G.R. No. 91461 - Normal Holdings and Development Corp. vs. Court of Appeals

Case Summary (G.R. No. 91461)

Factual Background

Sometime in February 1984, Normal engaged JRHECI to haul and completely repair heavy equipment identified in the complaint and amended complaint in Civil Case No. 12507. JRHECI executed and performed the required labor, supplied available spare parts, and sent progress billings paid by Normal in installments, with the last payment made on January 15, 1985. After that date, Normal stopped paying progress billings. As of December 4, 1985, Normal’s total obligations to JRHECI were assessed at P1,850,073.24, which remained unpaid despite repeated demands.

JRHECI, because no payment was made and demands were ignored, notified Normal of its desire to exercise a mechanic’s lien over the heavy equipment, unless Normal came up with a better alternative for settlement. Normal, on the other hand, claimed it had already paid P3,546,875.00 and that JRHECI failed to complete repairs. Normal then filed Civil Case No. 12507 on December 12, 1985, seeking accounting and damages, with a prayer for a writ of preliminary injunction.

Subsequently, Normal amended its complaint to pray for a writ of replevin to recover possession of properties it alleged were being unjustly detained by JRHECI. On December 27, 1985, Judge Fernando P. Agdamag granted Normal’s application for a writ of replevin. At the instance of JRHECI, Deputy Sheriff Norberto Doblada started implementing the writ on late afternoon of December 27, 1985 and continued until December 31, 1985.

Motion to Quash and the Allegation of Overbroad Seizure

On January 6, 1986, JRHECI filed a motion to quash the writ of replevin, alleging that it was irregularly, improperly, and improvidently issued and that it was implemented in an oppressive and malevolent manner. JRHECI specifically accused that, during implementation, the deputy sheriff and Normal’s representative seized not only the twelve (12) heavy equipment described in the writ of seizure but also carted away component parts and component assemblies of heavy equipment, including imported spare parts and undercarriage components/parts that allegedly did not belong to Normal and were instead owned by JRHECI and other customers such as R.C. Gonzalez Co., Inc. and others.

Normal opposed the motion on January 31, 1986. The parties then submitted memoranda supporting their positions, pursuant to an order dated August 22, 1986.

Trial Court Proceedings and Partial Grant of the Motion

On March 18, 1987, the trial court issued an order partially granting JRHECI’s motion to quash. The trial court directed Normal, within fifteen (15) days from receipt of the order, to return to JRHECI the equipment parts not attached to the equipment described in the writ of seizure and described in the several receipts attached to the sheriff’s partial report.

In explaining its action, the trial court reasoned that neither the amended complaint nor the affidavit supporting the application for the writ alleged that the equipment sought to be seized had been dismantled such that the dismantled parts should likewise be seized. The trial court held that if the implementing sheriff discovered during service that the equipment to be seized was short of component parts and assemblies, the sheriff should have reported the matter to the court and sought a determination, after proper motion and with notice, of whether the dismantled parts were indeed subject to the writ. The trial court further found that the deputy sheriff did not confine seizure to the items specifically described in Normal’s amended complaint and that the writ of seizure, by its terms, did not mention component assemblies, spare parts, and undercarriage components detached from the equipment. It concluded that, by seizing those spare parts and undercarriage assemblies on the deputy sheriff’s own initiative, the implementation exceeded the authority granted by the writ.

Normal moved for reconsideration on April 14, 1987, arguing that the sheriff acted within authority when seizing items not mentioned in the writ of seizure nor in the amended complaint and affidavit; it also contended that JRHECI bore the burden to prove ownership of items allegedly illegally seized. Normal later supplemented its motion by asserting that the properties taken were properly described in the amended complaint and claiming that JRHECI admitted the twelve (12) units of tractors were dismantled to prevent enforcement of the writ of replevin.

JRHECI filed an omnibus opposition to Normal’s motion for reconsideration and supplement, reiterating that the sheriff exceeded authority because some items seized were properties of JRHECI.

On April 3, 1989, the trial court denied Normal’s motion for reconsideration.

Certiorari in the Court of Appeals

On May 5, 1989, Normal filed a petition for certiorari in the Court of Appeals, seeking annulment and setting aside of the trial court orders allegedly issued in grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals, through its Fifteenth Division, dismissed Normal’s petition for certiorari on October 16, 1989 for lack of merit. Normal’s motion for reconsideration was denied on December 13, 1989.

The Parties’ Contentions in the Supreme Court

In the petition for review before the Supreme Court, Normal alleged that the Court of Appeals erred in dismissing the certiorari petition and failing to hold that the trial court committed grave abuse of discretion amounting to lack of jurisdiction or excess thereof. Normal also insisted, in substance, on several points: that JRHECI should prove that items seized did not belong to Normal; that the replevied properties were properly described in the amended complaint; that JRHECI dismantled all the heavy equipment except one; and that JRHECI waived defects in the description of the properties in the writ of replevin.

The Supreme Court reviewed these contentions against the trial court’s stated reasons for partially quashing the writ and against the controlling principles governing implementation of writs of replevin, including the respective burdens of proof and the effect of factual findings reached by the lower courts.

Legal Basis and Reasoning

The Supreme Court held that the Court of Appeals correctly found no abuse of discretion in the trial court’s orders. The Supreme Court emphasized that the trial court acted consistently with existing law and jurisprudence, particularly Garcia vs. Vasquez, 27 SCRA 505. It also drew support from Machinery and Engineering Supplies, Inc. vs. Court of Appeals, 96 Phil. 70, where the Court had ruled that even where seizure of equipment and personal properties was ordered, the authority did not extend to tortious destruction by the sheriff or the sheriff’s agents; the trial judge was duty-bound to provide redress for unlawful and wrongful acts committed by those acting in implementation.

