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PHILIPPINE JURISPRUDENCE - FULL TEXT

The Lawphil Project - Arellano Law Fon!ation


"#R# No# $%&&'( )cto*er %+ %&&$
RU,- L# TSAI ./# H)N# C)URT )F APPEALS+ ET AL#
Rep*lic o0 the Philippine/
SUPRE1E C)URT
1anila
FIRST DI2ISI)N
"#R# No# $%&&'( )cto*er %+ %&&$
RU,- L# TSAI+ petitioner+
./#
H)N# C)URT )F APPEALS+ E2ER TEXTILE 1ILLS+ INC# an! 1A1ERT) R
2ILLALU3+ re/pon!ent/#
4---------------------------------------------------------4
5"#R# No# $%&$&'# )cto*er %+ %&&$#6
PHILIPPINE ,AN7 )F C)11UNICATI)NS+ petitioner+
./#
H)N# C)URT )F APPEALS+ E2ER TEXTILE 1ILLS an! 1A1ERT) R
2ILLALU3+ re/pon!ent/#
8UISU1,IN"+ J#9
The/e con/oli!ate! ca/e/ a//ail the !eci/ion
$
o0 the Cort o0 Appeal/ in CA-"#R# C2 No#
:%'(;+ a00ir<in= the !eci/ion
%
o0 the Re=ional Trial Cort o0 1anila+ ,ranch >+ in Ci.il Ca/e No#
('-?(%;@# Al/o a//aile! i/ re/pon!ent cortA/ re/oltion !enBin= petitioner/A <otion 0or
recon/i!eration#
)n No.e<*er %;+ $'>@+ re/pon!ent E.er Te4tile 1ill/+ Inc# CE2ERTEXD o*taine! a three <illion
pe/o CP:+&&&+&&&#&&D loan 0ro< petitioner Philippine ,anE o0 Co<<nication/ CP,Co<D# A/
/ecritB 0or the loan+ E2ERTEX e4ecte! in 0a.or o0 P,Co<+ a !ee! o0 Real an! Chattel
1ort=a=e o.er the lot n!er TCT No# :>%&'>+ where it/ 0actorB /tan!/+ an! the chattel/ locate!
therein a/ en<erate! in a /che!le attache! to the <ort=a=e contract# The pertinent portion/
o0 the Real an! Chattel 1ort=a=e are Fote! *elow9
1)RT"A"E
CREAL AND CHATTELD
444 444 444
The 1)RT"A")RCSD here*B tran/0erC/D an! con.eBC/D+ *B waB o0 Fir/t 1ort=a=e+ to the
1)RT"A"EE+ # # # certain parcelC/D o0 lan!+ to=ether with all the *il!in=/ an!
i<pro.e<ent/ now e4i/tin= or which <aB herea0ter e4i/t thereon+ /itate! in # # #
GAnne4 AG
CReal an! Chattel 1ort=a=e e4ecte! *B E.er Te4tile 1ill/ in 0a.or o0
P,Co<<nication/ H contine!D
LIST )F 1ACHINERIES I E8UIP1ENT
A# FortB Ei=ht C?(D nit/ o0 2aBrow 7nittin= 1achine/-To<pEin/ <a!e in Hon=Eon=9
Serial N<*er/ SiJe o0 1achine/
444 444 444
,# Si4teen C$;D /et/ o0 2aBrow 7nittin= 1achine/ <a!e in Taiwan#
444 444 444
C# Two C%D Circlar 7nittin= 1achine/ <a!e in Ke/t "er<anB#
444 444 444
D# For C?D Kin!in= 1achine/#
444 444 444
SCHEDULE GAG
I# TCT L :>%&'> - RI3AL
444 444 444
II# AnB an! all *il!in=/ an! i<pro.e<ent/ now e4i/tin= or herea0ter to e4i/t on the
a*o.e-<entione! lot#
III# 1ACHINERIES I E8UIP1ENT /itate!+ locate! an!Mor in/talle! on the a*o.e-
<entione! lot locate! at # # #
CaD FortB ei=ht /et/ C?(D 2aBrow 7nittin= 1achine/ # # #
C*D Si4teen /et/ C$;D 2aBrow 7nittin= 1achine/ # # #
CcD Two C%D Circlar 7nittin= 1achine/ # # #
C!D Two C%D Kin!in= 1achine/ # # #
CeD Two C%D Kin!in= 1achine/ # # #
I2# AnB an! all replace<ent/+ /*/tittion/+ a!!ition/+ increa/e/ an! accretion/ to a*o.e
propertie/#
444 444 444
:
)n April %:+ $'>'+ P,Co< =rante! a /econ! loan o0 P:+:@;+&&&#&& to E2ERTEX# The loan wa/
/ecre! *B a Chattel 1ort=a=e o.er per/onal propertie/ en<erate! in a li/t attache! thereto#
The/e li/te! propertie/ were /i<ilar to tho/e li/te! in Anne4 A o0 the 0ir/t <ort=a=e !ee!#
A0ter April %:+ $'>'+ the !ate o0 the e4ection o0 the /econ! <ort=a=e <entione! a*o.e+
E2ERTEX prcha/e! .ario/ <achine/ an! eFip<ent/#
)n No.e<*er $'+ $'(%+ !e to */ine// re.er/e/+ E2ERTEX 0ile! in/ol.encB procee!in=/
!ocEete! a/ SP Proc# No# LP-:&'$-P *e0ore the !e0nct Cort o0 Fir/t In/tance o0 Pa/aB CitB+
,ranch XX2III# The CFI i//e! an or!er on No.e<*er %?+ $'(% !eclarin= the corporation
in/ol.ent# All it/ a//et/ were taEen into the c/to!B o0 the In/ol.encB Cort+ incl!in= the
