits, all incidents arising from the same
controversy must be settled in the same court having jurisdiction
of the main action. Thus, the application for damages must be
filed in the court which took cognizance of the case, with due
notice to the other parties.
The timeliness of the application for judgment on the bond in
this case, as well as the motion for immediate execution, is
apparent because it was filed before the appeal was perfected.
The fact that one of the parties had filed a notice of appeal does
not perfect such appeal. An appeal is perfected upon the lapse
of the last day for all parties to appeal.[23]
It should also be noted that the filing of the application for
judgment on the bond by private respondent Orosa was in the
nature of a motion for reconsideration under Section 1 (c), Rule
37 of the Rules of Court, which consequently had the effect of
interrupting the period to appeal,[24] This being so, the order
holding in abeyance plaintiffs notice of appeal was not even
necessary and was an apparent superfluity.
Petitioner nevertheless claims that there was failure to hold a
proper hearing. Such requirement, however, has been held to
mean that "the hearing will be summary and will be limited to
such new defenses, not previously set up by the principal, as
the surety may allege and offer to prove. The oral proof of
damages already adduced by the claimant may be reproduced
without the necessity of retaking the testimony, but the surety
should be given an opportunity to cross-examine the witness or
witnesses if he so desires."[25] In the present case, as
respondent court correctly pointed out, petitioner did not allege
and offer to prove any new defense not previously set up by the
principal. Furthermore, the grounds relied upon in its opposition
to the application requires no hearing for their proper
consideration by the court a quo, aside from the fact that the
trial court adequately and particularly resolved them in its order
of June 6, 1988.
If petitioner really had additional defenses, it should have asked
for the opportunity to present the same when the motion to
dismiss the application for judgment on the bond was denied.
This is also true with respect to the cross-examination of the
witnesses which petitioner is now belatedly asking for. While
there was no one to cross-examine during the hearing of the
application for judgment on the bond because of private
respondent's absence, petitioner could have invoked and
insisted on such right. Further, even if private respondent had
appeared during the hearing, it could reasonably be expected
that no witnesses would be presented since the application for
judgment on the bond relied mainly on the same grounds that
were already presented in court and were subject of the trial on
the merits, or were at least already of record. To repeat, had
petitioner been sincere in the stance that it now takes to create
an issue, it should have demanded its right to cross-examine
such witnesses as it was minded to. As it turned out, the
opportunity to so demand was present but petitioner did not
care to do so. Instead, it preferred to stick to its stand that the
application should be denied for failure of respondent Orosa to
appear during the hearing. The petitioner should, therefore,
suffer the consequences of its inexplicable inaction and
conscious omission.
Independent of the foregoing considerations, neither does the
petitioner have the right to question the "supplemental
judgment" of the trial court. As already stated, the application for
judgment on the bond was in the nature of a motion for
reconsideration, hence the resolution thereof constitutes a final
and appealable order. Appeal being the proper and then
available remedy, the original action for certiorari does not lie
and cannot substitute for the remedy of appeal that was
thereafter lost.
We cannot, however, sanction the execution pending appeal
which was authorized in this case. The order for advance
execution must be struck down for lack of the requisite good
reasons therefor. It is already settled that the mere filing of a
bond does not warrant execution pending appeal. To consider
the mere filing of a bond a good reason would precisely make
immediate execution of ajudgment pending appeal routinary, the
rule rather than the exception.[26]
The alleged imminent danger of insolvency of plaintiff FCP
Credit Corporation does not also constitute a good reason for
immediate execution. In the aforecited Philippine National Bank
case, we ruled that where there are two or more parties who are
held to be solidarily or subsidiarily liable for the judgment
account, the insolvency of one will not justify immediate
execution where the others are capable of paying the obligation.
