Facts:
CITIBANK, N.A. (FORMERLY FIRST NATIONAL CITY BANK) granted a loan evidenced by a
promissory note dated November 10, 1972 in the principal amount of P418,000.00 payable in sixty monthly installments of P8,722.25 with interest at twelve percent per annum and contractual acceleration and attorney's fees provisions, and obtained from
Douglas Anama a
Chattel Mortgage of machineries and equipment located at No. 1302 Epifanio delos Santos Avenue, Quezon City, which mortgage contained a stipulation appointing the bank as attorney-in-fact to enter the debtor's premises and to take possession of the chattels and to that effect to be entitled to a receiver without bond. After alleged default in payments beginning January 1974, petitioner filed on November 25, 1974 a verified complaint for collection, delivery and possession of the mortgaged chattels and preparatory foreclosure, docketed as Civil Case No. 95991 before the Court of First Instance of Manila; the trial court issued an Order of Replevin on December 2, 1974, but actual delivery was delayed pending settlement efforts, a pre-trial order of joint management was entered on March 24, 1975 and petitioner assumed receivership on April 1, 1975; when settlement failed petitioner moved on January 29, 1977 for an alias writ of seizure, respondent opposed on February 22, 1977 alleging among other defenses that the chattels were worth substantially more than the P200,000.00 stated by petitioner, that petitioner posted an inadequate replevin bond of P400,000.00, that petitioner was not in default and that the properties were fixtures or otherwise improperly replevied; the trial court granted the alias writ on February 28, 1977 and denied reconsideration on March 18, 1977, after which the sheriff seized, dismantled and removed the machineries on March 17–19, 1977 and advertised them for sale; private respondent filed a petition for certiorari with injunction in the
Court of Appeals on March 21, 1977; on July 30, 1982 the Court of Appeals granted the petition, holding that the trial court acted with grave abuse of discretion because of noncompliance with
Section 2, Rule 60 (absence of affidavit of merit), insufficiency of the replevin bond, and noncompliance with receiver requirements under
Section 5, Rule 59, and ordered the machineries returned and repairs made; petitioner invoked certiorari before the Supreme Court assigning errors attacking those conclusions.
Issues:
Did the Court of Appeals err in nullifying the trial court's writ of seizure and effectively rendering judgment on the merits by ordering the return of the machineries? Did petitioner comply with
Section 2, Rule 60 of the Revised Rules of Court requiring an affidavit of merit in a replevin action? Was the replevin bond posted by petitioner sufficient under
Section 2, Rule 60? Did petitioner comply with
Section 5, Rule 59 regarding the posting of a receiver's bond and the taking of an oath by the receiver? Did the trial court act with grave abuse of discretion in issuing the alias writ of seizure and in allowing petitioner to assume receivership?
Ruling:
Ratio:
Doctrine: