MIAA vs.
AFIC contract being cited by the CA which provides that
Facts:
Manila International Airport Authority
(MIAA) entered into a contract of lease with Avia
Filipinas International, Inc. (AFIC), wherein MIAA
allowed AFIC to use specific portions of land as well
as facilities within NAIA for the latter's aircraft repair
station and chartering operations. The contract was
for one (1) year, beginning September 1, 1990 until
August 31, 1991, with a monthly rental of P6,580.00.
In December 1990, MIAA issued an
Administrative Order which revised the rates of dues,
charges, fees or assessments for the use of its
properties, facilities and services within the airport
complex. The AO was made effective on December 1,
1990. As a consequence, the monthly rentals due from
AFIC was increased to P15,996.50. Nonetheless,
MIAA did not require AFIC to pay the new rental fee.
Thus, it continued to pay the original fee of
P6,580.00.
After the expiration of the contract, AFIC
continued to use and occupy the leased premises
giving rise to an implied lease contract on a monthly
basis. AFIC kept on paying the original rental fee
without protest on the part of MIAA.
3 years after the expiration of the original
contract of lease, MIAA informed AFIC, through a
billing statement that the monthly rental over the
subject premises was increased to P15,966.50
beginning the date immediately following the
expiration of the original contract of lease. MIAA
sought recovery of the difference between the
increased rental rate and the original rental fee
amounting to a total of P347,300.50 covering thirty-
seven (37) months. AFIC paid the increased rental fee.
However, it refused to pay the lump sum of
P347,300.50 sought to be recovered by MIAA. For the
continued refusal of AFIC to pay the said lump sum,
its employees were denied access to the leased
premises.
AFIC then filed with the RTC a Complaint for
damages with injunction against MIAA and its
General Manager seeking uninterrupted access to the
leased premises.
RTC and CA ruled in favor of AFIC.
MIAA contends that, as an administrative agency
possessed of quasi-legislative and quasi-judicial
powers as provided for in its charter, it is empowered
to make rules and regulations and to levy fees and
charges; that its issuance of AO is pursuant to the
exercise of the abovementioned powers; that by
signing the lease contract, respondent AFIC already
agreed and gave its consent to any further increase in
rental rates; as such, the provisions of the lease
"any amendment, alteration or modification [of the
lease contract] shall not be valid and binding, unless
and until made in writing and signed by the parties
thereto" is deemed complied with because respondent
already consented to having any subsequent
amendments to AO automatically incorporated in the
lease contract; that the above-quoted provisions
should not also be interpreted as having the effect of
limiting the authority of MIAA to impose new rental
rates in accordance with its authority under its
charter.
Issue: Did the lower court correctly interpreted the
provisions of the lease contract
Held: YES.
In the present case, the Court finds nothing
repugnant to law with respect to the questioned
provision of the contract of lease between petitioner
and respondent. It is true that Article II, Paragraph
2.04 of the Contract of Lease states that "[a]ny
subsequent amendment to Administrative Order No.
4, Series of 1982, which will effect a decrease or
escalation of the monthly rental or impose new and
additional fees and charges, including but not limited
to government/MIAA circulars, rules and regulation
to this effect, shall be deemed incorporated herein and
shall automatically amend this Contract insofar as the
monthly rental is concerned." However, the Court
agrees with the CA that the above quoted provision of
the lease contract should not be read in isolation.
Rather, it should be read together with the provisions
of Article VIII, Paragraph 8.13, which provide that
"[a]ny amendment, alteration or modification of the]
Contract shall not be valid and binding, unless and
until made in writing and signed by the parties
thereto." It is clear from the foregoing that the
intention of the parties is to subject such amendment
to the conformity of both petitioner and respondent.
In the instant case, there is no showing that
respondent gave his acquiescence to the said
amendment or modification of the contract.