The obligation of petitioner surety company and the plaintiff
corporation in the case at bar is in solidum. Their agreement
states that the principal and the surety therein jointly and
severally bound themselves "in the sum of TWO HUNDRED
TEN THOUSAND PESOS ONLY (P210,000.00) Philippine
Currency, for the prosecution of the action, for the return of the
property to defendant, if the return thereof be adjudged, and for
the payment x x x of such sum as may in the cause be
recovered against the plaintiff, and costs of the action."[27]
IN VIEW OF THE FOREGOING, the order of the trial court,
dated June 3, 1988, ordering the issuance of a writ of execution
pending appeal, as well as the other orders for its
implementation, are hereby ANNULLED and SET ASIDE. In all
other respects, the decision of respondent Court of Appeals
is AFFIRMED.
ASIAN TERMINALS INC. VS. BAUTISTA
Before us is a Petition for Review on Certiorari for the reversal
of the Decision[1] of the Court of Appeals (CA) in CA-G.R. SP
No. 61562, affirming the Orders[2] of the Regional Trial Court
(RTC) of Parañaque City, Branch 260, in Civil Case No. 98-
0435 for replevin and damages.
Section 1, Republic Act (RA) No. 8506, which took effect on
February 22, 1998, provides that "it shall be unlawful for any
person to import, cause the importation of, register, cause the
registration of, use or operate any vehicle with its steering wheel
right hand side thereof in any highway, street or road, whether
private or public, or at the national or local x x x."
Noel Tabuelog, Ernesto de Jesus, Norma Pondevida, Renato
Claros, Ernesto M. Chua, Cecilia T. Saulog, Jenelita S.
Napárate, Rodolfo F. Mago, and Amalia C. Edamura are duly-
licensed importers of vehicles. Sometime in April and May 1998,
they imported 72 secondhand right-hand drive buses from
Japan. When the shipment arrived at the South Harbor, Port of
Manila, the District Collector of Customs impounded the
vehicles and ordered them stored at the warehouse of the Asian
Terminals, Inc. (ATI), a customs-bonded warehouse under the
custody of the Aviation and Cargo Regional Division.
Conformably with Section 2607 of the Tariff and Customs Code,
the District Collector of Customs issued Warrants of
Distraint[3] against the shipment and set the sale at public
auction on September 10, 1998.[4]
In the meantime, on October 28, 1998, the Secretary of Justice
rendered Opinion No. 127,[5] Series of 1998, stating that
shipments of right hand wheel vehicles loaded and exported at
the port of origin before February 22, 1998 were not covered by
RA No. 8506 unless the same were loaded and imported after
said date.
On November 11, 1998, the importers, through their Attorney-in-
Fact Samuel N. Rosete, filed a complaint with the RTC of
Parañaque City, against the Secretary of Finance, Customs
Commissioner, and the Chief Executive of the Societe Generale
de Surillee, for replevin with prayer for the issuance of a writ of
preliminary and mandatory injunction and damages.
Plaintiffs averred, inter alia, that in accordance with the opinion
of the Assistant Director of the Customs Legal Service and the
Office of the Legal Affairs of the Department of Finance, the
importation of right-hand drive vehicles are not prohibited under
RA No. 8506 provided that conversion kits are included in the
imported vehicles. As such, there was no factual and legal basis
for the seizure of the shipment and the storage thereof at the
ATI. The complaint contained the following prayer:
WHEREFORE, premises considered, it is most respectfully
prayed before this Honorable Court that an Order be issued in
the following tenor:
 A. PRIOR TO HEARING:
1. A Writ of Replevin be issued upon the posting of a
bond of PhP12,000,000.00 (double the value of
the vehicles) executed in favor of defendants to
answer for damages, and approved by this Court,
directing the Sheriff or his deputies to forthwith
take custody of the said vehicles which are in the
possession and custody of the defendants or their
agents at the Bureau of Customs Holding Area,
located at South Harbor, Port Area, Manila City,
and retain it in its custody;
B. AFTER HEARING:
However, George Jeroes, the Chief of Customs Police and four
(4) customs policemen prevented the Sheriff and the policemen
assisting him from taking custody of the vehicles.[8] He claimed
that the District Collector of Customs had jurisdiction over the
vehicles. On motion of the plaintiffs, the court issued an
Order[9] on November 23, 1998, directing the PNP Director to
assist the Sheriff in implementing the writ it issued and to arrest