collateral+ real an! per/onal+ /ecrin= the two <ort=a=e/ a/ a*o.e<entione!#
In the <eanti<e+ pon E2ERTEXA/ 0ailre to <eet it/ o*li=ation to P,Co<+ the latter
co<<ence! e4traj!icial 0oreclo/re procee!in=/ a=ain/t E2ERTEX n!er Act :$:@+ otherwi/e
Enown a/ GAn Act to Re=late the Sale o0 PropertB n!er Special Power/ In/erte! in or
Anne4e! to Real E/tate 1ort=a=e/G an! Act $@&; or GThe Chattel 1ort=a=e LawG# A Notice o0
Sheri00A/ Sale wa/ i//e! on Dece<*er $+ $'(%#
)n Dece<*er $@+ $'(%+ the 0ir/t p*lic action wa/ hel! where petitioner P,Co< e<er=e! a/
the hi=he/t *i!!er an! a Certi0icate o0 Sale wa/ i//e! in it/ 0a.or on the /a<e !ate# )n
Dece<*er %:+ $'(%+ another p*lic action wa/ hel! an! a=ain+ P,Co< wa/ the hi=he/t *i!!er#
The /heri00 i//e! a Certi0icate o0 Sale on the /a<e !aB#
)n 1arch >+ $'(?+ P,Co< con/oli!ate! it/ owner/hip o.er the lot an! all the propertie/ in it# In
No.e<*er $'(;+ it lea/e! the entire 0actorB pre<i/e/ to petitioner R*B L# T/ai 0or P@&+&&&#&& a
<onth# )n 1aB :+ $'((+ P,Co< /ol! the 0actorB+ locE+ /tocE an! *arrel to T/ai 0or
P'+&&&+&&&#&&+ incl!in= the conte/te! <achinerie/#
)n 1arch $;+ $'('+ E2ERTEX 0ile! a co<plaint 0or annl<ent o0 /ale+ recon.eBance+ an!
!a<a=e/ with the Re=ional Trial Cort a=ain/t P,Co<+ alle=in= inter alia that the e4traj!icial
0oreclo/re o0 /*ject <ort=a=e wa/ in .iolation o0 the In/ol.encB Law# E2ERTEX clai<e! that
no ri=ht/ ha.in= *een tran/<itte! to P,Co< o.er the a//et/ o0 in/ol.ent E2ERTEX+ there0ore
T/ai acFire! no ri=ht/ o.er /ch a//et/ /ol! to her+ an! /hol! recon.eB the a//et/#
Frther+ E2ERTEX a.erre! that P,Co<+ withot anB le=al or 0actal *a/i/+ appropriate! the
conte/te! propertie/+ which were not incl!e! in the Real an! Chattel 1ort=a=e o0 No.e<*er
%;+ $'>@ nor in the Chattel 1ort=a=e o0 April %:+ $'>'+ an! neither were tho/e propertie/
incl!e! in the Notice o0 Sheri00A/ Sale !ate! Dece<*er $+ $'(% an! Certi0icate o0 Sale # # #
!ate! Dece<*er $@+ $'(%#
The !i/pte! propertie/+ which were .ale! at P?+&&&+&&&#&&+ are9 $? InterlocE Circlar 7nittin=
1achine/+ $ Jet DrBin= EFip<ent+ $ DrBer EFip<ent+ $ Rai/in EFip<ent an! $ Heat/et
EFip<ent#
The RTC 0on! that the lea/e an! /ale o0 /ai! per/onal propertie/ were irre=lar an! ille=al
*eca/e theB were not !lB 0oreclo/e! nor /ol! at the Dece<*er $@+ $'(% action /ale /ince
the/e were not incl!e! in the /che!le/ attache! to the <ort=a=e contract/# The trial cort
!ecree!9
KHEREF)RE+ j!=<ent i/ here*B ren!ere! in 0a.or o0 plainti00 corporation an! a=ain/t
the !e0en!ant/9
$# )r!erin= the annl<ent o0 the /ale e4ecte! *B !e0en!ant Philippine ,anE o0
Co<<nication/ in 0a.or o0 !e0en!ant R*B L# T/ai on 1aB :+ $'(( in/o0ar a/ it a00ect/
the per/onal propertie/ li/te! in par# ' o0 the co<plaint+ an! their retrn to the plainti00
corporation thro=h it/ a//i=nee+ plainti00 1a<erto R# 2illalJ+ 0or !i/po/ition *B the
In/ol.encB Cort+ to *e !one within ten C$&D !aB/ 0ro< 0inalitB o0 thi/ !eci/ionN
%# )r!erin= the !e0en!ant/ to paB jointlB an! /e.erallB the plainti00 corporation the /< o0
P@+%&&+&&&#&& a/ co<pen/ation 0or the /e an! po//e//ion o0 the propertie/ in Fe/tion
0ro< No.e<*er $'(; to Fe*rarB $''$ an! P$&&+&&&#&& e.erB <onth therea0ter+ with
intere/t thereon at the le=al rate per ann< ntil 0ll paB<entN
:# )r!erin= the !e0en!ant/ to paB jointlB an! /e.erallB the plainti00 corporation the /< o0
P@&+&&&#&& a/ an! 0or attorneBA/ 0ee/ an! e4pen/e/ o0 liti=ationN
?# )r!erin= the !e0en!ant/ to paB jointlB an! /e.erallB the plainti00 corporation the /< o0
P%&&+&&&#&& *B waB o0 e4e<plarB !a<a=e/N
@# )r!erin= the !i/<i//al o0 the conterclai< o0 the !e0en!ant/N an!