The situation is different with respect to the
payments of the increased rental fee made by
respondent beginning October 1994 because by then
the amendment to the contract was made in writing
through a bill sent by petitioner to respondent. The
fact that respondent subsequently settled the said bill
proves that it acceded to the increase in rental fee. The
same may not be said with respect to the questioned
rental fees sought to be recovered by petitioner
between September 1991 and September 1994 because
no bill was made and forwarded to respondent on the
basis of which it could have given or withheld its
conformity thereto.
It may not be amiss to point out that during
the abovementioned period, respondent continued to
pay and petitioner kept on receiving the original
rental fee of P6,580.00 without any reservations or
protests from the latter. Neither did petitioner
indicate in the official receipts it issued that the
payments made by respondent constitute only partial
fulfillment of the latter's obligations. Article 1235 of
the Civil Code clearly states that "[w]hen the obligee
accepts the performance knowing its incompleteness
or irregularity,and without expressing any protest or
objection, the obligation is deemed fully complied
with." For failing to make any protest or objection,
petitioner is already estopped from seeking recovery
of the amount claimed.
CECILLEVILLE REALTY AND SERVICE
CORPORATION vs. SPOUSES ACUA
Facts:
Sometime in September 1981, the defendants
[Acua spouses] requested the plaintiff [Cecilleville]
thru its President, Jose A. Resurreccion, to lend to
them for one (1) year, two (2) parcels of land owned
by the plaintiff as collaterals to secure a credit line
from the Prudential Bank and Trust Company
["Prudential"]. On September 21, 1981, thru a
secretary's certificate and by virtue of a board
resolution, the plaintiff lent to defendants the said
owner's copies of certificate of title. However, on
September 28, 1991, defendant Ofelia B. Acua forged
the signature of Lucia R. Reyes as corporate secretary.
By virtue of the fake secretary's certificate, the
defendants were able to obtain a personal loan from
"Prudential" in the sum of P610,000.00 with said
certificates as collaterals and upon signing a Real
Estate Mortgage dated September 30, 1981 and two
Promissory Notes dated October 7, 1981 and October
15, 1981.
The Acua spouses defaulted on their loan,
and Prudential initiated foreclosure proceedings.
Cecilleville tried to annul the real estate mortgage but
failed when the Court ruled that Cecilleville had
ratified the real estate mortgage. In effect, Cecilleville
became a third- party accommodation mortgagor.
Cecilleville paid Prudential in the amount of
P3,367,474.42. to avoid foreclosure of its mortgaged
properties. Cecilleville repeatedly asked the Acua
spouses to reimburse what it paid Prudential, but the
Acua spouses refused to do so.
Defendants insist that the action of the
plaintiff is based on fraud or forgery of a secretary's
certificate. The forgery allegedly happened on
September 28, 1981 or fifteen (15) years ago.
Therefore, the plaintiff should have brought the
instant action within the period provided for in Article
1146 of the Civil Code. Moreover, the defendants
argue that the plaintiff's inordinate delay in the filing
of the instant suit clearly shows that it has abandoned
its claim against the defendants and therefore guilty
of laches.
RTC in favor of spouses; CA reversed but in
MR once again favored the spouses. Hence, petition.
Issue: Is Cecilleville entitled to reimbursement?
Held: YES
From the facts above, we see that Cecilleville
paid the debt of the Acua spouses to Prudential as an
interested third party. The second paragraph of
Article 1236 of the Civil Code reads: Whoever pays for
another may demand from the debtor what he has
paid, except that if he paid without the knowledge or
against the will of the debtor, he can recover only
insofar as the payment has been beneficial to the
debtor.
Even if the Acua spouses insist that
Cecilleville's payment to Prudential was without their
knowledge or against their will, Article 1302 (3) of the
Civil Code states that Cecilleville still has a right to
reimbursement, thus: When, even without the
knowledge of the debtor, a person interested in the
fulfillment of the obligation pays, without prejudice to
the effects of confusion as to the latter's share.