anyone who would obstruct the implementation of its order. The
Sheriff served a copy of the Order on ATI and succeeded in
taking custody of the vehicles and signed a receipt
therefor.[10] The District Collector of Customs agreed to transfer
the custody of the vehicles to the RTC, on the condition that the
required taxes, dues, and other charges be paid. The Customs
Commissioner approved the decision of the District
Collector.[11] Plaintiffs paid the requisite taxes, dues, and other
charges amounting to P7,528,635.00. They were able to take
possession of the vehicles over the objections of ATI.[12]

On November 27, 1998, the defendants, through the Office of

1. To pay the sum of PhP6,000,000.00 if the Writ of the Solicitor General, filed an Omnibus Motion[13], seeking the
Replevin cannot be implemented successfully plus reconsideration of the RTC Order granting plaintiffs' plea for a
interest until fully paid; writ of replevin. It likewise prayed that the writ of replevin issued
by the court be quashed on the ground that the RTC has no
2. To pay compensatory damages of not less than jurisdiction over the vehicles subject of seizure and detention
PhP840,000.00 for unrealized profits, moral before the Bureau of Customs. The OSG declared that the
damages of not less [than] PhP1,000,000.00, Bureau of Customs which had custody of the vehicles through
exemplary damages of not less than ATI "had exclusive jurisdiction over said vehicles and on the
PhP250,000.00, litigation and necessary expenses issues of the seizure and detention thereof." The ATI filed a
of not less than PhP500,000.00, attorney's fees on motion for the court to allow the vehicles to remain in its
a contingent basis, not less than P1,000,000.00 warehouse.[14]
actual damages if and when plaintiffs are legally
obliged to pay storage fees; On December 1, 1998, the ATI filed a Third-Party Claim[15] over
the shipment, alleging that it had a lien over the vehicles for
3. Such other reliefs just and equitable under the accumulated and unpaid storage and arrastre charges, and
premises.[6] wharfage dues amounting to P13,036,480.94. It prayed that the
vehicles be returned and remain with it until payment of said
The RTC granted the application for a writ of replevin on a bond dues. On December 9, 1998, ATI filed a Motion[16] seeking to
of P12,000,000.00.[7] require plaintiffs (third-party defendants) to post a bond to insure
payment of its claims against the plaintiffs, or to order the Sheriff
to return possession of the vehicles to it.
Plaintiffs opposed the Third-Party Claim of ATI claiming that it
failed to allege in its Affidavit of Third-Party Claim any factual
and legal basis for its alleged lien and to present documentary
evidence to prove the same. ATI has no cause of action against
them for wharfage/arrastre services because there was no
contract to cover said charges.[17]
Before the court could resolve the motions, plaintiffs filed a
"Motion/Notice to Dismiss/Withdraw Complaint"[18] against the
officials of the Bureau of Customs and Department of Finance,
on the ground that said defendants had agreed to the
implementation of the writ of replevin issued by the court on
condition that plaintiffs pay the taxes, dues, and other charges
on the importation amounting to P7,528,635.00 to the
government and that plaintiffs had paid the said amount. The
OSG opposed the motion, alleging that:
The instant Complaint states that the subject importation is
legal. This is a matter which cannot be admitted by defendants
simply because the law and the Opinion of the Secretary of
Justice are crystal clear. Likewise, all the erroneous statements
of law and legal conclusions stated therein cannot be
hypothetically admitted.
3. Hence, it is imperative that the Omnibus Motion be resolved
first prior to any other incident for the same delves on the very
merits of the instant case.
4. The release of the imported right-hand drive buses by the
Bureau of Customs cannot make the said importation legal;
otherwise, said act will constitute a violation of R.A. No. 8506
which declares illegal the act of importation of this type of
vehicle.
5. The Bureau of Customs was constrained to release the
subject vehicles on November 27, 1998 because of this Court's
Order dated November 23, 1998, the last paragraph of which
states:
"Chief of PNP General Roberto Lastimoso is ordered to assist
the Sheriff in the implementation of its order dated November
11, 1998 and to effect the arrest of persons who would obstruct
the implementation of this court's order."