Applying the rationale in the case, the Supreme Court ruled that there was no legal basis for the deputy sheriff and Normal’s representative to cart away component parts not specified in the writ of replevin. Because those acts were unlawful and unjustified, JRHECI, as possessor of the items before illegal seizure, had the right to be respected in its possession and could not be deprived without due process, citing Viloria vs. Puno, et al., 95 Phil. 802 and Maglasang vs. Maceren, et al., 46 O.G. No. 11, both as referenced in the decision. The Court further stated that since possession was disturbed illegally, it should be restored through remedies established in the rules of procedure, citing Rodriguez vs. Tino, 16 Phil. 301.

On the specific burden of proof argument raised by Normal, the Supreme Court rejected Normal’s contention that JRHECI should be required to prove that the seized properties did not belong to Normal. It reasoned that a party need not prove a negative allegation. It also held that the law placed the burden of proving ownership and/or right of possession over the items to be seized on the applicant seeking the writ. The Supreme Cour

Case Syllabus (G.R. No. 91461)

Normal Holdings and Development Corporation filed a petition for review on certiorari assailing the Court of Appeals decision dated October 16, 1989 and its denial of reconsideration dated December 13, 1989.
The assailed Court of Appeals rulings affirmed orders of the Regional Trial Court of Makati, Branch 138 that partially set aside the writ of replevin issued in Civil Case No. 12507.
The controversy centered on whether the implementing deputy sheriff and NORMAL’s representative exceeded the scope of the writ by seizing items not specifically described in the writ of seizure.

Parties and Procedural Posture

Petitioner Normal Holdings and Development Corporation sought review of the Court of Appeals dismissal of its petition for certiorari.
Respondents were the Court of Appeals and J.R. Heavy Equipment Center, Inc. (JRHECI).
The Court of Appeals dismissed NORMAL’s petition for certiorari for lack of merit.
The Supreme Court dismissed the petition for review on certiorari for lack of merit and affirmed the Court of Appeals.
The Supreme Court treated key factual findings of the trial court and Court of Appeals as binding.

Background Contract and Obligations

NORMAL engaged JRHECI in February 1984 for hauling and complete repairs of specified heavy equipment, including supply of spare parts available and labor necessary to restore the equipment into good running condition.
JRHECI executed the required labor, supplied materials and available spare parts, and issued progress billings that NORMAL paid on installment.
NORMAL stopped paying progress billings after January 15, 1985, and by December 4, 1985 its total obligation was P1,850,073.24, which remained unpaid despite repeated demands.
JRHECI invoked its mechanic’s lien right due to nonpayment, and notified NORMAL of its intent to exercise that right unless NORMAL offered a better settlement.

Civil Case and Writ Application

NORMAL filed Civil Case No. 12507 for accounting and damages, with prayer for preliminary injunction, alleging it had already paid P3,546,875.00 and that JRHECI had not completed repairs.
NORMAL later amended its complaint and prayed for a writ of replevin to recover possession of properties alleged to be unjustly detained by JRHECI.
On December 27, 1985, respondent Judge Fernando P. Agdamag issued an order granting NORMAL’s application for a writ of replevin.
On the same date, Deputy Sheriff Norberto Doblada, at the instance of JRHECI, began implementing the writ of seizure in late afternoon and continued until December 31, 1985.
JRHECI did not challenge the writ solely on legal grounds but also asserted that implementation was oppressive and irregular.

Motion to Quash Writ

On January 6, 1986, JRHECI filed a motion to quash writ of replevin alleging the writ was irregularly, improperly, and improvidently issued and was implemented oppressively.
JRHECI alleged that during implementation the sheriff seized not only the twelve (12) heavy equipment described in the writ, but also carted away component parts, component assemblies, imported spare parts, and undercarriage components/parts not belonging to NORMAL, purportedly belonging to JRHECI and other customers including R.C. Gonzalez Co., Inc. and others.
NORMAL opposed the motion dated January 31, 1986.
The parties submitted memoranda after the court’s August 22, 1986 order.

Trial Court’s Partial Quash

On March 18, 1987, the trial court issued an order partially granting the motion to quash.
The trial court directed NORMAL, within fifteen (15) days from receipt, to return to JRHECI equipment parts not attached to the equipment described in the writ of seizure and described in the receipts attached to the sheriff’s Partial Report.
The trial court grounded its partial quash on the failure of NORMAL’s amended complaint and the supporting affidavit to allege that dismantled parts were also subject to seizure.
The trial court held that when the sheriff discovered the equipment were missing component parts or assemblies, the sheriff should have reported to the court and sought resolution through proper proceedings with notice and a hearing.
The trial court concluded that by deciding on his own that dismantled parts were parts to be seized, the deputy sheriff exceeded his authority under the writ.
The trial court also found that the writ of seizure described with particularity the twelve (12) equipment to be seized and did not mention component assemblies, spare parts, or undercarriage components detached from the equipment.

Motion for Reconsideration and Denial

On April 14, 1987, NORMAL moved for reconsideration, asserting the sheriff acted within authority when he seized items not mentioned in the writ and amended complaint and insisting JRHECI must prove ownership of items allegedly illegally seized.
NORMAL filed a supplement alleging the properties taken were properly described in the amended complaint and claiming that JRHECI admitted dismantling the tractors except one.
On October 11, 1988, JRHECI filed an omnibus opposition reiterating the argument that the sheriff exceeded authority because some seized items were properties of JRHECI.
On April 3, 1989, the trial court denied NORMAL’s