Cecilleville clearly has an interest in the
fulfillment of the obligation because it owns the
properties mortgaged to secure the Acua spouses'
loan. When an interested party pays the obligation, he
is subrogated in the rights of the creditor. Because of
its payment of the Acua spouses' loan, Cecilleville
actually steps into the shoes of Prudential and
becomes entitled, not only to recover what it has paid,
but also to exercise all the rights which Prudential
could have exercised. There is, in such cases, not a
real extinguishment of the obligation, but a change in
the active subject.
Cecilleville's cause of action against the
Acua spouses is one created by law; hence, the action
prescribes in ten years. Prescription accrues from the
date of payment by Cecilleville to Prudential of the
Acua spouse's debt on 5 April 1994. Cecilleville's
present complaint against the Acua spouses was filed
on 20 June 1996, which was almost two months from
the extrajudicial demands to pay on 9 and 23 April
1996. Whether we use the date of payment, the date of
the last written demand for payment, or the date of
judicial demand, it is clear that Cecilleville's cause of
action has not yet prescribed.

SPOUSES DELA CRUZ vs. CONCEPCION
Facts:
Petitioners (as vendors) entered into a
Contract to Sell with respondent (as vendee) involving
a house and lot in Cypress St., Phase I, Town and
Country Executive Village, Antipolo City for a
consideration of P2M subject to the ff terms and
conditions:
a) That an earnest money of 100k shall be paid
immediately;
b) That a full down payment of 400k shall be paid on
February 29, 1996;
c) That 500k shall be paid on or before May 5, 1996;
d) That the balance of 1M shall be paid on installment
with interest of Eighteen Percent (18%) per annum
The interest shall continue to run until the whole
obligation shall have been fully paid within three
years from May 6, 1996;
e) That the agreed monthly amortization of 50k,
principal and interest included, must be paid to the
Vendors, without need of prior demand, on or before
May 6, 1996, and every month thereafter. Failure to
pay the monthly amortization on time, a penalty equal
To 5% of the amount due shall be imposed, until the
account is updated. In addition, a penalty of 100 per
day shall be imposed until the account is updated;
f) That after receipt of the full payment, the Vendors
shall execute the necessary Absolute Deed of Sale
covering the house and lot mentioned
Respondent made the following payments, to
wit: (1) P500k by way of downpayment; (2) P500k on
May 30, 1996; (3) P500k paid on January 22, 1997;
and (4) P500k bounced check dated June 30, 1997
which was subsequently replaced by another check of
the same amount, dated July 7, 1997. Respondent
was, therefore, able to pay a total of P2M.
Before respondent issued the P500k
replacement check, she told petitioners that based on
the computation of her accountant, her unpaid
obligation which includes interests and penalties was
only P200k. Petitioners agreed with respondent and
said "if P200,000.00 is the correct balance, it is okay
with us."
The title to the property was then transferred
to respondent. Petitioners later reminded respondent
to pay P209,000.00 within three months. They
claimed that the said amount remained unpaid,
despite the transfer of the title to the property to
respondent. Several months later, petitioners made
further demands stating the supposed correct
computation of respondent's liabilities. Despite
repeated demands, petitioners failed to collect the
amounts they claimed from respondent.
RTC and CA ruled in favor of respondent.
Petitioners denied payment of unpaid obligation and
questioned the authority of one Losloso whom the
payment was made.
Issue: Whether or not respondent's obligation had
already been extinguished by payment.
Held: YES
Respondent's obligation consists of payment
of a sum of money. In order to extinguish said
obligation, payment should be made to the proper
person as set forth in Article 1240 of the Civil Code, to
wit: Article 1240. Payment shall be made to the
person in whose favor the obligation has been
constituted, or his successor in interest, or any person
authorized to receive it.
The Court explained in Cambroon v. City of
Butuan, cited in Republic v. De Guzman, to whom
payment should be made in order to extinguish an
obligation: Payment made by the debtor to the person
of the creditor or to one authorized by him or by the
law to receive it extinguishes the obligation. When
payment is made to the wrong party, however, the
obligation is not extinguished as to the creditor who is
without fault or negligence even if the debtor acted in
utmost good faith and by mistake as to the person of
the creditor or through error induced by fraud of a
third person.