The overwhelming number of PNP personnel who accompanied
the sheriff (there were at least 20 police cars which swarmed
over the area), pitied against only three (3) hapless Customs
policemen, plus the threat to arrest anyone who would obstruct
the implementation of the Order dated November 11, 1998
granting the application for a Writ of Replevin, left the Bureau of
Customs with no choice but to allow the release of the subject
vehicles.[19]
On January 13, 1999, ATI filed a Motion for Intervention and for
Admission of its Complaint-in-Intervention, alleging that it had a
lien on the vehicles to the extent of P13,820,150.93,
representing accumulated storage and arrastre charges and
wharfage dues. ATI prayed that its Complaint-in-Intervention be
admitted, and that after due proceedings judgment be rendered
in its favor, thus:
WHEREFORE, it is respectfully prayed of this Honorable Court
that judgment be rendered in this Complaint-in-Intervention
ordering plaintiffs to pay intervenor:
a) the sum of PESOS THIRTEEN MILLION EIGHT HUNDRED
TWENTY THOUSAND ONE HUNDRED FIFTY AND 93/100
(P13,820,150.93), plus legal interest from the date of the filing of
this Complaint-in-Intervention.
b) the sum of PESOS ONE HUNDRED THOUSAND
(P100,000.00) as and for attorney's fees; and
c) costs of suit.[20]
Plaintiffs opposed the motion of ATI on the following grounds:
(1) ATI failed to allege and present any contract covering the
deposit/storage of the vehicles in its warehouse; (2) ATI has no
legal interest over the matter in litigation; and (3) the
adjudication of the rights of the parties may be delayed or
prejudiced while those of ATI may be protected in a separate
proceeding.[21]

The OSG opposed the motion of the plaintiffs and the notice to
dismiss/withdraw the complaint, praying that the court resolve
its pending motions.[22]
On April 27, 1999, the court issued an Order dismissing the
complaint on the following grounds:
1. Plaintiffs themselves filed a Motion to Dismiss
against Secretary of Finance and Commissioner of
Customs.
2.
3. This Court has no jurisdiction over the case. "The Court
of Tax Appeals exercises exclusive appellate
jurisdiction to review the ruling of the Commissioner in
seizure and confiscation cases and that power is to the
exclusion of the Court of First Instance which may not
interfere with the Commissioner's decisions x x x"
In view of the foregoing, let this case be as it is hereby ordered
Dismissed.
SO ORDERED.[23]
The OSG filed a motion for reconsideration of the April 27, 1999
Order, and prayed that the court resolve the issue as to who is
entitled to the possession of the vehicles as required by
Sections 9 and 10, Rule 60 of the Rules of Court. For its part,
ATI filed a motion for clarification of the order, alleging that the
court failed to resolve its motion. It also pleaded for the court to
admit its Complaint-in-Intervention and its motion seeking to
require plaintiffs to post a bond to insure payment of its claims
for wharfage/arrastre charges.[24]
On September 23, 1999, the RTC issued its Order dismissing
the Complaint-in-Intervention, thus:
Before this Court are the following Motions:
1. Motion for Clarification, and
2. Motion for Reconsideration
The Complaint-in-Intervention of Intervenor - ATI is likewise
dismissed, it being only an accessory to the principal case.
Plaintiff Samuel Rosete is hereby ordered to return the
possession of the subject buses to Pedro Mendoza, in his
capacity as Customs Commissioner of the Bureau of Customs.
SO ORDERED.[25]
ATI filed a motion for reconsideration, which the court denied on
July 31, 2000. While it recognized the arguments of ATI, the
court held that its rights could be fully protected in a separate
proceeding. It declared that the subject buses were
under custodia legis by virtue of the writ of replevin it had
issued. However, due to the dismissal of the plaintiffs'
complaint, the subject buses have to be returned to the person
who was in custody prior to the implementation of the writ. The
motion for reconsideration filed by ATI and the opposition filed
by plaintiffs were likewise denied.[26]
ATI filed a Petition for Certiorari under Rule 65 before the CA,
assailing the RTC Orders dated April 27, 1999, September 23,
1999, and July 31, 2000. It raised the following questions:
WHETHER OR NOT THE LOWER COURT COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT OUTRIGHTLY
DISMISSED THE SUBJECT COMPLAINT FILED BY PRIVATE
RESPONDENTS.
