Case Summary (G.R. No. 131283)
Petitioner’s Position
Petitioners challenged the issuance and enforcement of the writ of replevin and the subsequent denial of their motion for redelivery and motion to dismiss for lack of jurisdiction and improper venue. They asserted (a) the MTC of Pasay could not validly enforce the writ outside Pasay City pursuant to BP 129 Sec. 28; (b) the MTC lacked jurisdiction because the value of the chattel exceeded the court’s monetary limit; (c) they complied with redelivery requirements by tendering payment (a manager’s check for P69,168) within five days of seizure; and (d) certain respondent memoranda were procedurally defective.
Respondent’s Position
Respondent bank filed a complaint for collection with replevin claiming P190,635.90, sought a writ of replevin, and caused the vehicle to be seized. Respondents maintained that (a) the basic claim sought fell within the monetary jurisdiction of the MTC; (b) the writ of replevin could be validly executed beyond the territorial confines of Pasay under applicable interim rules implementing BP 129; and (c) petitioners failed to comply with Rule 60 requirements for redelivery bonds.
Key Dates and Procedural History
- Purchase of vehicle: on or about October 26, 1993; chattel mortgage executed November 10, 1993.
- Complaint with prayer for writ of replevin filed November 28, 1996 (Case No. 983-96 before MTC Branch 44, Pasay).
- Sheriff’s seizure: January 7, 1997. Petitioners’ Answer filed January 9, 1997 (raising venue and jurisdiction defenses).
- MTC denied motions on February 10, 1997; Motion for Reconsideration denied May 9, 1997.
- Court of Appeals decision dismissing petition for certiorari and prohibition: September 4, 1997; denial of reconsideration: November 14, 1997.
- Supreme Court disposition: petition for review on certiorari resolved (case submitted August 16, 1999; decision rendered October 7, 1999).
Applicable Law and Authorities
Constitutional basis: 1987 Philippine Constitution (applicable because decision date is after 1990). Statutory and reglementary sources: B.P. 129 (Metropolitan Trial Courts), Interim Rules for implementation of BP 129 (Supreme Court Resolution dated January 11, 1983), Rules of Court (pre-1997 provisions on venue and Rule 60 provisions on replevin/redelivery), Chattel Mortgage Law (Section 14 on disposition of proceeds). Relevant jurisprudence cited: Malaloan v. Court of Appeals (232 SCRA 249) and Diaz v. Adiong (219 SCRA 631).
Facts Established by the Record
Petitioners financed the vehicle, agreeing to pay a total of P553,944.00 over 48 months with an initial cash price and downpayment leaving a financed amount reflected in the disclosure statement. At the time of seizure petitioners had nearly completed payments; mileage was low. Petitioners assert attempts to pay installments and tendered a manager’s check of P69,168 for advance installments and redelivery, but the MTC and later courts denied redelivery and dismissed their motions to dismiss for lack of jurisdiction or improper venue.
Issues Presented to the Supreme Court
- Whether a writ of replevin issued by the MTC of Pasay City may be enforced outside the city.
- Whether the MTC had subject-matter jurisdiction over the complaint given the value of the chattel seized.
- Whether petitioners were entitled to redelivery of the seized vehicle upon tender of payment within the statutory five-day period.
Territorial Enforcement of the Writ of Replevin — Court’s Analysis and Holding
The Court distinguished between a court’s jurisdiction to hear a case and its power to issue and enforce writs and processes. Under the Interim Rules implementing BP 129 (Supreme Court resolution of January 11, 1983), writs and processes other than certain specified extraordinary writs (certiorari, prohibition, mandamus, quo warranto, habeas corpus, injunction) may be served anywhere in the Philippines. A writ of replevin falls into the category of “all other processes” and therefore may be validly served and enforced nationwide. The Court relied on the same reasoning reiterated in Malaloan v. Court of Appeals, holding that no statutory or reglementary provision limits enforcement of such processes to the issuing court’s territorial station. Accordingly, the writ issued by the MTC Branch 44, Pasay could be enforced outside Pasay City.
Objection to Venue — Timing and Effect of Waiver
The Court reiterated the procedural rule that objection to improper venue must be timely raised in a motion to dismiss before filing any responsive pleading; otherwise it is waived. Petitioners first asserted venue impropriety in their Answer rather than by pre-pleading motion to dismiss; therefore the objection was untimely and deemed waived under the pre-1997 Rules of Court applicable at the time. Additionally, the promissory note contained a stipulation consenting to suit “anywhere in Metro Manila” at the bank’s option, which included Pasay, further undermining petitioners’ venue objection.
Subject-Matter Jurisdiction — Claim Amount Controls, Not Value of Chattel
The Court explained that jurisdiction is determined by the amount of the claim pleaded in the complaint, not by the market or asserted value of the chattel seized in ancillary proceedings. The complaint sought recovery of P190,635.90, an amount within the MTC’s jurisdictional limit for civil cases (not exceeding P200,000), and therefore the MTC properly exercised jurisdiction over the action. The mere fact that the mortgaged vehicle’s value might exceed the court’s monetary jurisdiction does not deprive the court of jurisdiction to adjudicate the claim for the indebtedness. The Court also noted that under Section 14 of the Chattel Mortgage Law, proceeds from sale of the mortgaged property are applied to costs and the secured obligation, with any surplus returned to the mortgagor.
