Partnership,

Trust and
Agency

Submitted by: MARY GRACE C. SAGARIO

IV- LO2

Submitted to: Atty. Marvin Tañada

WILLIAM ANGIDAN SIY vs. ALVIN TOMLIN

G.R. No. 205998

Facts:

In July, 2011, petitioner William Anghian Siy filed before the Regional Trial Court
of Quezon City (RTC) a Complaint for Recovery of Possession with Prayer for
Replevin against Frankie Domanog Ong (Ong), Chris Centeno (Centeno), John Co
Chua (Chua), and herein respondent Alvin Tomlin. The case was docketed as Civil
Case No. Q-11-69644 and assigned to RTC Branch 224.

In his Complaint, petitioner alleged that he is the owner of a 2007 model Range
Rover with Plate Number ZMG 272 which he purchased from Alberto Lopez III (Lopez)
on July 22, 2009; that in 2010, he entrusted the said vehicle to Ong, a businessman
who owned a second-hand car sales showroom ("Motortrend" in Katipunan, Quezon
City), after the latter claimed that he had a prospective buyer therefor; that Ong failed to
remit the proceeds of the purported sale nor return the vehicle.

The petitioner later found out that the vehicle had been transferred to Chua; that
in December, 2010, petitioner filed a complaint before the Quezon City Police District's
Anti-Carnapping Section; that Ong, upon learning of the complaint, met with petitioner to
arrange the return of the vehicle; that Ong still failed to surrender the vehicle.

The petitioner learned that the vehicle was being transferred to respondent; and
that the vehicle was later impounded and taken into custody by the PNP-Highway Patrol
Group (HPG) at Camp Crame, Quezon City after respondent attempted to process a
PNP clearance of the vehicle with a view to transferring ownership thereof.

Petitioner thus prayed that a writ of replevin be issued for the return of the vehicle
to him, and that the defendants be ordered to pay him ₱100,000.00 attorney's fees and
the costs of suit.

After hearing the application, the trial court issued a July 29, 2011 issue a Writ of
Replevin in favor of the plaintiff subject to the posting of the bond in the amount of
EIGHT MILLION PESOS (Php8,000,000.00) to be executed in favor of the defendants
for the return of the said property if such return be adjudged, and for the payment to the
adverse parties of such sum as they may recover from the applicant in this action.

Petitioner posted the required ₱8 million bond which was approved by the trial
court. A Writ of Replevin was then issued. The subject vehicle was seized by the court-
appointed special sheriff who then filed the corresponding Sheriff's Return. 
 On August 17, 2011, respondent filed an Omnibus Motion seeking to quash the
Writ of Replevin, dismiss the Complaint, and turn over or return the vehicle to him.

Respondent claimed that he is the lawful and registered owner of the subject
vehicle, having bought the same and caused registration thereof in his name on March
7, 2011; that the Complaint in Civil Case No. Q-11-69644 should be dismissed for
failure to pay the correct amount of docket fees; that the Complaint is defective for
failing to allege the correct and material facts as to ownership, possession/detention by
defendant, warranty against distraint/levy/seizure, and actual value of the vehicle; and
that the implementation of the writ was attended by procedural irregularities.

Particularly, respondent argued that petitioner could not prove his ownership of
the vehicle as the only pieces of evidence he presented in this regard were a manager's
check and cash voucher as proof of payment, and the affidavit of Lopez attesting to the
sale between him and petitioner which are insufficient; that in fact, he is the registered
owner of the vehicle, as shown by the Official Receipt and Certificate of
Registration dated March 7, 2011 issued in his name by the Land Transportation Office
(LTO); that it has not been shown that he wrongfully detained the vehicle, as petitioner
was never in possession thereof, since the same was already detained and seized by
the HPG at the time; that petitioner failed to allege, as required under Section 2 of Rule
60 of the 1997 Rules of Civil Procedure  (1997 Rules), that the vehicle has not been
distrained or taken for a tax assessment or a fine pursuant to law, or seized under a writ
of execution or preliminary attachment, or otherwise placed under custodia legis, or if
so seized, that it is exempt from such seizure or custody; and that petitioner failed to
allege the actual market value (₱4 million) of the vehicle, and instead, he intentionally
understated its value at only ₱2 million in order to avoid paying the correct docket fees.