WHETHER OR NOT THE LOWER COURT COMMITTED
GRAVE ABUSE OF DISCRETION WHEN IT DENIED THE
MOTION FOR RECONSIDERATION FILED BY THE
PETITIONER.
WHETHER OR NOT THE PUBLIC RESPONDENTS
COMMITTED GRAVE ABUSE OF DISCRETION WHEN IT
OUTRIGHTLY DISMISSED THE COMPLAINT-IN-
INTERVENTION FILED BY PETITIONER.[27]
ATI averred that it filed its Complaint-in-Intervention before the
RTC dismissing the complaint of private respondents. It pointed
out that the dismissal of the main case does not necessarily
result in the dismissal of its ancillary action because it has a
legal interest in the matter in litigation, that is, it is so situated as
to be adversely affected by the distribution or other disposition
of the property in question. It thus behooved the court to have
ordered respondents to post a bond following its third-party
claim over the property for the collection of the wharfage and
arrastre fees/charges.
On November 30, 2004, the CA rendered judgment dismissing
the petition for lack of merit.[28] The appellate court ruled that the
RTC had no jurisdiction over the complaint filed by respondents.
Under the Customs and Tarriff Code, the Collector of Customs
sitting in seizure and forfeiture proceedings had the exclusive
jurisdiction to hear and determine all questions relating on the
seizure and forfeiture of dutiable goods. The RTC had no
review powers over such proceedings; it is the Court of Tax
Appeals under RA No. 1125. Since the RTC had no jurisdiction
over the main case, it was also bereft of authority to hear the
third-party claim or the complaint-in-intervention filed by ATI.
Citing Saw v. Court of Appeals,[29] the appellate court ruled that
intervention was not an independent proceeding but merely an
ancillary and supplemental one, which, in the nature of things, is
subordinate to the main proceeding unless otherwise provided
for by statute or by the Rules of Court. The general rule is that
an intervention is limited to the field of litigation open to the
original parties. The RTC had dismissed the main action; thus,
there was no more principal proceeding in which petitioner ATI
may intervene.
ATI filed a motion for reconsideration, which the CA denied
through its January 28, 2005 Resolution.[30]In the present
petition, ATI (now petitioner) raises the following issues:
1. THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN DISMISSING THE THIRD-
PARTY CLAIM WHICH WAS CONVERTED INTO A
COMPLAINT-IN-INTERVENTION BASED ON THE
GROUND THAT IT IS ANCILLARY TO THE DISMISSED
MAIN ACTION.
2.
3. THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN DISMISSING THE THIRD-
PARTY CLAIM WHICH WAS CONVERTED INTO A
COMPLAINT-IN-INTERVENTION BASED ON THE
GROUND THAT THE COURT A QUO HAS NO
JURISDICTION OVER THE PRINCIPAL ACTION.
4.
5. THE COURT OF APPEALS COMMITTED SERIOUS
REVERSIBLE ERROR IN DISMISSING THE
COMPLAINT IN INTERVENTION ON THE BASIS OF
THE RULING IN BARANGAY MATICTIC VS. ELBINIAS
(148 SCRA 83).[31]
Citing Metropolitan Bank and Trust Company v. The Presiding
Judge, RTC, Manila Branch 39,[32] petitioner maintains that the
dismissal of the original complaint filed by respondents cannot,
in any way, result in the denial of its complaint-in-intervention. It
posits that its consent as intervenor is necessary for the
dismissal of the main action, and that the original parties cannot
"isolate" it and agree, among themselves, to dismiss the
complaint. Petitioner asserts that, even if the original complaint
was properly dismissed, its complaint-in-intervention survives
the original complaint and may proceed as long as the existence
of an actual controversy had been established by the pleadings.
It insists that the intervention has to be heard regardless of the
disposition of the principal action.
Petitioner submits that even on the assumption that the lower
court has no jurisdiction over the principal action, the third-party
complaint may still be maintained.