;# )r!erin= the !e0en!ant/ to proportionatelB paB the co/t/ o0 /it#
S) )RDERED#
?
Di//ati/0ie!+ *oth P,Co< an! T/ai appeale! to the Cort o0 Appeal/+ which i//e! it/ !eci/ion
!ate! A=/t :$+ $''?+ the !i/po/iti.e portion o0 which rea!/9
KHEREF)RE+ e4cept 0or the !eletion there0ro< o0 the awar!N 0or e4e<plarB !a<a=e/+ an!
re!ction o0 the actal !a<a=e/+ 0ro< P$&&+&&&#&& to P%&+&&&#&& per <onth+ 0ro< No.e<*er
$'(; ntil /*ject per/onal propertie/ are re/tore! to appellee/+ the j!=<ent appeale! 0ro< i/
here*B AFFIR1ED+ in all other re/pect/# No prononce<ent a/ to co/t/#
@
1otion 0or recon/i!eration o0 the a*o.e !eci/ion ha.in= *een !enie! in the re/oltion o0 April
%(+ $''@+ P,Co< an! T/ai 0ile! their /eparate petition/ 0or re.iew with thi/ Cort#
In "#R No# $%&&'(+ petitioner T/ai a/cri*e! the 0ollowin= error/ to the re/pon!ent cort9
I
THE H)N)RA,LE C)URT )F APPEALS CSEC)ND DI2ISI)ND ERRED IN EFFECT
1A7IN" A C)NTRACT F)R THE PARTIES ,- TREATIN" THE $'($ AC8UIRED
1ACHINERIES AS CHATTELS INSTEAD )F REAL PR)PERTIES KITHIN THEIR
EARLIER $'>@ DEED )F REAL AND CHATTEL 1)RT"A"E )R $'>' DEED )F
CHATTEL 1)RT"A"E#
II
THE H)N)RA,LE C)URT )F APPEALS CSEC)ND DI2ISI)ND ERRED IN H)LDIN"
THAT THE DISPUTED $'($ 1ACHINERIES ARE N)T REAL PR)PERTIES DEE1ED
PART )F THE 1)RT"A"E H DESPITE THE CLEAR I1P)RT )F THE E2IDENCE
AND APPLICA,LE RULIN"S )F THE SUPRE1E C)URT#
III
THE H)N)RA,LE C)URT )F APPEALS CSEC)ND DI2ISI)ND ERRED IN DEE1IN"
PETITI)NER A PURCHASER IN ,AD FAITH#
I2
THE H)N)RA,LE C)URT )F APPEALS CSEC)ND DI2ISI)ND ERRED IN
ASSESSIN" PETITI)NER ACTUAL DA1A"ES+ ATT)RNE-AS FEES AND
EXPENSES )F LITI"ATI)N H F)R KANT )F 2ALID FACTUAL AND LE"AL ,ASIS#
2
THE H)N)RA,LE C)URT )F APPEALS CSEC)ND DI2ISI)ND ERRED IN H)LDIN"
A"AINST PETITI)NERAS AR"U1ENTS )N PRESCRIPTI)N AND LACHES#
;
In "#R# No# $%&&'(+ P,Co< rai/e! the 0ollowin= i//e/9
I#
DID THE C)URT )F APPEALS 2ALIDL- DECREE THE 1ACHINERIES LISTED UNDER
PARA"RAPH ' )F THE C)1PLAINT ,EL)K AS PERS)NAL PR)PERT- )UTSIDE )F
THE $'>@ DEED )F REAL ESTATE 1)RT"A"E AND EXCLUDED THE1 FR)1 THE REAL
PR)PERT- EXTRAJUDICIALL- F)RECL)SED ,- P,C)1 DESPITE THE PR)2ISI)N IN
THE $'>@ DEED THAT ALL AFTER-AC8UIRED PR)PERTIES DURIN" THE LIFETI1E )F
THE 1)RT"A"E SHALL F)R1 PART THERE)F+ AND DESPITE THE UNDISPUTED FACT
THAT SAID 1ACHINERIES ARE ,I" AND HEA2-+ ,)LTED )R CE1ENTED )N THE REAL
PR)PERT- 1)RT"A"ED ,- E2ER TEXTILE 1ILLS T) P,C)1+ AND KERE ASSESSED
F)R REAL ESTATE TAX PURP)SESO
II
CAN P,C)1+ KH) T))7 P)SSESSI)N )F THE 1ACHINERIES IN 8UESTI)N IN "))D
FAITH+ EXTENDED CREDIT FACILITIES T) E2ER TEXTILE 1ILLS KHICH AS )F $'(%
T)TALLED P'+@?>+&'@#%(+ KH) HAD SPENT F)R 1AINTENANCE AND SECURIT- )N
THE DISPUTED 1ACHINERIES AND HAD T) PA- ALL THE ,AC7 TAXES )F E2ER
TEXTILE 1ILLS ,E LE"ALL- C)1PELLED T) RETURN T) E2ER THE SAID
1ACHINERIES )R IN LIEU THERE)F ,E ASSESSED DA1A"ES# IS THAT SITUATI)N
TANTA1)UNT T) A CASE )F UNJUST ENRICH1ENTO
>
The principal i//e+ in or .iew+ i/ whether or not the incl/ion o0 the Fe/tione! propertie/ in
the 0oreclo/e! propertie/ i/ proper# The /econ!arB i//e i/ whether or not the /ale o0 the/e
propertie/ to petitioner R*B T/ai i/ .ali!#
For her part+ T/ai a.er/ that the Cort o0 Appeal/ in e00ect <a!e a contract 0or the partie/ *B
treatin= the $'($ acFire! nit/ o0 <achinerB a/ chattel/ in/tea! o0 real propertie/ within their
earlier $'>@ !ee! o0 Real an! Chattel 1ort=a=e or $'>' !ee! o0 Chattel
1ort=a=e#
(
A!!itionallB+ T/ai ar=e/ that re/pon!ent cort erre! in hol!in= that the !i/pte!