In general, a payment in order to be effective
to discharge an obligation, must be made to the
proper person. Thus, payment must be made to the
obligee himself or to an agent having authority,
express or implied, to receive the particular payment.
Payment made to one having apparent authority to
receive the money will, as a rule, be treated as though
actual authority had been given for its receipt.
Likewise, if payment is made to one who by law is
authorized to act for the creditor, it will work a
discharge. The receipt of money due on a judgment by
an officer authorized by law to accept it will, therefore,
satisfy the debt.
Admittedly, payment of the remaining
balance of P200,000.00 was not made to the
creditors themselves. Rather, it was allegedly made to
a certain Losloso. Respondent claims that Losloso was
the authorized agent of petitioners, but the latter
dispute it. Losloso's authority to receive payment was
embodied in petitioner's letter addressed to
respondent, where they informed respondent of the
amounts they advanced for the payment of the 1997
real estate taxes. In said letter, petitioners reminded
respondent of her remaining balance, together with
the amount of taxes paid.
 Taking into consideration the busy schedule
of respondent, petitioners advised the latter to leave
the payment to a certain "Dori" who admittedly is
Losloso, or to her trusted helper.
This is an express authority given to Losloso
to receive payment. Thus, as shown in the receipt
signed by petitioners agent and pursuant to the
authority granted by petitioners to Losloso, payment
made to the latter is deemed payment to petitioners.
We find no reason to depart from the RTC and the CA
conclusion that payment had already been made and
that it extinguished respondent's obligations.
TAN SHUY vs. SPOUSES MAULAWIN
Facts:
Tan Shuy is engaged in the business of
buying copra and corn in the. According to Vicente
Tan (Vicente), son of petitioner, whenever they would
buy copra or corn from crop sellers, they would
prepare and issue a pesada in their favor. A pesada is
a document containing details of the transaction,
including the date of sale, the weight of the crop
delivered, the trucking cost, and the net price of the
crop. He then explained that when a pesada contained
the annotation "pd" on the total amount of the
purchase price, it meant that the crop delivered had
already been paid for by petitioner.
Guillermo Maulawin (Guillermo),
respondent in this case, is a farmer-businessman
engaged in the buying and selling of copra and corn.
On 10 July 1997, Tan Shuy extended a loan
to Guillermo in the amount of P420k. In
consideration thereof, Guillermo obligated himself to
pay the loan and to sell copra to petitioner.
Most of the transactions involving Tan Shuy and
Guillermo were coursed through Elena Tan, daughter
of petitioner. She served as cashier in the business of
Tan Shuy, who primarily prepared and issued the
pesada. In case of her absence, Vicente would issue
the pesada. He also helped his father in buying copra
and granting loans to customers.
According to Vicente, part of their agreement
with Guillermo was that they would put the
annotation "sulong" on the pesada when partial
payment for the loan was made.
Petitioner alleged that despite repeated
demands, Guillermo remitted only P23,000 in August
1998 and P5,500 in October 1998, or a total of
P28,500. He claimed that respondent had an
outstanding balance of P391,500. Thus, convinced
that Guillermo no longer had the intention to pay the
loan, petitioner brought the controversy to the Lupon
Tagapamayapa. When no settlement was reached,
petitioner Gled a Complaint before the RTC.
Respondent Guillermo countered that he had
already paid the subject loan in full. According to him,
he continuously delivered and sold copra to petitioner
from April 1998 to April 1999. Respondent said they
had an oral arrangement that the net proceeds thereof
shall be applied as installment payments for the loan.
He alleged that his deliveries amounted to
P420,537.68 worth of copra. To bolster his claim, he
presented copies of pesadas issued by Elena and
Vicente. He pointed out that the pesadas did not
contain the notation "pd," which meant that actual
payment of the net proceeds from copra deliveries was
not given to him, but was instead applied as loan
payment. He averred that Tan Shuy filed a case
against him, because petitioner got mad at him for
selling copra to other copra buyers.