Petitioner further contends that the appellate court erred in
relying on Barangay Matictic v. Elbinias[33] because in that case,
the third-party-complaint was filed after the decision in the main
case had already become final, whereas, in the present case,
the third-party claim and third-party complaint before the RTC
dismissed respondents' action. Petitioner maintains that
the Metropolitan case is thus applicable, and points out that the
Court therein ruled that the complaint-in-intervention should be
preserved regardless of the outcome of the original complaint.
For their part, respondents assert that the CA decision is in
accord with the Rules of Court.
We are thus tasked to resolve the issue of whether the CA erred
in dismissing the petition for certiorari of the petitioner.
The petition is denied for lack of merit.
We rule that the trial court acted in accordance with the Tariff
and Customs Code (TCC) and the rulings of this Court when it
issued the assailed Orders.
Section 602 of the TCC provides that the Bureau of Customs
shall exercise exclusive jurisdiction over seized and forfeited
cars. It is tasked to enforce tariff, and supervise and control
customs law and all other laws, rules and regulations relating to
the tariff and customs administration; and to supervise and
control all import and export cargoes, loaded or stored in piers,
terminal facilities, including container yards and freight stations,
for the protection of government revenues. Under Section 2301
of the TCC, the Collector of Customs is empowered to make a
seizure of cargoes and issue a receipt for the detention thereof:
SEC. 2301. Warrant for Detention of Property-Cash Bond. -
Upon making any seizure, the Collector shall issue a warrant for
the detention of the property; and if the owner or importer
desires to secure the release of the property for legitimate
use, the Collector shall, with the approval of the
Commissioner of Customs, surrender it upon the filing of a
cash bond, in an amount to be fixed by him, conditioned upon
the payment of the appraised value of the article and/or any
fine, expenses and costs which may be adjudged in the case:
Provided, That such importation shall not be released under any
bond when there is a prima facie evidence of fraud in the
importation of the article: Provided further, That articles the
importation of which is prohibited by law shall not be released
under any circumstance whomsoever, Provided, finally, That
nothing in this section shall be construed as relieving the owner
or importer from any criminal liability which may arise from any
violation of law committed in connection with the importation of
the article. (emphasis supplied)
Section 2530 of the TCC enumerates the properties subject of
seizure and forfeiture:
Section 2530. Property Subject of Forfeiture Under Tariff and
Customs Laws.- Any vehicle, vessel or aircraft, cargo, article
and objects shall, under the following conditions be subject to
forfeiture:
x x x x
(f) Any article the importation or exportation of which is effected
or attempted contrary to law, or any article of prohibited
importation or exportation, and all other articles which, in the
opinion of the Collector, have been used, are or were entered to
be used as instruments in the importation or exportation of the
former.
As the Court ruled in Jao v. Court of Appeals,[34] Regional Trial
Courts are devoid of any competence to pass upon the validity
or regularity of seizure and forfeiture proceedings conducted by
the Bureau of Customs and to enjoin or otherwise interfere with
these proceedings. It is the Collector of Customs, sitting in
seizure and forfeiture proceedings, who has exclusive
jurisdiction to hear and determine all questions touching on the
seizure and forfeiture of dutiable goods. The Regional Trial
Courts are precluded from assuming cognizance over such
matters even through petitions of certiorari, prohibition or
mandamus. The Court further explained:
It is likewise well-settled that the provisions of the Tariff and
Customs Code and that of Republic Act No. 1125, as amended,
otherwise known as "An Act Creating the Court of Tax Appeals,"
specify the proper fora and procedure for the ventilation of any
legal objections or issues raised concerning these
proceedings. Thus, actions of the Collector of Customs are
appealable to the Commissioner of Customs, whose decision, in taxes, duties and charges, he did not thereby lose jurisdiction
turn, is subject to the exclusive appellate jurisdiction of the Court over the vehicles; neither did it vest jurisdiction on the RTC to
of Tax Appeals and from there to the Court of Appeals. take cognizance of and assume jurisdiction over the petition for
replevin. As very well explained by the Office of the Solicitor
The rule that Regional Trial Courts have no review powers over
such proceedings is anchored upon the policy of placing no General, the District Collector of Customs agreed to transfer the
unnecessary hindrance on the government's drive, not only to vehicles to the custody of the RTC since the latter had ordered
prevent smuggling and other frauds upon Customs, but more the arrest of those who would obstruct the implementation of the
importantly, to render effective and efficient the collection of writ. The District Collector of Customs had yet to resolve
import and export duties due the State, which enables the whether to order the vehicles forfeited in favor of the
government to carry out the functions it has been instituted to government, in light of the opinion of the Secretary of Justice
perform.[35]
that, under RA No. 8506, the importation was illegal.