$'($ <achinerie/ are not real propertie/#
'
FinallB+ /he conten!/ that the Cort o0 Appeal/ erre!
in hol!in= a=ain/t petitionerA/ ar=<ent/ on pre/cription an! lache/
$&
an! in a//e//in= petitioner
actal !a<a=e/+ attorneBA/ 0ee/ an! e4pen/e/ o0 liti=ation+ 0or want o0 .ali! 0actal an! le=al
*a/i/#
$$
E//entiallB+ P,Co< conten!/ that re/pon!ent cort erre! in a00ir<in= the lower cortA/ j!=<ent
!ecreein= that the piece/ o0 <achinerB in !i/pte were not !lB 0oreclo/e! an! col! not *e
le=allB lea/e! nor /ol! to R*B T/ai# It 0rther ar=e! that the Cort o0 Appeal/A prononce<ent
that the piece/ o0 <achinerB in Fe/tion were per/onal propertie/ ha.e no 0actal an! le=al
*a/i/# FinallB+ it a//ert/ that the Cort o0 Appeal/ erre! in a//e//in= !a<a=e/ an! attorneBA/
0ee/ a=ain/t P,Co<#
In oppo/ition+ pri.ate re/pon!ent/ ar=e that the contro.erte! nit/ o0 <achinerB are not Greal
propertie/G *t chattel/+ an!+ there0ore+ theB were not part o0 the 0oreclo/e! real propertie/+
ren!erin= the lea/e an! the /*/eFent /ale thereo0 to T/ai a nllitB#
$%
Con/i!erin= the a//i=ne! error/ an! the ar=<ent/ o0 the partie/+ we 0in! the petition/ !e.oi! o0
<erit an! o=ht to *e !enie!#
Kell /ettle! i/ the rle that the jri/!iction o0 the Spre<e Cort in a petition 0or re.iew on
certiorari n!er Rle ?@ o0 the Re.i/e! Rle/ o0 Cort i/ li<ite! to re.iewin= onlB error/ o0 law+
not o0 0act+ nle// the 0actal 0in!in=/ co<plaine! o0 are !e.oi! o0 /pport *B the e.i!ence on
recor! or the a//aile! j!=<ent i/ *a/e! on <i/apprehen/ion o0 0act/#
$:
Thi/ rle i/ applie! <ore
/trin=entlB when the 0in!in=/ o0 0act o0 the RTC i/ a00ir<e! *B the Cort o0 Appeal/#
$?
The 0ollowin= are the 0act/ a/ 0on! *B the RTC an! a00ir<e! *B the Cort o0 Appeal/ that are
!eci/i.e o0 the i//e/9 C$D the Gcontro.erte! <achinerie/G are not co.ere! *B+ or incl!e! in+
either o0 the two <ort=a=e/+ the Real E/tate an! Chattel 1ort=a=e+ an! the pre Chattel
1ort=a=eN C%D the /ai! <achinerie/ were not incl!e! in the li/t o0 propertie/ appen!e! to the
Notice o0 Sale+ an! neither were theB incl!e! in the Sheri00A/ Notice o0 Sale o0 the 0oreclo/e!
propertie/#
$@
Petitioner/ conten! that the natre o0 the !i/pte! <achinerie/+ i.e#+ that theB were hea.B+
*olte! or ce<ente! on the real propertB <ort=a=e! *B E2ERTEX to P,Co<+ <aEe the< ipso
facto i<<o.a*le n!er Article ?$@ C:D an! C@D o0 the New Ci.il Co!e# Thi/ a//ertion+ howe.er+
!oe/ not /ettle the i//e# 1ere nt/ an! *olt/ !o not 0oreclo/e the contro.er/B# Ke ha.e to looE
at the partie/A intent#
Khile it i/ tre that the contro.erte! propertie/ appear to *e i<<o*ile+ a per/al o0 the contract
o0 Real an! Chattel 1ort=a=e e4ecte! *B the partie/ herein =i.e/ / a contrarB in!ication# In
the ca/e at *ar+ *oth the trial an! the appellate cort/ reache! the /a<e 0in!in= that the tre
intention o0 P,C)1 an! the owner+ E2ERTEX+ i/ to treat <achinerB an! eFip<ent a/ chattel/#
The pertinent portion o0 re/pon!ent appellate cortA/ rlin= i/ Fote! *elow9
A/ /tre//e! pon *B appellee/+ appellant *anE treate! the <achinerie/ a/ chattel/N
ne.er a/ real propertie/# In!ee!+ the $'>@ <ort=a=e contract+ which wa/ actallB real
an! chattel <ort=a=e+ <ilitate/ a=ain/t appellant/A po/tre# It should be noted that the
printed form used by appellant bank was mainly for real estate mortgages. But reflective
of the true intention of appellant PBCOM and appellee !"#$ was the typing in
capital letters% immediately following the printed caption of mortgage% of the phrase &real
and chattel#G So al/o+ the G<achinerie/ an! eFip<entG in the printe! 0or< o0 the *anE
ha! to *e in/erte! in the *lanE /pace o0 the printe! contract an! connecte! with the wor!
