ENRIQUEZ v. THE MERCANTILE INSURANCE CO., INC. G.R. No.

210950, August 15,

2018 DOCTRINE:
A surety bond remains effective until the action or proceeding is finally decided,
resolved, or terminated, regardless of whether the applicant fails to renew the bond.
The applicant will be liable to the surety for any payment the surety makes on the
bond, but only up to the amount of this bond.
FACTS:
Enriquez filed a Complaint for Replevin against Asuten before the RTC of Angeles City,
Pampanga for the recovery of her Toyota Hi-Ace van. Enriquez applied for a replevin
bond from Mercantile Insurance and the latter issued Bond No. 138 for P600,000.00,
which had a period of 1 year. RTC issued an Order dismissing the Complaint without
prejudice due to Enriquez's continued failure to present evidence. The RTC found that
Enriquez surrendered the van to the BPI, San Fernando Branch but did not comply
when ordered to return it to the sheriff within 24 hours from receipt of the RTC Order.
She also did not comply with prior court orders to prove payment of her premiums on
the replevin bond or to post a new bond. Thus, the RTC declared Bond No. 138
forfeited. Mercantile Insurance was given 10 days to produce the van or to show cause
why judgment should not be rendered against it for the amount of the bond. The RTC,
in a hearing, found that Mercantile Insurance failed to produce the van, and that Bond
No. 138 had already expired. In an Order issued on the same day, the RTC directed
Mercantile Insurance to pay Asuten the amount of P600,000.00. Mercantile Insurance
wrote to Enriquez requesting the remittance of P600,000.00 to be paid on the replevin
bond. Due to Enriquez's failure to remit the amount, Mercantile Insurance paid Asuten
P600,000.00, in compliance with the RTC Order. It was also constrained to file a
collection suit against Enriquez with the RTC of Manila. Enriquez argued that she could
not be held liable since the replevin bond had already expired.
ISSUE:
Whether or not petitioner, Milagros P. Enriquez should be made liable for the amount of
the bond paid by respondent, Mercantile Insurance Company.
RULING:
Yes. Petitioner, Enriquez is made liable for the replevin bond because she failed to
appeal its forfeiture. Basic is the principle that a contract is law between the parties for
as long as it is not contrary to law, morals, good customs, public order, or public policy.
A contract of insurance is, by default, a contract of adhesion. It is prepared by the
insurance company and might contain terms and conditions too vague for a layperson
to understand. Hence, they are construed liberally in favor of the insured. Under their
Indemnity Agreement, petitioner held herself liable for any payment made by
respondent by virtue of the replevin bond. Petitioner contends that the Indemnity
Agreement was a contract of adhesion since respondent made the extent of liability so
comprehensive and allencompassing to the point of being ambiguous. Respondent,
however, does not seek to recover an amount which exceeds the amount of the bond
or any "damages, payments, advances, losses, costs, taxes, penalties, charges,
attorney's fees and expenses of whatever kind and nature," all of which it could have
sought under the Indemnity Agreement. It only seeks to recover from

petitioner the amount of the bond, or P600,000.00 paid to Asuten pursuant to a lawful
order of the RTC. If there were any errors in the judgment of the RTC, petitioner could
have appealed this. Petitioner, however, chose to let his Civil Case lapse into finality.
This case cannot now be used as a substitute for her lost appeal. It is clear from the
antecedents that any losses which petitioner has suffered were due to the
consequences of her actions, or more accurately, her inactions. The civil case which she
filed, was dismissed due to her failure to prosecute. The RTC forfeited the replevin bond
which she had filed because she refused to return the property. She is now made liable
for the replevin bond because she failed to appeal its forfeiture.
CENTRAL VISAYAS FINANCE V. ADLAWAN (G.R. NO. 212674. MARCH 25, 2019)
FIRST DIVISION
[ G.R. No. 212674, March 25, 2019 ]

Factual Antecedents

In 1996, respondents Eliezer and Leila Adlawan obtained a Php3,669,685.00 loan from
petitioner Central Visayas Finance Corporation covered by a Promissory Note,[5] Chattel
Mortgage[6] over a Komatsu Highway Dump Truck, and a Continuing
Guaranty[7] executed by respondents Eliezer, Sr. and Elena Adlawan.

Eliezer and Leila Adlawan failed to pay the loan, prompting petitioner to file an action
against respondents for replevin before Branch 58 of the Cebu Regional Trial Court,
docketed as Civil Case No. CEB-22294.

In a June 22, 1999 decision, the trial court ruled in petitioner's favor, and respondents
were ordered to deliver possession of the dump truck to petitioner. Petitioner then
foreclosed on the chattel mortgage and caused the sale at public auction of the dump
truck, which was then sold to it as the highest bidder for Php500,000.00.[8]

Ruling of the Regional Trial Court

In 2000, petitioner commenced a second case before the RTC - Civil Case No. CEB-
24841 - this time for collection of sum of money and/or deficiency judgment relative to
respondents' supposed unpaid balance on their loan, which petitioner claimed to be at
Php2,104,604.97 - less the value of dump truck - with damages. This time, petitioner in
its Amended Complaint[9] sought to hold respondents Eliezer, Sr. and Elena Adlawan
liable on their continuing guaranty.

On July 31, 2008, the RTC issued an Order, decreeing as follows: This resolves the
affirmative defenses of (a) res judicata; (b) violation of the rule against forum
shopping; and (c) estoppel, pleaded by the defendants in their answer[10] and for
which they were preliminarily heard as if a motion to dismiss had been filed.
x x x x
Contending that defendants Eliezer and Leila still have a balance of P2,104,604.97 as of
July 12, 1999, exclusive of interest, penalty, attorney's fees, cost of the suit and
collection expenses, it filed the instant case, to which the defendants pleaded the
subject affirmative defenses.

The Court agrees with the defendants that the instant complaint is barred by res
judicata under Section 47(b), Rule 39 of the Rules of Court.

The judgment of the 58th Branch of this Court in Civil Case No. CEB-22294, which
involves, as in this case, the same parties, subject matter and cause of action, i.e., non-
payment of the loan, secured by a mortgage over the above vehicle, obtained by
defendants Eliezer and Leila from the plaintiff, was one on the merits, rendered by a
court that had jurisdiction over the subject matter thereof and the parties therein, and
had become final.

The plaintiffs remedy should have been to appeal from the above judgment for its
alleged failure to consider defendants Eliezer and Leila's whole obligation. If, for the
sake of argument, the amount of said defendants' whole obligation to the plaintiff was
not actually raised in said case, hence, the failure of the 58th Branch of this Court to
consider it, it is still covered and barred by res judicata under the above-cited Rule
because it is one that could have been raised therein.

WHEREFORE, the plaintiffs complaint having been barred by res judicata, this case is
hereby ordered DISMISSED.

SO ORDERED.[11] Petitioner moved to reconsider, but was rebuffed.