Issue: Was obligation paid thru the copras as stated in
pesadas?
Held: YES, but still with balance.
Petitioner is already estopped from
questioning the due execution and authenticity of the
pesadas. As found by the CA, Tan Shuy "could have
easily belied the existence of . . . the pesadas or
receipts, and the purposes for which they were offered
in evidence by simply presenting his daughter, Elena
Tan Shuy, but no effort to do so was actually done by
the former given that scenario." The pesadas having
been admitted in evidence, with petitioner failing to
timely object thereto, these documents are already
deemed sufficient proof of the facts contained therein.
18 We hereby uphold the factual findings of the RTC,
as affirmed by the CA, in that the pesadas served as
proof that the net proceeds from the copra deliveries
were used as installment payments for the debts of
respondents.
Indeed, pursuant to Article 1232 of the Civil
Code, an obligation is extinguished by payment or
performance. There is payment when there is delivery
of money or performance of an obligation. Article
1245 of the Civil Code provides for a special mode of
payment called dation in payment (dacin en pago).
There is dation in payment when property is alienated
to the creditor in satisfaction of a debt in money.
Here, the debtor delivers and transmits to the creditor
the former's ownership over a thing as an accepted
equivalent of the payment or performance of an
outstanding debt. In such cases, Article 1245 provides
that the law on sales shall apply, since the
undertaking really partakes in one sense of the
nature of sale; that is, the creditor is really buying the
thing or property of the debtor, the payment for which
is to be charged against the debtor's obligation.
 Dation in payment extinguishes the
obligation to the extent of the value of the thing
delivered, either as agreed upon by the parties or as
may be proved, unless the parties by agreement
express or implied, or by their silence consider the
thing as equivalent to the obligation, in which case the
obligation is totally extinguished.
The subsequent arrangement between Tan
Shuy and Guillermo can thus be considered as one in
the nature of dation in payment. There was partial
payment every time Guillermo delivered copra to
petitioner, chose not to collect the net proceeds of his
copra deliveries, and instead applied the collectible as
installment payments for his loan from Tan Shuy. We
therefore uphold the findings of the trial court, as
affirmed by the CA, that the net proceeds from
Guillermo's copra deliveries amounted to
P378,952.43. With this partial payment, respondent
remains liable for the balance totaling P41,047.57.
Facts:
Respondent Chona Losin (Losin) was in the
fastfood and catering services business named
Glamours Chicken House, with address at Parang
Road, Cotabato City. Since 1993, Vitarich,
particularly its Davao Branch, had been her supplier
of poultry meat. In 1995, however, her account was
transferred to the newly opened Vitarich branch in
General Santos City.
In the months of July to November 1996,
Losins orders of dressed chicken and other meat
products allegedly amounted to P921,083.10. During
this said period, Losins poultry meat needs for her
business were serviced by Rodrigo Directo (Directo)
and Allan Rosa (Rosa), both salesmen and authorized
collectors of Vitarich, and Arnold Baybay (Baybay), a
supervisor of said corporation. Unfortunately, it was
also during the same period that her account started
to experience problems because of the fact that
Directo delivered stocks to her even without prior
booking which is the customary process of doing
business with her.
On August 24, 1996, Directos services were
terminated by Vitarich without Losins knowledge. He
left without turning over some supporting invoices
covering the orders of Losin. Rosa and Baybay, on the
other hand, resigned on November 30, 1996 and
December 30, 1996, respectively. Just like Directo,
they did not also turn over pertinent invoices covering
Losins account.
On February 12, 1997, demand letters were
sent to Losin covering her alleged unpaid account
amounting to P921,083.10. Because of said demands,
she checked her records and discovered that she had
an overpayment to Vitarich in the amount of
P500,000.00. She relayed this fact to Vitarich and
further informed the latter that checks were issued
and the same were collected by Directo.
It appears that Losin had issued three (3)
checks amounting to P288,463.30 which were
dishonored either for reasons - Drawn Against
Insufficient Funds (DAIF) or Stop Payment.