G*il!in=G *B tBpewritten /la/h <arE/# Now+ then+ i0 the <achinerie/ in Fe/tion were
conte<plate! to *e incl!e! in the real e/tate <ort=a=e+ there wol! ha.e *een no
nece//itB to inE a chattel <ort=a=e /peci0icallB <entionin= a/ part III o0 Sche!le A a
li/tin= o0 the <achinerie/ co.ere! there*B# It wol! ha.e /00ice! to li/t the< a/
i<<o.a*le/ in the Dee! o0 Real E/tate 1ort=a=e o0 the lan! an! *il!in= in.ol.e!#
A/ re=ar!/ the $'>' contract+ the intention o0 the partie/ i/ clear an! *eBon! Fe/tion# It
re0er/ /olelB to chattels# The in.entorB li/t o0 the <ort=a=e! propertie/ i/ an ite<iJation
o0 /i4tB-three C;:D in!i.i!allB !e/cri*e! <achinerie/ while the /che!le li/te! onlB
<achine/ an! %+'';+((&#@& worth o0 0ini/he! cotton 0a*ric/ an! natral cotton 0a*ric/#
$;
In the a*/ence o0 anB /howin= that thi/ concl/ion i/ *a/ele//+ erroneo/ or ncorro*orate! *B
the e.i!ence on recor!+ we 0in! no co<pellin= rea/on to !epart there0ro<#
Too+ a//<in= arguendo that the propertie/ in Fe/tion are i<<o.a*le *B natre+ nothin=
!etract/ the partie/ 0ro< treatin= it a/ chattel/ to /ecre an o*li=ation n!er the principle o0
e/toppel# A/ 0ar *acE a/ 'avarro v. Pineda+ ' SCRA ;:$ C$';:D+ an i<<o.a*le <aB *e
con/i!ere! a per/onal propertB i0 there i/ a /tiplation a/ when it i/ /e! a/ /ecritB in the
paB<ent o0 an o*li=ation where a chattel <ort=a=e i/ e4ecte! o.er it+ a/ in the ca/e at *ar#
In the in/tant ca/e+ the partie/ herein9 C$D e4ecte! a contract /tBle! a/ GReal E/tate 1ort=a=e
an! Chattel 1ort=a=e+G in/tea! o0 j/t GReal E/tate 1ort=a=eG i0 in!ee! their intention i/ to treat
all propertie/ incl!e! therein a/ i<<o.a*le+ an! C%D attache! to the /ai! contract a /eparate
GLIST )F 1ACHINERIES I E8UIP1ENTG# The/e 0act/+ taEen to=ether+ e.ince the concl/ion
that the partie/A intention i/ to treat the/e nit/ o0 <achinerB a/ chattel/# A fortiori+ the conte/te!
a0ter-acFire! propertie/+ which are o0 the /a<e !e/cription a/ the nit/ en<erate! n!er the
title GLIST )F 1ACHINERIES I E8UIP1ENT+G </t al/o *e treate! a/ chattel/#
Accor!in=lB+ we 0in! no re.er/i*le error in the re/pon!ent appellate cortA/ rlin= that ina/<ch
a/ the /*ject <ort=a=e/ were inten!e! *B the partie/ to in.ol.e chattel/+ in/o0ar a/ eFip<ent
an! <achinerB were concerne!+ the Chattel 1ort=a=e Law applie/+ which pro.i!e/ in Section >
thereo0 that9 Ga chattel <ort=a=e /hall *e !ee<e! to co.er only the property described therein
and not like or substituted property thereafter ac(uired by the mortgagor and placed in the same
depository as the property originally mortgaged+ anBthin= in the <ort=a=e to the contrarB
notwith/tan!in=#G
An!+ /ince the !i/pte! <achinerie/ were acFire! in $'($ an! col! not ha.e *een in.ol.e! in
the $'>@ or $'>' chattel <ort=a=e/+ it wa/ con/eFentlB an error on the part o0 the Sheri00 to
incl!e /*ject <achinerie/ with the propertie/ en<erate! in /ai! chattel <ort=a=e/#
A/ the action /ale o0 the /*ject propertie/ to P,Co< i/ .oi!+ no .ali! title pa//e! in it/ 0a.or#
Con/eFentlB+ the /ale thereo0 to T/ai i/ al/o a nllitB n!er the ele<entarB principle o0 nemo
dat (uod non habet+ one cannot =i.e what one !oe/ not ha.e#
$>
Petitioner T/ai al/o ar=e! that a//<in= that P,Co<A/ title o.er the conte/te! propertie/ i/ a
nllitB+ /he i/ ne.erthele// a prcha/er in =oo! 0aith an! 0or .ale who now ha/ a *etter ri=ht
than E2ERTEX#
To the contrarB+ howe.er+ are the 0actal 0in!in=/ an! concl/ion/ o0 the trial cort that /he i/
not a prcha/er in =oo! 0aith# Kell-/ettle! i/ the rle that the per/on who a//ert/ the /tat/ o0 a
prcha/er in =oo! 0aith an! 0or .ale ha/ the *r!en o0 pro.in= /ch a//ertion#
$(
Petitioner T/ai
0aile! to !i/char=e thi/ *r!en per/a/i.elB#
1oreo.er+ a prcha/er in =oo! 0aith an! 0or .ale i/ one who *B/ the propertB o0
another without notice that some other person has a right to or interest in such property an!