Thus, the RTC had no jurisdiction to take cognizance of the
petition for replevin by respondents herein, issue the writ of
The RTC cannot be faulted for dismissing petitioner's complaint-
replevin and order its enforcement. The Collector of Customs
in-intervention. Considering that it had no jurisdiction over
had already seized the vehicles and set the sale thereof at
respondents' action and over the shipment subject of the
public auction. The RTC should have dismissed the petition for
complaint, all proceedings before it would be void.[38] The RTC
replevin at the outset. By granting the plea of respondents
had no jurisdiction to take cognizance of the complaint-in-
(plaintiffs below) for the seizure of the vehicles and the transfer
intervention and act thereon except to dismiss the same.
of custody to the court, the RTC acted without jurisdiction over
Moreover, considering that intervention is merely ancillary and
the action and the vehicles subject matter thereof. It bears
supplemental to the existing litigation and never an independent
stressing that the forfeiture of seized goods in the Bureau of
action,[39] the dismissal of the principal action necessarily results
Customs is a proceeding against the goods and not against the
in the dismissal of the complaint-in-intervention. Likewise, a
owner. It is in the nature of a proceeding in rem, i.e., directed
court which has no jurisdiction over the principal action has no
against the res or imported articles and entails a determination
jurisdiction over a complaint-in-
of the legality of their importation. In this proceeding, it is, in
intervention. Intervention presupposes the pendency of a suit in
legal contemplation, the property itself which commits the
a court of competent jurisdiction.[40] Jurisdiction of intervention is
violation and is treated as the offender, without reference
governed by jurisdiction of the main action.[41]
whatsoever to the character or conduct of the owner.[36]

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED.

In fine, the initial orders of the RTC granting the issuance of the
The Court of Appeals Decision in CA-G.R. SP No. 61562
writ of replevin and its implementation are void. [37] While it is
is AFFIRMED.
true that the District Collector of Customs allowed the release of
the vehicles and the transfer thereof to the custody of the RTC
upon the payment by the private respondents of the required
BA Finance Corporation v. Hon. Court of Appeals and
Roberto M. Reyes (CASE DIGEST)
FACTS:
Spouses Manahan executed a promissory note binding
themselves to pay Carmasters, Inc., P83,080.00 in 36 monthly
installments. To secure payment, the Manahan spouses
executed a deed of chattel mortgage over a motor vehicle, a
Ford Cortina. Carmasters later assigned 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 installments, petitioner sent demand letters. The
demands not having been heeded, petitioner 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. The lower court issued a writ of
replevin.
The service of summons upon the spouses Manahan was
caused to be served by petitioner. The original of the summons
had the name and the signature of private respondent Roberto
M. Reyes indicating that he received a copy of the summons
and the complaint. Petitioner, through its Legal Assistant, issued
a certification to the effect that it had received from Orson R.
Santiago, the deputy sheriff of the RTC the Ford Cortina seized
from private respondent Roberto M. Reyes, the John Doe
referred to in the complaint, in Sorsogon, Sorsogon.
Consequently, the lower court came out with an order of
seizure.
A few months later, the court issued an order dismissing the
caste 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.
The order was recalled, but summons still could not be served
on the Manahans. So, the trial court dismissed the case and
ordered that the vehicle be returned to Reyes. The CA affirmed.
On appeal, the CA denied petitioner’s motion for
reconsideration. Hence this petition.
ISSUE:
Whether or not 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.
RULING:
No. Replevin 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. The action
is primarily possessory in nature and generally determines
nothing more than the right of possession. 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. 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. The
court, in an earlier case held 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.

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.