On March 2, 1998, Vitarich filed a complaint
for Sum of Money against Losin, Directo, Rosa, and
Baybay before the RTC.
On August 9, 2001, the RTC rendered its
Decision in favor of Vitarich rendered in favor of
plaintiff, ordering defendant Chona Losin to pay
plaintiff the following:
1. P297,462.50 representing the three checks which
had been stopped payment with interest at 12% per
annum from the date of this Decision until the whole
amount is fully paid;
2. P101,450.20 representing the unpaid sales
(Exhibits L and M) with interest at 12% from date of
this Decision until the whole amount is fully paid;
3. P20,000.00 in concept of attorneys fees; and
4. The cost of suit.
As to the complaint against defendant Allan Rosa and
Arnold Baybay, the same is dismissed. The complaint
against Rodrigo Directo still remains and is hereby
ordered archived until he could be served with
summons.
Issue: Whether or not the respondent was being
violated her right by overpayment to the Vitarich?
Held: NO.
Records bear out that the Court already
resolved to deny with finality the Motion for
Reconsideration of Losin challenging the Court's
Decision dated November 15, 2010. The instant
Urgent Manifestation with a Dire Request to Take a
Very Close Look on the Fact That RCBC Check No.
CX046324 Dated August 27, 1996 in the Amount of
P93,888.80 Was Already Paid Way Back on August
29, 1996 appears to be a second motion for
reconsideration although not denominated as such by
Losin. Thus, it is essentially a prohibited pleading. It
has been settled that only for extraordinarily
persuasive reasons and only after an express leave has
been first obtained may a second motion for
reconsideration be entertained. The Court finds no
reason to depart from the general rule.
The Court already ruled that Losin was liable
to pay petitioner Vitarich Corporation the amount of
P93,888.80, as indicated in RCBC Check No.
CX046324 dated August 27, 1996, as part of her total
liability which had been stopped payment by Losin.
The attached bank statement marked as Exh.
"BB" and referred to by Losin bearing the amount of
P93,888.80 does not clearly prove payment of the
said amount. In fact, the entry in the said bank
statement with this amount has not been specifically
sub-marked at all. If indeed the questioned amount
was already paid by Losin, it could be threshed out in
the court of origin in connection with the execution of
the final judgment.
ROCKVILLE EXCEL INTERNATIONAL EXIM
CORPORATION, PETITIONER, VS. SPOUSES
OLIGARIO CULLA AND BERNARDITA MIRANDA,
RESPONDENTS
Facts:
The spouses Culla are the registered owners
of a parcel of land.They mortgaged this property to PS
Bank to secure a loan of P1,400,000.00. To prevent
the foreclosure, HUSBAND approached ROCKVILLE
for financial assistance. Rockville extended him total
loan amount of P2,000,000.00. When HUSBAND
failed to pay the loan after repeated demands and
promises to pay, he agreed to pay their indebtedness
by selling to ROCKVILLE another property the
spouses owned. The parties agreed to fix the purchase
price at P3,500,000.00 since a survey revealed that
the property is worth more than the P2,000,000.00
loan.
ROCKVILLE and HUSBAND executed a
Deed of Absolute Sale over the property with an
agreement that the former would pay the additional
P1,500,000.00 after WIFE affixes her signature to the
Deed of Absolute Sale since the land is a conjugal
property. ROCKVILLE filed a complaint for Specific
Performance and Damages when WIFE continued to
refuse to sign, insisting that the transaction was an
absolute sale by way of dacion en pago.
Issue: Whether the transaction entered by the parties
is therefore an absolute sale or an equitable mortgage.
Held:
The transaction between the parties was in
reality an equitable mortgage, not an absolute sale.
First, the SPOUSES retained possession of the
property. Second, ROCKVILLE kept a part of the
purchase price. Third, ROCKVILLE continued to give
the SPOUSES extensions on the period to repay their
loan even after the parties allegedly agreed to a
dacion en pago. Fourth, unequivocal testimonies of H
& W that the purpose of the Deed of Absolute Sale was
merely to guarantee their loan.