paB/ a 0ll an! 0air price 0or the /a<e+ at the ti<e o0 prcha/e+ or *e0ore he ha/ notice o0 the
clai</ or intere/t o0 /o<e other per/on in the propertB#
$'
Recor!/ re.eal+ howe.er+ that when
T/ai prcha/e! the contro.erte! propertie/+ /he Enew o0 re/pon!entA/ clai< thereon# A/ *orne
ot *B the recor!/+ /he recei.e! the letter o0 re/pon!entA/ con/el+ appri/in= her o0
re/pon!entA/ clai<+ !ate! Fe*rarB %>+ $'(>#
%&
She replie! thereto on 1arch '+ $'(>#
%$
De/pite
her Enowle!=e o0 re/pon!entA/ clai<+ /he procee!e! to *B the conte/te! nit/ o0 <achinerB on
1aB :+ $'((# Th/+ the RTC !i! not err in 0in!in= that /he wa/ not a prcha/er in =oo! 0aith#
Petitioner T/aiA/ !e0en/e o0 in!e0ea/i*ilitB o0 Torren/ Title o0 the lot where the !i/pte!
propertie/ are locate! i/ eFallB na.ailin=# Thi/ !e0en/e re0er/ to /ale o0 lan!/ an! not to /ale
o0 propertie/ /itate! therein# LiEewi/e+ the <ere 0act that the lot where the 0actorB an! the
!i/pte! propertie/ /tan! i/ in P,Co<A/ na<e !oe/ not ato<aticallB <aEe P,Co< the owner
o0 e.erBthin= 0on! therein+ e/peciallB in .iew o0 E2ERTEXA/ letter to T/ai ennciatin= it/ clai<#
FinallB+ petitioner/A !e0en/e o0 pre/cription an! lache/ i/ le// than con.incin=# Ke 0in! no
co=ent rea/on to !i/tr* the con/i/tent 0in!in=/ o0 *oth cort/ *elow that the ca/e 0or the
recon.eBance o0 the !i/pte! propertie/ wa/ 0ile! within the re=le<entarB perio!# Here+ in or
.iew+ the !octrine o0 lache/ !oe/ not applB# Note that pon petitioner/A a!a<ant re0/al to hee!
E2ERTEXA/ clai<+ re/pon!ent co<panB i<<e!iatelB 0ile! an action to reco.er po//e//ion an!
owner/hip o0 the !i/pte! propertie/# There i/ no e.i!ence /howin= anB 0ailre or ne=lect on it/
part+ 0or an nrea/ona*le an! ne4plaine! len=th o0 ti<e+ to !o that which+ *B e4erci/in= !e
!ili=ence+ col! or /hol! ha.e *een !one earlier# The !octrine o0 /tale !e<an!/ wol! applB
onlB where *B rea/on o0 the lap/e o0 ti<e+ it wol! *e ineFita*le to allow a partB to en0orce hi/
le=al ri=ht/# 1oreo.er+ e4cept 0or .erB /tron= rea/on/+ thi/ Cort i/ not !i/po/e! to applB the
!octrine o0 lache/ to prej!ice or !e0eat the ri=ht/ o0 an owner#
%%
A/ to the awar! o0 !a<a=e/+ the conte/te! !a<a=e/ are the actal co<pen/ation+ repre/entin=
rental/ 0or the conte/te! nit/ o0 <achinerB+ the e4e<plarB !a<a=e/+ an! attorneBA/ 0ee/#
A/ re=ar!/ /ai! actal co<pen/ation+ the RTC awar!e! P$&&+&&&#&& corre/pon!in= to the
npai! rental/ o0 the conte/te! propertie/ *a/e! on the te/ti<onB o0 John Cha+ who te/ti0ie!
that the P$&&+&&&#&& wa/ *a/e! on the accepte! practice in *anEin= an! 0inance+ */ine// an!
in.e/t<ent/ that the rental price </t taEe into accont the co/t o0 <oneB /e! to *B the<#
The Cort o0 Appeal/ !i! not =i.e 0ll cre!ence to ChaA/ projection an! re!ce! the awar! to
P%&+&&&#&&#
,a/ic i/ the rle that to reco.er actal !a<a=e/+ the a<ont o0 lo// </t not onlB *e capa*le o0
proo0 *t </t actallB *e pro.en with rea/ona*le !e=ree o0 certaintB+ pre<i/e! pon
co<petent proo0 or *e/t e.i!ence o*taina*le o0 the actal a<ont thereo0#
%:
Howe.er+ the
alle=ation/ o0 re/pon!ent co<panB a/ to the a<ont o0 nrealiJe! rental/ !e the< a/ actal
!a<a=e/ re<ain <ere a//ertion/ n/pporte! *B !oc<ent/ an! other co<petent e.i!ence# In
!eter<inin= actal !a<a=e/+ the cort cannot relB on <ere a//ertion/+ /peclation/+
conjectre/ or =e//worE *t </t !epen! on co<petent proo0 an! on the *e/t e.i!ence
o*taina*le re=ar!in= the actal a<ont o0 lo//#
%?