Ruling of the Court of Appeals

Petitioner appealed the above Order of the trial court before the CA, claiming that the
trial court erred in ruling that res judicata applied, in that there is no identity of cause of
action between Civil Case No. CEB-22294 and Civil Case No. CEB-24841, as the first
was one for the recovery of personal property used as collateral in the loan, while the
latter case was one for deficiency judgment and based on the continuing guaranty
executed by Eliezer, Sr. and Elena Adlawan.

On February 15, 2013, the CA issued the assailed Decision, which contains the following
pronouncement: Under the doctrine of res judicata, a complaint may be dismissed
when, upon the comparison of the two actions, there is (1) an identity between the
parties or at least such as representing the same interest in both actions; (2) a
similarity of rights asserted and relief prayed for (that is, the relief is founded on the
same facts); and (3) identity in the two actions is such that any judgment which may
be rendered in the other action will, regardless of which party is successful, fully
adjudicate or settle the issues raised in the action under consideration.
x x x x
A reading of the reliefs prayed for in Civil Case No. 22294 would show that the principal
relief was for the recovery of the possession of the dump truck, which was used as a
collateral in the mortgage contract between the parties. In the event that delivery
thereof cannot be effected, plaintiff stated an alternative prayer, that is, for the
defendants to pay the amount of Php2,604,604.97 which represented the outstanding
obligation of the defendants. Since the first relief was granted by the trial court, which
is the delivery of the dump truck, was it necessary for the trial court to pronounce the
full monetary liability of the defendants in the said action? Moreover, may the plaintiff
still recover the deficiency of the monetary obligation incurred by the defendants?

The issue presented in this case is not novel. The instant case has similar facts and
circumstances with that of the case of PCI Leasing v. Dai.[12] In this case, the Supreme
Court ruled that an action for replevin, which is both an action in personam and in rem,
bars the deficiency suit because the deficiency could well be raised in the replevin case.
x x x
x x x x
Plaintiff also asserts that there is no identity of parties because Elena Adlawan was not
sued in the first case. It is based on the Continuing [Guaranty] executed by Elena
Adlawan for which she was sued. Hence, it is plaintiffs postulate that had the proceeds
of the first action been sufficient, there would have been no need to file the second
case against Elena Adlawan to enforce her guaranty.

However, it should be stressed that only substantial identity is necessary to warrant the
application of res judicataand the addition or elimination of some parties would not
even alter the situation. There is substantial identity of parties when there is a
community of interest between the party in the first case and a party in the second
case albeit the latter was not impleaded in the first case. In this case, there is no
question that Elena Adlawan, acting as a guarantor, has the same interest and defenses
as that of the principal debtors Spouses Eliezar and Leilani Adlawan. Her exclusion in
the first case is therefore of no moment, res judicata still applies.

As to the damages and other fees being claimed by the defendants, We are inclined to
deny it. It is the plaintiff-appellant's belief that it has a right to institute a deficiency
judgment against the defendants and there should be no premium on its right to litigate
however erroneous such presumption can be. Moreover, bad faith was not raised as an
issue and none is evident in this case.

There being no reversible error committed by the trial court, We find no cogent reason
to reverse its findings, thus, warranting the dismissal of this appeal.

WHEREFORE, this appeal is DENIED. The Order dated July 31, 2008 rendered by the
Regional Trial Court, Branch 8, Cebu City dismissing Civil Case No. CEB-24841 is
AFFIRMED. Costs against the plaintiff-appellant.

SO ORDERED.[13] Petitioner moved to reconsider, but in its April 24, 2014 Resolution,

the CA stood its ground. Thus, the instant Petition.
Issues
In an August 24, 2015 Resolution,[14] this Court resolved to give due course to the
Petition, which contains the following assignment of errors:
I.
THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE DOCTRINE OF RES
JUDICATA TO THE AMENDED COMPLAINT OF PETITIONER FOR DEFICIENCY
JUDGMENT UNDER CIVIL CASE NO. 24841 CONSIDERING THE ABSENCE OF IDENTITY
OF PARTIES AND SIMILARITY OF CAUSES OF ACTION IN THE EARLIER COMPLAINT
FOR REPLEVIN IN CIVIL CASE NO. 22294.
II.
THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE DECISION OF THIS
HONORABLE COURT IN PCI LEASING VS. DAI, G.R. NO. 148980, SEPTEMBER 21, 2007
TO THE CASE OF HEREIN PETITIONER.[15] Petitioner's Arguments

In praying that the assailed CA dispositions be set aside and that, instead, respondents
be adjudged solidarity liable for its monetary claims in Civil Case No. CEB-24841,
petitioner pleads in its Petition and Reply[16] that the CA erred in ruling that res
judicata applies to the subsequent case for collection of deficiency against Eliezer, Sr.
and Elena Adlawan as guarantors in the loan agreement between petitioner and
respondents Eliezer and Leila Adlawan; that the causes of action, parties, and reliefs
prayed for in Civil Case No. CEB-22294 - the case for replevin - are not identical or
similar to the causes of action, parties, and reliefs prayed for in Civil Case No. CEB-
24841 - which is a collection case founded on the liability on the continuing guaranty
executed by respondents Eliezer, Sr. and Elena Adlawan; that the cause of action in
Civil Case No. CEB-24841 arose only after the foreclosure sale of the dump truck
recovered in the replevin case, when it became apparent that the proceeds from the
auction sale were not enough to satisfy the outstanding obligation on the loan; and that
the cited case of PCI Leasing and Finance, Inc. v. Dai does not apply to the instant case
because there is no identity of causes of action and parties in the two cases - Civil Case
No. CEB-22294 and Civil Case No. CEB-24841 - since petitioner in the latter case was
seeking to hold respondents liable on the continuing guaranty executed by Eliezer, Sr.
and Elena Adlawan, who were not parties to the replevin case.

Respondents' Arguments

Respondents, on the other hand, counter in their Comment[17] that the Petition is a

mere rehash of the arguments presented in the trial and appellate courts; that the CA is
correct in finding that res judicata applies in the subsequent case - Civil Case No. CEB-
24841 - filed by petitioner; that the pronouncement in the PCI Leasing case applies, in
that an action for replevin - which is both an action in personam and in rem - bars a
deficiency suit because the deficiency could have been raised in the replevin case; and
that it was erroneous for petitioner to have filed a collection/deficiency case, as it
should have appealed the trial court's decision instead.
Our Ruling
The Court denies the Petition.
For reference and emphasis, we reproduce petitioner's prayer in Civil Case No. CEB-
22294, or the case for replevin which is the first action filed by petitioner, viz.; a. to
forthwith issue a writ of replevin ordering the seizure of the motor vehicle, with all its
accessories and equipment, together with the registration certificate thereof, and direct
the delivery thereof to plaintiff in accordance with law, and after due hearing, declare
that plaintiff is entitled to the possession of the motor vehicle and confirm its seizure
and delivery to plaintiff;

b. or, in the event that manual delivery of the motor vehicle cannot be effected, to
render judgment in favor of the plaintiff and against the defendants ordering them to
pay to plaintiff, the sum of Php2,604,604.97 plus interest and penalty thereon from
June 3, 1998 until fully paid as provided in the promissory note;

c. In either case, to order defendant to pay jointly and severally:

1. The sum of Php651,151.24 as attorney's fees and liquidated damages, plus bonding
fees and other expenses incurred in the seizure of the said motor vehicle; and  2. costs
of suit.[18]

Clearly, petitioner's prayer for relief in its complaint in Civil Case No. CEB-22294 was in
the alternative, and not cumulative or successive, to wit: recover possession of the
dump truck, or, if recovery is no longer feasible, a money judgment for the outstanding
loan amount. Petitioner did not pray for both reliefs cumulatively or successively. "The
rule is that a party is entitled only to such relief consistent with and limited to that
sought by the pleadings or incidental thereto. A trial court would be acting beyond its
jurisdiction if it grants relief to a party beyond the scope of the pleadings."[19]

By praying for recovery of possession with a money judgment as a mere alternative

relief in Civil Case No. CEB-22294, and when it did not pursue a claim for deficiency at
any time during the proceedings in said case, including appeal, petitioner led the courts
to believe that it was not interested in suing for a deficiency so long as it recovered
possession of the dump truck; after all, the basis of its alternative relief for collection of
the outstanding loan is the same as that of its prayer for replevin - the respondents'
unpaid obligation in the amount of Php2,604,604.97, plus interest and penalty. Its
actions were thus consistent with and limited to the allegations and relief sought in its
pleadings. This consistency in action carried on until the dump truck was foreclosed and
sold at auction.

In case of a loan secured by a mortgage, the creditor has a single cause of action
against the debtor - the recovery of the credit with execution upon the security. The
creditor cannot split his single cause of action by filing a complaint on the loan, and
thereafter another separate complaint for foreclosure of the mortgage. This is the ruling
in the case of Bachrach Motor Co., Inc. v. Icarangal,[20] where the Court held: For
non-payment of a note secured by mortgage, the creditor has a single cause of action
against the debtor. This single cause of action consists in the recovery of the credit with
execution of the security. In other words, the creditor in his action may make two
demands, the payment of the debt and the foreclosure of his mortgage. But both
demands arise from the same cause, the non-payment of the debt, and for that reason,
they constitute a single cause of action. Though the debt and the mortgage constitute
separate agreements, the latter is subsidiary to the former, and both refer to one and
the same obligation.

Consequently, there exists only one cause of action for a single breach of that
obligation. Plaintiff, then, by applying the rules above stated, cannot split up his single
cause of action by filing a complaint for payment of the debt, and thereafter another
complaint for foreclosure of the mortgage. If he does so, the filing of the first complaint
will bar the subsequent complaint. By allowing the creditor to file two separate
complaints simultaneously or successively, one to recover his credit and another to
foreclose his mortgage, we will, in effect, be authorizing him plural redress for a single
breach of contract at so much cost to the courts and with so much vexation and
oppression to the debtor.
In PCI Leasing and Finance, Inc. v. Dai[21] cited by respondents, the specific issue of
whether a judgment in a replevin case would bar a subsequent action for deficiency
judgment was raised. The Court resolved the question in the affirmative, thus: For res
judicata to apply, four requisites must be met: (1) the former judgment or order must
be final; (2) it must be a judgment or an order on the merits; (3) it must have been
rendered by a court having jurisdiction over the subject matter and the parties; and (4)
there must be, between the first and second actions, identity of parties, of subject
matter and cause of action.

Petitioner denies the existence of identity of causes of action between the replevin case
and the case for deficiency judgment or collection of sum of money. x x x
x x x x
Petitioner's position fails.
Petitioner ignores the fact that it prayed in the replevin case that in the event manual
delivery of the vessel could not be effected, the court render judgment in its favor by
ordering [herein respondents] to pay ... the sum of P3,502,095.00 plus interest and
penalty thereon from October 12, 1994 until fully paid as provided in the Promissory
Note.

Since petitioner had extrajudicially foreclosed the chattel mortgage over the vessel even
before the pre-trial of the case, it should have therein raised as issue during the pre-
trial the award of a deficiency judgment. After all, the basis of its above-stated
alternative prayer was the same as that of its prayer for replevin - the default of
respondents in the payment of the monthly installments of their loan. But it did not.

Section 49 of Rule 39 of the 1964 Rules of Court, which governed petitioner's complaint
for replevin filed on October 27, 1994, and which Section is reproduced as Section 47 of
the present Rules, reads:

SEC. 49. Effect of judgments or final orders. - The effect of a judgment or final order
rendered by a court of the Philippines, having jurisdiction to pronounce the judgment or
final order, may be as follows:

(a) In case of a judgment or final order against a specific thing, or in respect to the
probate of a will, or the administration of the estate of a deceased person, or in respect
to the personal, political, or legal condition or status of a particular person or his
relationship to another, the judgment or final order is conclusive upon the title to the
thing, the will or administration, or the condition, status or relationship of the person;
however, the probate of a will or granting of letters of administration shall only be
prima facie evidence of the death of the testator or intestate;

(b) In other cases, the judgment or final order is, with respect to the matter directly
adjudged or as to any other matter that could have been raised in relation thereto,
conclusive between the parties and their successors in interest by title subsequent to
the commencement of the action or special proceeding, litigating for the same thing
and under the same title and in the same capacity; and

(c) In any other litigation between the same parties or their successors-in-interest, that
only is deemed to have been adjudged in a former judgment or final order which
appears upon its face to have been so adjudged, or which was actually and necessarily
included therein or necessary thereto. Paragraph (a) is the rule on res judicata in
judgments in rem. Paragraph (b) is the rule on res judicata in judgments in personam.
Paragraph (c) is the rule on collusiveness of judgment.

Petitioner contends that Section 9 of Rule 60 of the 1997 Rules of Court which
reads: Sec. 9. Judgment. - After trial of the issues, the court shall determine who has
the right of possession to and the value of the property and shall render judgment in
the alternative for the delivery thereof to the party entitled to the same, or for its value
in case delivery cannot be made, and also for such damages as either party may prove,
with costs, does not authorize the court to render judgment on the deficiency after
foreclosure, citing BA Finance Corp. v. CA.

But replevin is, as the above-cited BA Finance Corp. case holds, usually described as a
mixed action.

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. 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.
Petitioner's complaint for replevin was doubtless a mixed action - in rem with respect to
its prayer for the recovery of the vessel, and in personam with respect to its claim for
damages. And it was, with respect to its alternative prayer, clearly one in personam.

