April Mae Baquirquir-Diesmo
Advent Capital and Finance Corporation, Petitioner,
v.
Roland Young, Respondent
G.R. No. 183018, August 3, 2011
Doctrine
The application of replevin under Rule 60 of the Rules of Court presupposes
the existence of a principal action that prays for the recovery of possession of
personal property that may, at the commencement of the action or at any time
before answer, apply for an order for the delivery of such property to him, in the
manner provided under Rule 60.
Upon the dismissal of the replevin case for failure to prosecute, the writ of
seizure, which is merely ancillary, became functus officio and should have been
lifted.
Facts
The present case involves a replevin suit filed by Advent Capital and
Finance Corporation (Advent) against Roland Young (Young) to recover a 1996
Mercedes Benz E230 registered in Advent’s name. Advent had previously sought
corporate rehabilitation with the Regional Trial Court of Makati City, which issued
a stay order on August 27, 2001, halting all claims against Advent. On November
5, 2001, Young, Advent's former president and CEO, responded to the
rehabilitation petition, claiming several employee benefits. The rehabilitation plan,
approved on November 6, 2002, included the disputed car, which remained with
Young.
Due to Young's refusal to return the car despite repeated demands, Advent
filed a replevin suit on July 8, 2003, resulting in the Regional Trial Court issuing a
Writ of Seizure after Advent posted a ₱3,000,000 bond. Young complied and the
car was handed over to the rehabilitation receiver. In his defense, Young claimed
his right to purchase the car at book value and offset it against his retirement pay
and stock option plan proceeds, seeking a deed of sale for the car and
determination of his net retirement benefits.
Issue
Whether the Court of Appeals erred in its judgment by (1) ordering the
return of the seized vehicle to Young and (2) instructing the trial court to schedule
a hearing to determine the damages payable under the replevin bond.
Ruling
The petition is partially meritorious.
On the Return of the Seized Vehicle to Young:
The Supreme Court concurs with the Court of Appeals in directing the trial
court to return the seized vehicle to Young, as this is the necessary consequence of
the dismissal of the replevin case for failure to prosecute without prejudice. Upon
dismissal of the replevin case, the writ of seizure, being merely ancillary, became
functus officio and should have been lifted. There was no adjudication on the
merits, meaning no determination was made regarding who had the better right to
possess the vehicle. Consequently, Advent cannot retain possession of the vehicle,
as it was not adjudged the prevailing party entitled to the remedy of replevin.
Contrary to Advent’s view, Olympia International Inc. v. Court of Appeals
applies to this case. The dismissal of the replevin case for failure to prosecute
necessitates the restoration of the parties to their pre-litigation status as if no
complaint had been filed. Allowing the writ of seizure to stand post-dismissal
would effectively deem Advent the prevailing party, despite no decision on the
merits having been made. Accordingly, the parties must revert to their status quo
ante. Since Young possessed the vehicle before the filing of the replevin case, it
must be returned to him, as if no complaint had been filed.
WHEREFORE, the Court GRANTS the petition IN PART. The Court SETS
ASIDE the portion in the assailed decision of the Court of Appeals in CA-G.R. SP
No. 96266 ordering the trial court to set a hearing for the determination of damages
against the replevin bond.