Howe.er+ we are not prepare! to !i/re=ar! the
0ollowin= !i/po/ition/ o0 the re/pon!ent appellate cort9
# # # In the awar! o0 actal !a<a=e/ n!er /crtinB+ there i/ nothin= on recor! warrantin=
the /ai! awar! o0 P@+%&&+&&&#&&+ repre/entin= <onthlB rental inco<e o0 P$&&+&&&#&&
0ro< No.e<*er $'(; to Fe*rarB $''$+ an! the a!!itional awar! o0 P$&&+&&&#&& per
<onth therea0ter#
A/ pointe! ot *B appellant/+ the te/ti<onial e.i!ence+ con/i/tin= o0 the te/ti<onie/ o0
Jonh C/icD Cha an! 1a<erto 2illalJ+ i/ /hB o0 what i/ nece//arB to /*/tantiate the
actal !a<a=e/ alle=e!lB //taine! *B appellee/+ *B waB o0 nrealiJe! rental inco<e o0
/*ject <achinerie/ an! eFip<ent/#
The te/ti<onB o0 John Ca C/icD i/ nothin= *t an opinion or projection *a/e! on what i/
clai<e! to *e a practice in */ine// an! in!/trB# ,t /ch a te/ti<onB cannot /er.e a/
the /ole *a/i/ 0or a//e//in= the actal !a<a=e/ co<plaine! o0# Khat i/ <ore+ there i/
no /howin= that ha! appellant T/ai not taEen po//e//ion o0 the <achinerie/ an!
eFip<ent/ in Fe/tion+ /o<e*o!B wa/ willin= an! rea!B to rent the /a<e 0or
P$&&+&&&#&& a <onth#
444 444 444
Then+ too+ e.en a//<in= arguendo that the /ai! <achinerie/ an! eFip<ent/ col!
ha.e =enerate! a rental inco<e o0 P:&+&&&#&& a <onth+ a/ projecte! *B witne//
1a<erto 2illalJ+ the /a<e wol! ha.e *een a =ro// inco<e# There0ro< /hol! *e
!e!cte! or re<o.e!+ e4pen/e/ 0or <aintenance an! repair/ # # # There0ore+ in the
!eter<ination o0 the actal !a<a=e/ or nrealiJe! rental inco<e /e! pon+ there i/ a
=oo! *a/i/ to calclate that at lea/t 0or <onth/ in a Bear+ the <achinerie/ in !i/pte
wol! ha.e *een i!le !e to a*/ence o0 a le//ee or while *ein= repaire!# In the li=ht o0
the 0ore=oin= rationaliJation an! co<ptation+ Ke *elie.e that a net nrealiJe! rental
inco<e o0 P%&+&&&#&& a <onth+ /ince No.e<*er $'(;+ i/ <ore reali/tic an! 0air#
%@
A/ to e4e<plarB !a<a=e/+ the RTC awar!e! P%&&+&&&#&& to E2ERTEX which the Cort o0
Appeal/ !elete!# ,t accor!in= to the CA+ there wa/ no clear /howin= that petitioner/ acte!
<ale.olentlB+ wantonlB an! oppre//i.elB# The e.i!ence+ howe.er+ /how/ otherwi/e#It i/ a
reFi/ite to awar! e4e<plarB !a<a=e/ that the wron=0l act </t *e acco<panie! *B *a!
0aith+
%;
an! the =iltB acte! in a wanton+ 0ra!lent+ oppre//i.e+ recEle// or <ale.olent
<anner#
%>
A/ pre.io/lB /tre//e!+ petitioner T/aiA/ act o0 prcha/in= the contro.erte! propertie/
!e/pite her Enowle!=e o0 E2ERTEXA/ clai< wa/ oppre//i.e an! /*jecte! the alrea!B in/ol.ent
re/pon!ent to =ro// !i/a!.anta=e# Petitioner P,Co< al/o recei.e! the /a<e letter/ o0 AttB#
2illalJ+ re/pon!in= thereto on 1arch %?+ $'(>#
%(
Th/+ P,Co<A/ act o0 taEin= all the propertie/
0on! in the 0actorB o0 the 0inanciallB han!icappe! re/pon!ent+ incl!in= tho/e propertie/ not
co.ere! *B or incl!e! in the <ort=a=e/+ i/ eFallB oppre//i.e an! tainte! with *a! 0aith# Th/+
we are in a=ree<ent with the RTC that an awar! o0 e4e<plarB !a<a=e/ i/ proper#
The a<ont o0 P%&&+&&&#&& 0or e4e<plarB !a<a=e/ i/+ howe.er+ e4ce//i.e# Article %%$; o0 the
Ci.il Co!e pro.i!e/ that no proo0 o0 pecniarB lo// i/ nece//arB 0or the a!j!ication o0
e4e<plarB !a<a=e/+ their a//e//<ent *ein= le0t to the !i/cretion o0 the cort in accor!ance
with the circ</tance/ o0 each ca/e#
%'
Khile the i<po/ition o0 e4e<plarB !a<a=e/ i/ j/ti0ie! in
thi/ ca/e+ eFitB call/ 0or it/ re!ction# In Inhelder Corporation v. Court of )ppeals+ "#R# No# L-
@%:@(+ $%% SCRA @>;+ @(@+ C1aB :&+ $'(:D+ we lai! !own the rle that j!icial !i/cretion
=rante! to the cort/ in the a//e//<ent o0 !a<a=e/ </t alwaB/ *e e4erci/e! with *alance!