Following paragraph (b) of Section 49, Rule 39 of the 1964 Rules of Court, now
[Section] 47 of Rule 39 of the present Rules, petitioner's second complaint is
unquestionably barred by res judicata.[22] (Emphasis supplied; citations omitted)
The Bachrach Motor Co., Inc. v. Icarangal and PCI Leasing & Finance, Inc. v.
Dai rulings were reiterated in Allandale Sportsline Inc. v. The Good Development
Corporation,[23] where this Court ruled that -

By causing the auction sale of the mortgaged properties, respondent effectively

adopted and pursued the remedy of extra-judicial foreclosure, using the writ of replevin
as a tool to get hold of the mortgaged properties. As emphasized in Bachrach, one
effect of respondent's election of the remedy of extra-judicial foreclosure is its waiver of
the remedy of collection of the unpaid loan.
x x x x
However, another effect of its election of the remedy of extra-judicial foreclosure is that
whatever deficiency remains after applying the proceeds of the auction sale to the total
loan obligation may still be recovered by respondent.

But to recover any deficiency after foreclosure, the rule is that a mortgage creditor
must institute an independent civil action. However, in PCI Leasing & Finance, Inc. v.
Dai[,] the Court held that the claim should at least be included in the pre-trial brief. In
said case, the mortgage-creditor had foreclosed on the mortgaged properties and sold
the same at public auction during the trial on the action for damages with replevin.
After judgment on the replevin case was rendered, the mortgage-creditor filed another
case, this time for the deficiency amount. The Court dismissed the second case on the
ground of res judicata, noting that:

Petitioner ignores the fact that it prayed in the replevin case that in the event manual
delivery of the vessel could not be effected, the court render judgment in its favor by
ordering [herein respondents] to pay x x x the sum of P3,502,095.00 plus interest and
penalty thereon from October 12, 1994 until fully paid as provided in the Promissory
Note.

Since petitioner had extrajudicially foreclosed the chattel mortgage over the vessel even
before the pre-trial of the case, it should have therein raised as issue during the pre-
trial the award of a deficiency judgment. After all, the basis of its above-stated
alternative prayer was the same as that of its prayer for replevin - the default of
respondents in the payment of the monthly installments of their loan. But it did
not. (Emphasis and underscoring supplied; citations omitted)
Finally, in Marilag v. Martinez,[24] the Bachrach ruling was once more referenced, and
the Court therein ruled, as follows:

Petitioner's contention that the judicial foreclosure and collection cases enforce

independent rights must, therefore, fail because the Deed of Real Estate Mortgage and
the subject PN both refer to one and the same obligation, i.e., Rafael's loan obligation.
As such, there exists only one cause of action for a single breach of that
obligation. Petitioner cannot split her cause of action on Rafael's unpaid loan obligation
by filing a petition for the judicial foreclosure of the real estate mortgage covering the
said loan, and, thereafter, a personal action for the collection of the unpaid balance of
said obligation not comprising a deficiency arising from foreclosure, without violating
the proscription against splitting a single cause of action, where the ground for
dismissal is either res judicata or litis pendentia, as in this case.

x x x x

Further on the point, the fact that no foreclosure sale appears to have been conducted
is of no moment because the remedy of foreclosure of mortgage is deemed chosen
upon the filing of the complaint therefor. In Suico Rattan & Buri Interiors, Inc. v. CA, it
was explained:

x x x In sustaining the rule that prohibits mortgage creditors from pursuing both the
remedies of a personal action for debt or a real action to foreclose the mortgage, the
Court held in the case of Bachrach Motor Co., Inc. v. Esteban Icarangal, et al. that a
rule which would authorize the plaintiff to bring a personal action against the debtor
and simultaneously or successively another action against the mortgaged property,
would result not only in multiplicity of suits so offensive to justice and obnoxious to law
and equity, but also in subjecting the defendant to the vexation of being sued in the
place of his residence or of the residence of the plaintiff, and then again in the place
where the property lies. Hence, a remedy is deemed chosen upon the filing of the suit
for collection or upon the filing of the complaint in an action for foreclosure of
mortgage, pursuant to the provisions of Rule 68 of the Rules of Court As to extrajudicial
foreclosure, such remedy is deemed elected by the mortgage creditor upon filing of the
petition not with any court of justice but with the office of the sheriff of the province
where the sale is to be made, in accordance with the provisions of Act No. 3135, as
amended by Act No. 4118.

As petitioner had already instituted judicial foreclosure proceedings over the mortgaged
property, she is now barred from availing herself of an ordinary action for collection,
regardless of whether or not the decision in the foreclosure case had attained finality.
In fine, the dismissal of the collection case is in order.(Emphasis supplied; citations
omitted)

Contrary to petitioner's stance, the pronouncements in Bachrach Motor Co., Inc. v.

Icarangal and PCI Leasing & Finance, Inc. v. Dai apply to the instant case. Particularly,
the PCI Leasing case is squarely applicable; the CA committed no error in invoking the
ruling in said case. By failing to seek a deficiency judgment in Civil Case No. CEB-22294
after its case for recovery of possession was resolved, petitioner is barred from
instituting another action for such deficiency. Pursuant to Section 47, Rule 39 of the
1997 Rules of Civil Procedure, on the effect of judgments or final orders cited in the PCI
Leasing case, the judgment in Civil Case No. CEB-22294 is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in relation
thereto, conclusive between the petitioner and respondents.

Petitioner's final claim to reversal is that there could be no identity of causes of action
between Civil Case No. CEB-22294 and Civil Case No. CEB-24841 since the latter case
was instituted for the specific purpose of recovering the deficiency from respondents
Eliezer, Sr. and Elena Adlawan, who were supposedly liable as guarantors on the
continuing guaranty that accompanied the loan agreement between petitioner and
respondents Eliezer and Leila Adlawan. However, with the final resolution of Civil Case
No. CEB-22294, petitioner's cause of action against respondents Eliezer, Sr. and Elena
Adlawan is likewise barred. The contract of guaranty is merely accessory to a principal
obligation; it cannot survive without the latter. Under Article 2076 of the Civil Code,
"(t)he obligation of the guarantor is extinguished at the same time as that of the
debtor, and for the same causes as all other obligations." The resolution of Civil Case
No. CEB-22294 and the consequent satisfaction of petitioner's claim therein bars further
recovery via a deficiency judgment as against respondents Eliezer and Leila Adlawan,
who are deemed to have paid their loan obligation. For this reason, their obligation has
been extinguished which should, in turn, operate to the benefit of their corespondents,
Eliezer, Sr. and Elena Adlawan whose liability is based on guaranty, a mere accessory
contract to the loan obligation that cannot survive after the extinguishment of the
latter.

WHEREFORE, the Petition is DENIED. The February 15, 2013 Decision and April 24,
2014 Resolution of the Court of Appeals in CA-G.R. CEB-C.V. No. 02899 are AFFIRMED.
SO ORDERED.

Bersamin, C. J., Gesmundo, and Carandang, JJ., concur.