As for the alleged procedural defects, respondent claimed that the sheriff
implemented the writ against the HPG, which is not a party to the case; that the
Complaint must be dismissed for failure to pay the correct docket foes based on the
actual value of the vehicle; and that the trial court acted with undue haste in granting the
writ of replevin.

Finally, respondent argued that he is the true owner of the subject vehicle as he
was able to register the transfer in his favor and obtain a certificate of registration in his
name; and that as between petitioner's documentary evidence and his official
registration documents, the latter should pre Petitioner filed his Opposition/Comment to
the omnibus motion.

Ruling of the Regional Trial Court

On November 21, 2011, the trial court issued an Order denying respondent's
Omnibus Motion for lack of merit. It held that respondent's remedy is not to move to
quash the writ of replevin, but to post a counterbond within the reglementary period
allowed under the 1997 Rules; that for failure to post said, counterbond, respondent's
prayer for the return of the vehicle to him is premature; that the issues of ownership and
insufficiency of the allegations in the complaint are best determined during trial; and that
an allegation of undervaluation of the vehicle cannot divest the court of jurisdiction.

Respondent moved for reconsideration, but he was rebuffed just the same.

Ruling of the Court of Appeals

Respondent filed a Petition for Certiorari before the CA claiming as he did in his

Omnibus Motion that the trial court should have dismissed on account of failure to pay
the correct docket fees, defective complaint, procedural irregularities in the service of
the writ of replevin, the fact that he is the registered owner of the subject vehicle, and for
the reason that the trial court irregularly took cognizance of the case during the period
for inventory of its cases. Respondent sought injunctive relief as well.

The CA rendered the assailed Decision granting the Petition. It held that the trial
court did not acquire jurisdiction over the instant case for failure of petitioner to pay the
correct docket fees, since petitioner misdeclared the value of the subject vehicle at only
₱2 million in his Complaint, when the market value thereof was around ₱4.5 million to
₱5 million; that this misdeclaration was undertaken with the clear intention to defraud
the government; and that petitioner failed to comply with the requirements under
Section 2, Rule 60 of the 1997 Rules, in that he gave a grossly inadequate value for the
subject vehicle in the Complaint and failed to allege therein that the vehicle has not
been distrained or taken for a tax assessment or a fine pursuant to law, or seized under
a writ of execution or preliminary attachment, or otherwise placed under custodia legis.

The CA added that it was improper for the sheriff to serve a copy of the writ of
replevin upon the respondent on the day following the seizure of the subject vehicle,
and not prior to the taking thereof; that the trial court is deemed to have acted without or
in excess of its jurisdiction when it seized and detained the vehicle on the basis of an
improperly served writ; and that respondent was correct in moving to quash the writ, as
the proper remedy in case of an improperly served writ of replevin is to file a motion to
quash the same or a motion to vacate the order of seizure, and not to file a counterbond
as the trial court declared.

The CA considered, the instant Petition for Certiorari is hereby orders that orders
dated 21 November 2011and 13 March 2012 rendered by the Regional Trial Court of
Quezon City are REVERSED and SET ASIDE and Civil Case No. Q-11-69644 pending
before the Regional Trial Court of Quezon City, Branch 224 is hereby DISMISSED for
want of jurisdiction; The subject Range Rover with plate number ZMG 272 should be
RETURNED to the Philippine National Police-Highway Patrol Group for its proper
disposition and finally; Prayer for the Issuance of Temporary Restraining Order and/or
Preliminary Injunction is DENIED for being moot and academic.

Issues

I.
Whether or note the trial court has acquired jurisdiction over the subject matter of the
complaint for recovery of possession with prayer for replevin.

II.

Whether or note the petitioner failed to allege all the material facts in the complaint for
replevin and affidavit of merit under sections 2 & 4, rule 60 of the revised rules of court.

III.

Whether or not the sheriff properly implemented the writ of replevin by serving the same
to any person who is in possession of the property subject thereof.