In determining the nature of a contract, courts are not
bound by the title or name given by the parties. The
decisive factor in evaluating an agreement is the
intention of the parties, as shown, not necessarily by
the terminology used in the contract but, by their
conduct, words, actions and deeds prior to, during
and immediately after executing the agreement. After
all an equitable mortgage has been defined as one
which although lacking in some formality, or form or
words, or other requisites demanded by a statute,
nevertheless reveals the intention of the parties to
charge real property as security for a debt, there being
no impossibility nor anything contrary to law in this
intent.
SPOUSES DEO AGNER and MARICON AGNER vs.
BPI FAMILY SAVINGS BANK, INC.
Facts:
On February 15, 2001, petitioners spouses
Deo Agner and Maricon Agner executed a Promissory
Note with Chattel Mortgage in favor of Citimotors,
Inc. The contract provides, among others, that: for
receiving the amount of Php834,768.00, petitioners
shall pay Php17,391.00 every 15th day of each
succeeding month until fully paid; the loan is secured
by a 2001 Mitsubishi Adventure Super Sport. On the
same day, Citimotors, Inc. assigned all its rights, title
and interests in the Promissory Note with Chattel
Mortgage to ABN AMRO Savings Bank, Inc. (ABN
AMRO), which, on May 31, 2002, likewise assigned
the same to respondent BPI Family Savings Bank, Inc.
For failure to pay four successive installments,
respondent, through counsel, sent to petitioners a
demand letter dated August 29, 2002, declaring the
entire obligation as due and demandable and
requiring to pay Php576,664.04, or surrender the
mortgaged vehicle immediately upon receiving the
letter. As the demand was left unheeded, respondent
filed on October 4, 2002 an action for Replevin and
Damages before the RTC.
A writ of replevin was issued. Despite this,
the subject vehicle was not seized. The Manila RTC
ruled for the respondent. Petitioners appealed the
decision to the Court of Appeals (CA), but the CA
affirmed the lower court's decision and, subsequently,
denied the motion for reconsideration; hence, this
petition.
Issue: Whether demand is necessary prior to the filing
of application for the writ of replevin.
Whether respondent's remedy of resorting to both
actions of replevin and collection of sum of money is
contrary to the provision of Article 1484 of the Civil
Code and the Elisco Tool Manufacturing Corporation
v. Court of Appeals ruling.
Held:
Records bear that both verbal and written
demands were in fact made by respondent prior to the
institution of the case against petitioners. Even
assuming, for argument's sake, that no demand letter
was sent by respondent, there is really no need for it
because petitioners legally waived the necessity of
notice or demand in the Promissory Note with Chattel
Mortgage, which they voluntarily and knowingly
signed in favor of respondent's predecessor-in-
interest.
Further, the Court even ruled in Navarro v.
Escobido that prior demand is not a condition
precedent to an action for a writ of replevin, since
there is nothing in Section 2, Rule 60 of the Rules of
Court that requires the applicant to make a demand
on the possessor of the property before an action for a
writ of replevin could be filed.
Also, there is no violation of Article 1484 of
the Civil Code and the Court's decision in Elisco Tool
Manufacturing Corporation v. Court of Appeals.
The remedies provided for in Art. 1484 are
alternative, not cumulative. The exercise of one bars
the exercise of the others. This limitation applies to
contracts purporting to be leases of personal property
with option to buy by virtue of Art. 1485.
Compared with Elisco, the vehicle subject
matter of this case was never recovered and delivered
to respondent despite the issuance of a writ of
replevin. As there was no seizure that transpired, it
cannot be said that petitioners were deprived of the
use and enjoyment of the mortgaged vehicle or that
respondent pursued, commenced or concluded its
actual foreclosure. The trial court, therefore, rightfully
granted the alternative prayer for sum of money,
which is equivalent to the remedy of "[e]xact[ing]
fulfillment of the obligation." Certainly, there is no
double recovery or unjust enrichment to speak of.