Jardeleza, J., on official leave.
G.R. No. 131283 October 7, 1999
OSCAR C. FERNANDEZ and NENITA P. FERNANDEZ, petitioners,
vs.
THE INTERNATIONAL CORPORATE BANK, now UNION BANK OF THE
PHILIPPINES; and PREMIERE INSURANCE & SURETY CORP., respondents.
PANGANIBAN, J.:
A writ of replevin issued by the Metropolitan Trial Court of Pasay City may be served
and enforced anywhere in the Philippines. Moreover, the jurisdiction of a court is
determined by the amount of the claim alleged in the complaint, not by the value of the
chattel seized in ancillary proceedings.
The Case
Spouses Oscar C. Fernandez and Nenita P. Fernandez challenge, via the instant Petition
for Review on Certiorari 1 under Rule 45 of the Rules of Court, the September 4, 1997
Decision 2 and the November 14, 1997 Resolution, 3 both issued by the Court of
Appeals 4 in CA-GR SP No. 44409.
The assailed Decision dismissed petitioners' suit for certiorari and prohibition praying for
the redelivery of the vehicle seized from them and for the declaration of nullity of the
Writ of Replevin, which had been issued by Judge Estelita M. Paas 5 of the Metropolitan
Trial Court of Pasay City, 6 and all Other subsequent thereto. The challenged
Resolution, on the other hand, denied reconsideration.
The Facts
In its assailed Decision, the Court of Appeals summarized the facts as follows:
. . . [O]n or about October 26, 1993, [petitioners] purchased a Nissan Sentra Sedan
through a financing scheme of the private respondent, the International Corporate
Bank, now Union Bank of the Philippines, and the chattel mortgage was executed in
favor of the financing institution on November 10, 1993. As borne out by the Disclosure
Statement in the credit transaction, the cash purchase price was P492,000.00, minus
the downpayment of P147,500.00, leaving the amount of P344,[5]00.00 to be financed.
The total amount to be paid for 48 monthly installments would amount to
P553,944.00.1âwphi1.nêt
Petitioner added that due to the respondent bank's "greedy desire" to unjustly enrich
itself at the expense of the petitioners, the former filed an unfounded complaint for a
sum of money with replevin (Case No. 983-96) before the Metropolitan Trial Court,
Branch 44, Pasay City.
Considering that the principal amount involved was P553,944.00, petitioners filed an
Answer mentioning in the special and affirmative defenses a Motion to Dismiss, for lack
of jurisdiction, but this was denied on February 10, 1997 and was received on February
20, 1997. A Motion for Reconsideration was then submitted on April 2, 1997.
Aside from that, petitioners contested the venue considering that the principal office of
the respondent bank [was] in Makati, while their residence [was] in Quezon City.
The Motion for Reconsideration was denied on May 9, 1997 and received by them on
May 29, 1997.
When the respondent bank filed its complaint with prayer for the issuance of a Writ of
Replevin on November 28, 1997, the monthly installments were almost fully paid;
[they] would have been fully paid on November 26, 1997. Furthermore, the car's
mileage at the time of illegal seizure was only 28,464 kilometers. They could not have
been considered in default at the time the complaint was filed, considering that: (a)
they attempted many times to pay the bank their installments for the months of
August, September, October, 1996, and up to the time of the filing of the case, they
ha[d] not received any statement of delinquency as mandated by R.A. No. 3165,
otherwise known as the Truth in Lending Act.
If at all, petitioners added, the baseless filing of the case was deliberately done to
enrich the bank at the expense of the petitioners which [was] tantamount to simple
robbery. They even tried consigning the P69,168.00 through a Manager's Check dated
January 7, 1997 for the months of August to February, 1997, or beyond the four
months installment in advance but were similarly refused by the court for no valid
reason.
Their petition for the outright dismissal of the complaint, as well as the lifting of the
Writ of Replevin was denied even if the amount of P553,344.00 representing the value
of the chattel was beyond the jurisdiction of the court.
To be precise, the February 10, 1997 Order (Rollo, p. 17) states:
For consideration before this court is the Urgent Motion to Re-deliver the Chattel and
the Motion to Dismiss by way of Special and Affirmative Defenses the following:
that this Honorable Court has no jurisdiction to try the case and to issue the Writ of
Replevin, for the reason that the plaintiffs office is in Makati and defendant's residence
is in Quezon City and that the amount involved is P553,344.00 which is beyond the
jurisdiction of this Honorable Court.
xxx xxx xxx
This Court has carefully reviewed the records of this case as well as the Sheriff's Return
which [show] that the subject value covered by the Writ of Replevin was seized on
January 7, 1997 by the branch sheriff of this court and thereafter turned over to the
plaintiff in this case.
Under the Rules of Court, the defendant has a period of 5 days from January 7, 1997 to
post a re-delivery bond, in order to secure the return of the subject vehicle and to post
a counter bond double the amount of the chattel.
In this respect, defendants failed to exercise his right.
As to the question of jurisdiction the complaint [shows] that the amount plaintiff seeks
to recover is P190,635.00, which is well within the jurisdiction of this Honorable Court.
Likewise the attached Promissory Note in the Complaint also contains stipulation as to
the venue agreed upon by the parties in case an action is filed in court, in which case
this court has jurisdiction.
WHEREFORE, finding the Motion to Re-deliver chattel filed by the defendant to be
untenable, the same is hereby denied for lack of merit.
The Motion to Dismiss on ground of lack of jurisdiction is likewise denied for being
unmeritorious.
SO ORDERED. 7
Ruling of the Court of Appeals
The Court of Appeals ruled that the Metropolitan Trial Court (MTC) of Pasay City had
jurisdiction over civil cases in which the amount of the demand did not exceed
P200,000 exclusive of interest, damages and attorney's fees. The basic claim in the
present case was P190,635.90; hence, the MTC had jurisdiction.
The appellate court further held that the objection to the impropriety of the venue
should have been raised in a motion to dismiss before the filing of a responsive
pleading. The said issue, however, was raised for the first time only in petitioners'
Answer.
Lastly, the Court of Appeals agreed with the MTC that the Writ of Replevin could be
validly executed anywhere in Metro Manila because Section 27, Chapter III of B.P. 129,
authorized the establishment of the Metropolitan Trial Court of Metro Manila with
eighty-two (82) branches. Therefore, any branch — in this case, Branch 44 which was
stationed in Pasay — could issue writs and processes that could validly be served and
executed anywhere within Metro Manila.
Aggrieved, petitioners now seek the reversal of the foregoing rulings through this
recourse. 8
Issues
In their Memorandum, petitioners present the following issues:
1. The jurisdiction of the Metropolitan Trial Court of Pasay City is strictly limited within
the confines of the boundary limits of Pasay City, B.P. 129, Sec. 28.
2. The Metropolitan Trial Court's jurisdiction is limited to not more than two hundred
thousand pesos.
3. Assuming that the Metropolitan Trial Court of Pasay City has jurisdiction to try and
decide the case and to issue the ancillary writ of replevin, the Court of Appeals
grievously erred in sanctioning the order of [the] Metropolitan Trial Court of Pasay City
in denying Petitioners['] Motion for Redelivery of the vehicle which was filed within five
days after such seizure, which in essence [was] an outright departure from the express
provision of the law and the settled jurisprudence on the matter.
4. The bank's Memorandum dated July 5, 1999 should be stricken off and ordered
expunged from the records for being fatally defective in form and substance. No
Annexes to said Memorandum were attached to petitioners' copy, thereby making said
memorandum fatally defective because the annexes [were] integral part[s] of the
memorandum itself. Up to this late date, respondent Premiere Insurance and Surety
Corporation has not submitted its memorandum and may now therefore be deemed to
have admitted the entire text of the Petition to be true, valid and binding against it.
To resolve this case, this Court shall dispose of the following questions: (1) May the
Writ of Replevin issued by the MTC of Pasay City be enforced outside the city? (2) Did
the MTC have jurisdiction over the Complaint? (3) Were petitioners entitled to the
redelivery of the subject vehicle?
This Court's Ruling
The Petition has no merit.
First Issue: Territorial Enforcement
of the Writ of Replevin
Petitioners argue that the Writ of Replevin issued by the Metropolitan Trial Court of
Pasay could be enforced only within the confines of Pasay City. In support, they cite
Section 28 of Batas Pambansa (BP) 129, which states:
Sec. 28. Other Metropolitan Trial Courts. — The Supreme Court shall constitute
Metropolitan Trial Courts in such other metropolitan areas as may be established by law
whose territorial jurisdiction shall be co-extensive with the cities and municipalities
comprising the metropolitan area.
Every Metropolitan Trial Judge shall be appointed to a metropolitan area which shall be
his permanent station and his appointment shall state the branch of the court and the