Ruling:

The Petition must be denied.

In a complaint for replevin, the claimant must convincingly show that he is either
the owner or clearly entitled to the possession of the object sought to be recovered, and
that the defendant, who is in actual or legal possession thereof, wrongfully detains the
same.

Rule 60 allows a plaintiff, in an action for the recovery of possession of personal

property, to apply for a writ of replevin if it can be shown that he is 'the owner of the
property claimed ... or is entitled to the possession thereof.’ The plaintiff need not be the
owner so long as he is able to specify his right to the possession of the property and his
legal basis therefor." 

In Filinvest Credit Corporation v. Court of Appeals, this Court likewise held that; It

is not only the owner who can institute a replevin suit. A person "entitled to the
possession" of the property also can, as provided in the same paragraph cited by the
trial court, which reads:

Sec. 2. Affidavit and bond. - Upon applying for such order the plaintiff must show;
(a) That the plaintiff is the owner of the property claimed, particularly describing it, or is
entitled to the possession thereof;

A party praying for the recovery of possession of personal property must show by
his own affidavit or that of some other person who personally knows the facts that he is
the owner of the property claimed, particularly describing it, or is entitled to the
possession thereof. It must be borne in mind that replevin is a possessory action the
gist of which focuses on the right of possession that, in turn, is dependent on a legal
basis that, not infrequently, looks to the ownership of the object sought to be replevied.
Wrongful detention by the defendant of the properties sought in an action for replevin
must be satisfactorily established. If only a mechanistic averment thereof is offered, the
writ should not be issued.

Petitioner admits and claims in his pleadings that on July 22, 2009, he purchased
the subject vehicle from Lopez, who executed and signed in blank a deed of sale and
sun-endered all documents of title to him; that he did not register the sale in his favor,
such that the vehicle remained in the name of Lopez; that in September, 2010, he
delivered the subject vehicle, together with all its documents of title and the blank deed
of sale, to Ong, with the express intention of selling the vehicle through the latter as
broker/second hand car dealer; that Ong appears to have issued in his favor two
guarantee checks amounting to P4.95 million; and that these checks
bounced. Thereafter, Ong was able to sell the vehicle using the deed of sale executed
and signed in blank by Lopez to Chua, who secured a certificate of registration in his
name. Chua then sold the vehicle, via a Deed of Sale of Motor Vehicle dated December
7, 2010, to respondent, who caused registration of the vehicle in his name on March 7,
2011. Apparently, Ong did not remit Chua's payment to petitioner, prompting the latter
to file formal complaints/charges for 1) estafa and carna1ming on May 18, 2011 before
the Office of the City Prosecutor of Quezon City, and 2) camapping on June 15, 2011
before the PNP-HPG in Camp Crame, Quezon City against Ong and Centeno. 34 It
appears as well that prior to the filing of these fonnal complaints, or sometime in
November, 2010, petitioner appeared before the Quezon City Anti-Carnapping Unit
based in Camp Karingal, Quezon City and, claiming that the subject vehicle was
cainapped, filed a "Failed to Return Vehicle" report; that on February 23, 2011,
petitioner, respondent, Ong, and Chua appeared at Can1p Karingal to shed light on the
claimed camapping; that the parties were requested to voluntarily surrender the subject
vehicle, but the request proved futile; and that petitioner was instead advised to file
appropriate charges and file a complaint with the PNP-HPG in order to include the
subject vehicle in the "hold order list".

This Court is not unaware of the practice by many vehicle buyers and second-hand car
traders of not transferring registration and ownership over vehicles purchased from their
original owners, and rather instructing the latter to execute and sign in blank deeds of
sale covering these vehicles, so that these buyers and dealers may freely and readily
trade or re-sell the vehicles in the second-hand car market without difficulty. This way,
multiple transfers, sales, or trades of the vehicle using these undated deeds signed in
blank become possible, until the latest purchaser decides to actually transfer the
certificate of registration in his name. For many car owners-sellers, this is an easy
concession; so long as they actually receive the sale price, they will sign sale deeds in
blank and surrender them to the buyers or dealers; and for the latter, this is convenient
since they can "flip'' or re-sell the vehicles to the public many times over with ease,
using these blank deeds of sale.