re/traint an! <ea/re! o*jecti.itB# Th/+ here the awar! o0 e4e<plarB !a<a=e/ *B waB o0
e4a<ple 0or the p*lic =oo! /hol! *e re!ce! to P$&&+&&&#&&#
,B the /a<e toEen+ attorneBA/ 0ee/ an! other e4pen/e/ o0 liti=ation <aB *e reco.ere! when
e4e<plarB !a<a=e/ are awar!e!#
:&
In or .iew+ RTCA/ awar! o0 P@&+&&&#&& a/ attorneBA/ 0ee/
an! e4pen/e/ o0 liti=ation i/ rea/ona*le+ =i.en the circ</tance/ in the/e ca/e/#
KHEREF)RE+ the petition/ are DENIED# The a//aile! !eci/ion an! re/oltion o0 the Cort o0
Appeal/ in CA-"#R# C2 No# :%'(; are AFFIR1ED KITH 1)DIFICATI)NS# Petitioner/
Philippine ,anE o0 Co<<nication/ an! R*B L# T/ai are here*B or!ere! to paB jointlB an!
/e.erallB E.er Te4tile 1ill/+ Inc# the 0ollowin=9 C$D P%&+&&&#&& per <onth+ a/ co<pen/ation 0or
the /e an! po//e//ion o0 the propertie/ in Fe/tion 0ro< No.e<*er $'(;
:$
ntil /*ject
per/onal propertie/ are re/tore! to re/pon!ent corporationN C%D P$&&+&&&#&& *B waB o0
e4e<plarB !a<a=e/+ an! C:D P@&+&&&#&& a/ attorneBA/ 0ee/ an! liti=ation e4pen/e/# Co/t/
a=ain/t petitioner/#
S) )RDERED#
Bellosillo% Mendo*a% Buena and +e ,eon% Jr.% JJ.% concr#
Footnote/
$
Rollo+ "#R# No# $%&&'(+ pp# %:-?@#
%
Id# at %:-%?#
:
Fol!er o0 E4hi*it/+ pp# @-$%#
?
Rollo+ "#R# No# $%&&'(+ pp# %:-%?#
@
Id# at ?@#
;
Rollo+ "#R# No# $%&&'(+ pp# %:-%@#
>
Rollo+ "#R# No# $%&&'(+ pp# '-$&#
(
Rollo+ "#R# No# $%&&'(+ p# %@#
'
Id#+ at ::#
$&
Id#+ at ?'#
$$
Id#+ at ??#
$%
Id#+ at $::#
$:
Con=re=ation o0 the Reli=io/ o0 the 2ir=in 1arB .# Cort o0 Appeal/+ %'$ SCRA :(@+
:'$-:'% C$''(D#
$?
1anlapaJ# Cort o0 Appeal/+ $?> SCRA %:;+ %:' C$'(>D#
$@
Rollo+ "#R No# $%&$&'+ pp# ;%-;:#
$;
Rollo+ "#R# No# $%&&'(+ pp# ;(-;'#
$>
-egura vs. -egura+ $;@ SCRA :;(+:>@ C$'((DN 'oel vs. Court of )ppeals+ "#R# No#
@'@@&+ %?& SCRA >(+(( C$''@D#
$(
Mathay v. Court of )ppeals+ %'@ SCRA @@;+ @>@ C$''(D#
$'
+ia*.+uarte vs. Ong+ %'( SCRA :((+ :'> C$''(D#
%&
E4hi*it GUG+ Fol!er o0 E4hi*it/+ p#;?#
%$
E4hi*it G2G+ I!#+ at ;;#
%%
'oel vs. Court of )ppeals+ %?& SCRA >(+'& C$''@D#
%:
)ce /ailers Corporation v. C)% et al.% "#R No# $%>':?+ A=/t %:+ %&&&+ p# $$#
%?
Bar*aga vs. Court of )ppeals+ %;( SCRA $&@+ $$:-$$? C$''>D#
%@
Rollo "#R# No# $%&$&'+ pp# ?:-??#
%;
&J& Marketing Corp. vs. -ia% Jr.% %(@ SCRA @(&+ @(:-@(? C$''(D#
%>
Cervantes vs. Court of )ppeals+ :&? SCRA %@+ :: C$''>D#
%(
E4hi*it GXG+ Fol!er o0 E4hi*it/+ p# ;'#
%'
Art# %%$;# Ci.il Co!e# H No proo0 o0 pecniarB lo// i/ nece//arB in or!er that <oral+
no<inal+ te<perate liFi!ate! or e4e<plarB !a<a=e/ <aB *e a!j!icate!# The
a//e//<ent o0 /ch !a<a=e/+ e4cept liFi!ate! one/+ i/ le0t to the !i/cretion o0 the
cort+ accor!in= to the circ</tance/ o0 each ca/e#
:&
!ital.0o*on v. Court of )ppeals+ %'% SCRA $%?+ $?> C$''(D#
:$
The ti<e when P,Co< lea/e! the !i/pte! propertie/ to T/ai# CA Rollo+ p# :?#
The Lawphil Project - Arellano Law Fon!ation