seat thereof to which he shall be originally assigned. A Metropolitan Trial Judge may be
assigned by the Supreme Court to any branch within said metropolitan area as the
interest of justice may require, and such assignment shall not be deemed an
assignment to another station within the meaning of this section. 9
We are not convinced. Under the Resolution of the Supreme Court en banc dated
January 11, 1983, providing for the interim rules and guidelines relative to the
implementation of BP 129, a writ of replevin like the one issued in the present case may
be served anywhere in the Philippines. Specifically, the said Resolution states:
3. Writs and processes. —
(a) Writs of certiorari, prohibition, mandamus, quo, warranto, habeas corpus and
injunction issued by a regional trial court may be enforced in any part of the region.
(b) All other processes, whether issued by a regional trial court or a metropolitan trial
court, municipal trial court or municipal circuit trial court may be served anywhere in
the Philippines, and, in the last three cases, without a certification by the judge of the
regional trial court. 10
Thus, the Writ of Replevin issued by Judge Paas, which obviously does not fall under
item "a" of the above-cited Rule, may be validly enforced anywhere in the Philippines.
Petitioners confused the jurisdiction of a court to hear and decide a case on the one
hand with, on the other, its power to issue writs and processes pursuant to and in the
exercise of said jurisdiction. Applying the said Rule, Malaloan v. Court of
Appeals 11 reiterated the foregoing distinction between the jurisdiction of the trial court
and the administrative area in which it could enforce its orders and processes pursuant
to the jurisdiction conferred on it:
We feel that the foregoing provision is too clear to be further belabored or enmeshed in
unwarranted polemics. The rule enumerates the writs and processes which, even if
issued by a regional trial court, are enforceable only within its judicial region. In
contrast, it unqualifiedly provides that all other writs and processes, regardless of which
court issued the same, shall be enforceable anywhere in the Philippines. No legal
provision, statutory or reglementary, expressly or impliedly provides a jurisdictional or
territorial limit [to] its area of enforceability. On the contrary, the above-quoted
provision of the interim Rules expressly authorizes its enforcement anywhere in the
country, since it is not among the processes specified in paragraph (a) and there is no
distinction or exception made regarding the processes contemplated in paragraph (b).
Objection to Venue
Too Late
Petitioners object to the filing of the Complaint in Pasay City, pointing out that their
residence is in Quezon City, while private respondent's principal place of business is in
Makati. Again, we are not persuaded. Under the Rules of Court before the 1997
amendments, 12 an objection to an improper venue must be made before a responsive
pleading is filed. Otherwise, it will be deemed waived. In Diaz v. Adiong, 13 the Court
explained such requirement in this wise:
. . . Indeed, the laying of venue is procedural rather than substantive, relating as it
does to jurisdiction of the court over the person rather than the subject matter. Venue
relates to trial and not to jurisdiction.
Finally, Sec. 1 of Rule 16 provides that objections to improper venue must be made in a
motion to dismiss before any responsive pleading is filed. Responsive pleadings are
those which seek affirmative relief and set up defenses. Consequently, having already
submitted his person to the jurisdiction of the trial court, petitioner may no longer
object to the venue which, although mandatory in the instant case, is nevertheless
waivable. As such, improper venue must be seasonably raised, otherwise, it may be
deemed waived. 14
In the present case, petitioners' objection to the venue of the case was raised for the
first time in the Answer itself. Not having been raised on time, their objection is
therefore deemed waived.
In any event, petitioners had agreed to a stipulation in the Promissory Note that a suit
arising from their transaction may be filed in the proper court anywhere in Metro
Manila, at the sole option of respondent bank. 15 Necessarily, Pasay City is deemed
included in the said stipulation.
Second Issue:
MTC's Jurisdiction Over the Complaint
Petitioners argue that the value of the property seized is in excess of P200,000 and thus
outside the jurisdiction of the Metropolitan Trial Court. This argument has no legal and
factual basis. The fundamental claim in the main action against petitioners, as shown in
respondent bank's Complaint, is the collection of the sum of P190,635.90, an amount
that is clearly within the jurisdiction of the MTC. Although the value of the vehicle
seized pursuant to the Writ of Replevin may have exceeded P200,000, that fact does
not deprive the trial court of its jurisdiction over the case. After all, the vehicle was
merely the subject of a chattel mortgage that had been used to secure petitioners' loan.
In any case, private respondents are entitled only to the amount owed them. Under
Section 14 of the Chattel Mortgage Law, the proceeds of the sale of the mortgaged
property shall be used primarily to pay the costs of the sale, the obligation that has
been secured and other subsequent obligations; and the balance will be turned over to
the mortgagors, herein petitioners.
Third Issue:
Redelivery of Subject Vehicle
Petitioners assail the MTC's refusal to release the seized vehicle despite a Manager's
Check in the amount of P69,168 they issued for the redelivery of the vehicle within five
days from its seizure.
This argument is devoid of merit. As observed by the trial court, petitioners failed to
comply with the requisites for the redelivery of the vehicle seized:
Under the Rules of Court, the defendant has a period of 5 days from January 7, 1997 to
post a re-delivery bond, in order to secure the return of the subject vehicle and to post
a counter bond double the amount of the chattel.
In this respect[,] defendants failed to exercise his right. 16
Indeed, a careful perusal of the records shows that petitioners failed to comply with the
requirements prescribed by Rule 60 of the Rules of Court in effect at the time: 17
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, he 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's affidavit, for the delivery of the property to the
plaintiff, if such delivery be adjudged, and 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.
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.
In their Petition for Review, petitioners plainly admit that they issued a check for only
P69,168 for the purpose of covering the advance payments plus the redelivery bond.
Clearly, that amount was insufficient to cover even just the required redelivery bond
alone, which should be in an amount double that of the chattel. Hence, the MTC's
refusal to grant petitioners' Motion for redelivery was correct, and the Court of Appeals
did not err in upholding it.1âwphi1.nêt
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs
against petitioners.
SO ORDERED.
Navarro vs. Escobido, GR 153788, November 27, 2009
(Provisional Remedies: Replevin: Prior demand is not a condition precedent)
Facts: 
Private respondent (Karen Go) files a complaint with a prayer for the issuance of a writ
of replevin against petitioner (Navarro) for the seizure of 2 motor vehicles under lease
agreement. Petitioner maintains among others in the case at bar that the complaints
were premature because no prior demand was made on him to comply with the
provisions of the lease agreements before the complaints for replevin were filed.
Issue:
WON prior demand is a condition precedent to an action for  a writ of replevin.
Held:
No. Petitioner erred in arguing that prior demand is required before an action for a writ
of replevin is filed since we cannot liken a replevin action to an unlawful detainer.
For a writ of replevin to issue, all that the applicant must do is to file an affidavit and
bond, pursuant to Section 2, Rule 60 of the Rules, which states:
Sec. 2. Affidavit and bond.
The applicant must show by his own affidavit or that of some other person who
personally knows the facts:
(a)      That the applicant is the owner of the property claimed, particularly describing
it, or is entitled to the possession thereof;
(b)      That the property is wrongfully detained by the adverse party, alleging the cause
of detention thereof according to the best of his knowledge, information, and belief;
(c)      That the property has not been distrained or taken for a tax assessment or a fine
pursuant to law, or seized under a writ of execution or preliminary attachment, or
otherwise placed under custodialegis, or if so seized, that it is exempt from such seizure
or custody; and
(d) The actual market value of the property.
The applicant must also give a bond, executed to the adverse party in double the value
of the property as stated in the affidavit aforementioned, for the return of the property
to the adverse party if such return be adjudged, and for the payment to the adverse
party of such sum as he may recover from the applicant in the action.
The SC held that there is nothing in the afore-quoted provision which requires the
applicant to make a prior demand on the possessor of the property before he can file
an action for a writ of replevin. Thus, prior demand is not a condition precedent to an
action for a writ of replevin.
Serg’s Products, Inc. vs. PCI Leasing G.R. No. 137705. August 22, 2000