Redelivery Requirement and Petitioners’ Noncompliance
Rule 60 (Sections 5–6) of the Rules of Court prescribes the procedure for redelivery: if the defendant does not object to the sufficiency of the plaintiff’s bond, the defendant may, before delivery to the plaintiff, file a bond in favor of the plaintiff in double the stated value of the property as show
Case Syllabus (G.R. No. 131283)
Case Caption and Citation
- Reported at 374 Phil. 668, Third Division, G.R. No. 131283, decided October 7, 1999.
- Petitioners: Oscar C. Fernandez and Nenita P. Fernandez.
- Respondents: The International Corporate Bank (now Union Bank of the Philippines) and Premiere Insurance & Surety Corporation.
- Decision authored by Justice Panganiban; Justices Melo (Chairman), Vitug, and Gonzaga-Reyes concurred; Justice Purisima took no part.
Procedural Posture
- The petitioners brought a Petition for Review on Certiorari under Rule 45 challenging:
- The September 4, 1997 Decision of the Court of Appeals in CA-GR SP No. 44409 which dismissed their suit for certiorari and prohibition seeking redelivery of a seized vehicle and nullification of the Writ of Replevin and subsequent orders.
- The November 14, 1997 Resolution of the Court of Appeals denying reconsideration.
- Underlying case in the Metropolitan Trial Court (MTC), Branch 44, Pasay City: Civil Case No. 983-96, in which the private respondent bank filed a complaint for sum of money with replevin and secured a Writ of Replevin.
- The Supreme Court deemed the case submitted for resolution on August 16, 1999 upon receipt of petitioners’ memorandum; respondents had filed memoranda earlier.
Statement of Facts
- Petitioners purchased a Nissan Sentra Sedan approximately on October 26, 1993 through a financing scheme of the private respondent bank.
- A chattel mortgage was executed in favor of the financing institution on November 10, 1993.
- Disclosure Statement in the credit transaction reflected:
- Cash purchase price: P492,000.00.
- Downpayment: P147,500.00.
- Leaving "the amount of P344, [5] 00.00 to be financed" (as reflected in the source text).
- Total amount to be paid for 48 monthly installments: P553,944.00.
- Petitioners allege the respondent bank filed an unfounded complaint for a sum of money with replevin (Case No. 983-96) before the MTC to unjustly enrich itself.
- Petitioners stated that when the bank filed its complaint with prayer for Writ of Replevin on November 28, 1997, monthly installments were almost fully paid and would have been fully paid on November 26, 1997.
- At time of seizure, the car’s mileage was 28,464 kilometers.
- Petitioners contend they attempted multiple times to pay installments for August, September, October 1996 and had not received any statement of delinquency as required by R.A. No. 3165 (Truth in Lending Act).
- Petitioners attempted consigning P69,168.00 by a Manager’s Check dated January 7, 1997 for months of August to February, 1997 (beyond the four months installment in advance) but allege they were refused by the court.
- Sheriff’s Return shows the subject vehicle was seized on January 7, 1997 by the branch sheriff and thereafter turned over to the plaintiff.
Pleadings, Motions and Trial Court Orders
- Petitioners filed an Answer in MTC raising special and affirmative defenses, including:
- Motion to Dismiss for lack of jurisdiction (arguing amount involved P553,344.00 exceeded MTC jurisdiction).
- Objection to venue (principal office of respondent bank in Makati; petitioners’ residence in Quezon City).
- MTC denied the Motion to Dismiss on February 10, 1997 (order received February 20, 1997).
- Petitioners filed Motion for Reconsideration on April 2, 1997; it was denied on May 9, 1997 (received May 29, 1997).
- MTC Order (quoted in record) stated:
- Defendant had 5 days from January 7, 1997 to post a re-delivery bond to secure return of the vehicle and a counter bond double the amount of the chattel; defendants failed to exercise this right.
- Complaint showed amount plaintiff seeks to recover is P190,635.00, within MTC jurisdiction.
- Promissory Note contained a stipulation as to venue agreed by the parties.
- Accordingly, the Motion to Re-deliver chattel and Motion to Dismiss for lack of jurisdiction were denied.
Ruling of the Court of Appeals
- Court of Appeals affirmed MTC rulings, holding:
- MTC of Pasay City had jurisdiction over civil cases where amount demanded did not exceed P200,000 exclusive of interest, damages and attorney’s fees.
- The basic claim in bank’s complaint was P190,635.90; thus, the MTC had jurisdiction.
- Objection to impropriety of venue should have been raised in a motion to dismiss before filing a responsive pleading; the issue was first raised in petitioners’ Answer and thus was untimely.
- Writ of Replevin issued by any MTC branch could be validly executed anywhere within Metro Manila pursuant to Section 27, Chapter III of B.P. 129 which authorized establishment of the Metropolitan Trial Court of Metro Manila with 82 branches; therefore writs and processes of a branch may be served and executed anywhere within Metro Manila.
- Petitioners sought reversal by filing the present Rule 45 petition to the Supreme Court.
Issues Presented to the Supreme Court
- Petitioners’ Memorandum distilled principal issues as:
- Whether MTC of Pasay City’s jurisdiction is strictly limited to the territorial confines of Pasay City under BP 129, Sec. 28.
- Whether the MTC’s jurisdiction is limited to not more than P200,000 (i.e., whether the seized chattel’s value exceeding P200,000 deprived MTC of jurisdiction).
- Whether, assuming MTC had jurisdiction and power to issue replevin, the Court of Appeals erred in upholding MTC’s denial of petitioners’ Motion for Redelivery within five days after seizure, contrary to law and settled jurisprudence.
- Whether the bank’s Memorandum dated July 5, 1999 should be stricken for alleged defects (lack of annexes) and whether absence of Premiere Insur