FACTS:

PCI Leasing and Finance filed a complaint for sum of money, with an application for a
writ of replevin. 
Judge issued a writ of replevin directing its sheriff to seize and deliver the machineries
and equipment to PCI Leasing after 5 days and upon the payment of the necessary
expenses. 
The sheriff proceeded to petitioner's factory, seized one machinery, with word that he
would return for other machineries. 
Petitioner (Serg’s Products) filed a motion for special protective order to defer
enforcement of the writ of replevin. 
PCI Leasing opposed the motion on the ground that the properties were still personal
and therefore can still be subjected to seizure and writ of replevin. 
Petitioner asserted that properties sought to be seized were immovable as defined in
Article 415 of the Civil Code. 
Sheriff was still able to take possession of two more machineries 
In its decision on the original action for certiorari filed by the Petitioner, the appellate
court, Citing the Agreement of the parties, held that the subject machines were
personal property, and that they had only been leased, not owned, by petitioners; and
ruled that the "words of the contract are clear and leave no doubt upon the true
intention of the contracting parties."

ISSUE:
Whether or not the machineries became real property by virtue of immobilization.
Ruling:
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.

Writ of Replevin: Rule 60 of the Rules of Court provides that writs of replevin are issued
for the recovery of personal property only.

Article 415 (5) of the Civil Code provides that machinery, receptacles, instruments or
implements intended by the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend directly to meet the
needs of the said industry or works

In the present case, the machines that were the subjects of the Writ of Seizure were
placed by petitioners in the factory built on their own land.They were essential and
principal elements of their chocolate-making 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 elements in the industry.”

However, contracting parties may validly stipulate that a real property be considered as
personal. After agreeing to such stipulation, they are consequently estopped from
claiming otherwise.Under the principle of estoppel, a party to a contract is ordinarily
precluded from denying the truth of any material fact found therein.

Section 12.1 of the Agreement between the parties provides “The PROPERTY is, and
shall at all times be and remain, personal property notwithstanding that the PROPERTY
or any part thereof may now be, or hereafter become, in any manner affixed or
attached to or embedded in, or permanently resting upon, real property or any building
thereon, or attached in any manner to what is permanent.”

The machines are personal property and they are proper subjects of the Writ of
Replevin
Provisional Remedies > Replevin A.M. No. P-04-1920. August 17, 2007 SPOUSES
NORMANDY and RUTH BAUTISTA, Complainants, vs. ERNESTO L. SULA, Sheriff IV,
Regional Trial Court, Branch 98, Quezon City, Respondent. Carpio, J. RELEVANT
FACTS

Petitioner Ruth Bautista borrowed P300K from Ceniza Glor, over which she executed a
chattel mortgage over her Honda CRV. Petitioner failed to repay her debt or surrender
the vehicle. Hence, Glor filed a civil case for judicial foreclosure of chattel mortgage
with prayer for the issuance of replevin. RTC issued a writ of replevin directing
respondent Sheriff Sula to take possession of the vehicle and keep it in his custody for 5
days. Respondent enforced the writ afterwards. Petitioner spouses then filed with the
TC an urgent motion for the return of the vehicle and the submission of counter-bond.
They later withdrew the said motion and instead attached an omnibus motion for entry
of appearance, urgent settin go hearing, and redelivery of the vehicle to them. RTC
failed to approve the spouses’ counter-bond within the 5-day period provided in Rule
60, Sec. 6. Subsequently, Glor asked respondent sheriff through a letter to deliver the
vehicle to her. o In a another letter, spouses asked respondent not to deliver the
vehicle to Glor because (1) pursuant to Section 5, they had required the return of the
vehicle to them and filed the corresponding counter-bond; (2) the vehicle’s delivery to
Glor was not justified under Section 6; and (3) there was no order from the trial court
directing the delivery to Glor. o In yet another letter, Glor reiterated her demand on
respondent to deliver the vehicle to her; otherwise, she would be constrained to pursue
legal actions against him. Later on, spouses allege that respondent sheriff approached
them in the QC Hall of Justice and asked for P20K grease money in order to return the
vehicle to them. They were only able to give 3K so the respondent sheriff did not return
the vehicle to them. Respondent sheriff filed a sheriff’s manifestation asking the trial
court’s guidance on whether he should deliver the vehicle to Glor or keep it in custodia
legis. o Without waiting for the trial court’s instructions regarding the vehicle,
respondent sheriff filed his sheriff’s return stating that he had already delivered the
vehicle to Glor. Spouses then went to the Ombudsman and Office of the Court of
Administrator to file an administrative complaint against respondent sheriff. Since the
acts complained of were related to respondent’s functions as an officer of the court, the
Office of the Ombudsman referred the matter to the OCA. Respondent sheriff prayed
that the instant case be dismissed because: o Spouses’ accusations against him were
malicious and unfounded. o He was only guided by the orders of the court and, in their
absence, by the Rules of Court particularly Rule 60. Under Section 6 of the said Rule,
the vehicle’s delivery to Glor followed as a matter of course because she posted a bond
which was approved by the court. On the other hand, up to the time of the delivery,
complainants’ counter-bond had not been approved by the court. o Spouses’ accusation
that he asked for ₱20,000 was incredulous and a total lie. o Complainants had no
evidence to support their accusation. o He enjoyed the presumption of regularity in the
performance of his duties. The OCA found that respondent erred when he released the
vehicle to Glor without waiting for the trial court’s instructions on who had a better right
over the vehicle. o The OCA recommended that (1) the motion to preventively suspend
respondent be denied; (2) the previous recommendation imposing a fine of ₱4,000 on
respondent for grave abuse of authority be adopted; and (3) the charges for violation
of the Anti-Graft and Corrupt Practices Act, gross ignorance of the law, and conduct
prejudicial to the best interest of the service be dismissed for insufficiency of evidence.

University of the Philippines College of Law MSI D2021 ISSUE AND RATIO DECIDENDI
Issue:
W/N respondent sheriff is liable for simple misconduct –
YES

Ratio 

 This issue is related to topic of replevin.

Complainants bear the burden of proving, by substantial evidence, the allegations in the
complaint. "Substantial evidence means such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion." In the instant case, complainants
failed to substantiate the allegation that respondent violated the Anti-Graft and Corrupt
Practices Act. The Court, however, finds respondent liable for simple misconduct.
Simple misconduct has been defined as an unacceptable behavior that transgresses the
established rules of conduct for public officers. It is an unlawful behavior. "Misconduct
in office is any unlawful behavior by a public officer in relation to the duties of his office,
willful in character. It generally means wrongful, improper, unlawful conduct motivated
by a premeditated, obstinate, or intentional purpose although it may not necessarily
imply corruption or criminal intent." The OCA found that respondent erred when he
delivered the vehicle to Glor without waiting for the trial court’s instructions on the
matter. In this case, plaintiff/applicant had posted a replevin bond duly approved by the
court. Nevertheless, one of the elements upon which the property subject of replevin
may be delivered to the plaintiff/applicant is lacking. There appears to be no court order
issued yet for the release of the aforementioned property to the plaintiff/applicant. The
order dated 12 May 2004 issued by the court only directed respondent to take into his
custody the subject motor vehicle. Further, respondent filed a manifestation seeking
guidance from the court on the disposal of the seized property. Hence, respondent’s
justification that the release of the seized property to the plaintiff/applicant follows as a
matter of course because the applicant/plaintiff had already filed a replevin bond to
answer for any damage that may be suffered by complainants may not be given weight.
It must be stressed that the prerogatives of Sheriffs do not give them any discretion to
determine who among the parties is entitled to possession of the subject property. The
appropriate course of action should have been for respondent to wait for the
instructions of the court as to whom he will release the property since he had already
asked for its guidance through his Manifestation which was submitted to the court
virtually at the close of office hours on 26 May 2004. Yet the following morning, he
suddenly decided to release the car to the plaintiff without waiting for any court order
on the matter. Such apparent haste raised questions on his actions and leaves doubts
as to his intent or interest in the case. Moreover, under the Revised Rules of Court, the
property seized under a writ of replevin is not to be delivered immediately to the
plaintiff. This is because a possessor has every right to be respected in its possession
and may not be deprived of it without due process. The purpose of the five (5) day
period in Section 6, Rule 60 is to give defendants in a replevin case a chance to require
the return of the property by filing a counter[-]bond. Considering that there was no
court order to release the property to the applicant/plaintiff and the complainants were
able to require the return of the property and file their counter[-]bond within the five
(5) day period required by the Rules, respondent should have been more circumspect in
releasing the property to the plaintiff/applicant. By hastily deciding to release the seized
property to the plaintiff/applicant without waiting for the court’s order, respondent
patently abused his authority. Good faith on respondent’s part, or lack of it, would be of
no moment for he is chargeable with the knowledge that being an officer of the court,
his duty is to comply with the Rules. Sections 5 and 6 of Rule 60 provide that: o SEC. 5.
Return of property. — If the adverse party objects to the sufficiency of the applicant’s
bond, or of the surety or sureties thereon, he cannot immediately require the return of
the property, but if he does not so object, he may, at any time before the delivery of
the property to the applicant, require the return thereof, by filing with the

University of the Philippines College of Law MSI D2021

court where the action is pending a bond executed to the applicant, in double the value
of the property as stated in the applicant’s affidavit for the delivery thereof to the
applicant, if such delivery be adjudged, and for the payment of such sum to him as may
be recovered against the adverse party, and by serving a copy of such bond on the
applicant. o 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 applicant’s 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. (Emphasis
ours) Under Section 5, complainants may require the return of the vehicle by (1)
posting a counter-bond in double the value of the vehicle and (2) serving Glor with a
copy of the counter-bond. Both requirements must be complied with before the vehicle
is delivered to Glor. o 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, and (2) serve plaintiff with a
copy thereof, both requirements — as well as compliance therewith within the five-day
period mentioned — being mandatory. x xx Conformably, a defendant in a replevin suit
may demand the return of possession of the property replevined by filing a redelivery
bond executed to the plaintiff in double the value of the property as stated in the
plaintiff’s affidavit within the period specified in Sections 5 and 6. Under Section 6, the
vehicle shall be delivered to Glor only under the following instances: o If within five
days after the taking of the vehicle, complainants do not object to the sufficiency of the
bond or of the surety or sureties thereon; o If within five days after the taking of the
vehicle, complainants object to the sufficiency of the bond and the trial court affirms its
approval of Glor’s bond or approves a new bond; or o If within five days after the
taking of the vehicle, complainants require the return of the vehicle and their bond is
objected to and found insufficient and they do not forthwith file an approved bond. The
nature of a sheriff’s functions is essentially ministerial. Their prerogatives do not give
them any discretion to determine who among the parties is entitled to possession of the
subject properties. The appropriate course of action should have been for respondents
to inform their judge of the situation by way of a partial Sheriff’s Return and wait for
instructions on the proper procedure to be observed. These respondents failed to do.

RULING WHEREFORE, we find respondent Ernesto L. Sula, Sheriff IV, Regional Trial
Court, Branch 98, Quezon City, GUILTY of SIMPLE MISCONDUCT. Accordingly, we
SUSPEND him for six months without pay and STERNLY WARN him that a repetition of
the same or similar acts shall be dealt with more severely. SO ORDERED. SEPARATE
OPINIONS NOTES