From petitioner's own account, he constituted and appointed Ong as his agent to
sell the vehicle, surrendering to the latter the vehicle, all documents of title pertaining
thereto, and a deed of sale signed in blank, with full understanding that Ong would offer
and sell the same to his clients or to the public.

In return, Ong accepted the agency by his receipt of the vehicle, the blank deed
of sale, and documents of title, and when he gave bond in the form of two guarantee
checks worth ₱4.95 million. All these gave Ong the authority to act for and in behalf of
petitioner. Under the Civil Code on agency, Art. 1869. Agency may be express, or
implied from the acts of the principal, from his silence or lack of action, or his failure to
repudiate the agency, knowing that another person is acting on his behalf without
authority.

Agency may be oral, unless the law requires a specific form.

Art. 1870. Acceptance by the agent may also be express or implied from his acts which
carry out the agency, or from his silence or inaction according to the circumstances.
(Emphasis and underscoring supplied)

"The basis of agency is representation and the same may be constituted expressly or
impliedly. In an implied agency, the principal can be bound by the acts of the implied
agent. " The same is true with an oral agency.

Acting for and in petitioner's behalf by virtue of the implied or oral agency, Ong was thus
able to sell the vehicle to Chua, but he failed to remit the proceeds thereof to petitioner;
his guarantee checks bounced as well. This entitled petitioner to sue for estafa through
abuse of confidence. This is exactly what petitioner did: on May 18, 2011, he filed a
complaint for estafa and carnapping against Ong before the Quezon City Prosecutor's
Office.

Since Ong was able to sell the subject vehicle to Chua, petitioner thus ceased to be the
owner thereof. Nor is he entitled to the possession of the vehicle; together with his
ownership, petitioner lost his right of possession over the vehicle. His argument that
respondent is a buyer in bad faith, when the latter nonetheless proceeded with the
purchase and registration of the vehicle on March 7, 2011, despite having been
apprised of petitioner's earlier November, 2010 "Failed to Return Vehicle" report filed
with the PNP-HPG, is unavailing.1âwphi1 Petitioner had no right to file said report, as
he was no longer the owner of the vehicle at the time; indeed, his right of action is only
against Ong, for collection of the proceeds of the sale.

Considering that he was no longer the owner or rightful possessor of the subject vehicle
at the time he filed Civil Case No. Q-11-69644 in July, 2011, petitioner may not seek a
return of the same through replevin. Quite the contrary, respondent, who obtained the
vehicle from Chua and registered the transfer with the Land Transportation Office, is the
rightful owner thereof, and as such, he is entitled to its possession. For this reason, the
CA was correct in decreeing the dismissal of Civil Case No. Q-11-69644, although it
e1red in ordering the return of the vehicle to the PNP-HPG, which had no further right to
hold the vehicle in its custody. As the registered and rightful owner of the subject
vehicle, the trial court must return the same to respondent.

Petitioner cannot be allowed to cut his losses by ostensibly securing the recovery of the
subject vehicle in lieu of its price, which Ong failed and continues to fail to remit. On the
other hand, Ong's declarations contained in his Affidavit, 36 to the effect that petitioner
remains the owner of the vehicle, and that Chua came into illegal possession and
ownership of the same by unlawfully appropriating the same for himself without paying
for it, are unavailing. Faced with a possible criminal charge for estafa initiated by
petitioner for failing or refusing to remit the price for the subject vehicle, Ong's
declarations are considered self-serving, that is, calculated to free himself from the
criminal charge. The premise is that by helping petitioner to actually recover his vehicle
by insisting that the same was unlawfully taken from him, instead of remitting its price to
petitioner, Ong expects that he and petitioner may redeem themselves from their bad
judgment; for the petitioner, the mistake of bestowing his full faith and confidence upon
Ong, and blindly surrendering the vehicle, its documents of title, and a deed of sale
executed and signed in blank, to the latter; and for Ong, his failure to remit the proceeds
of the sale to petitioner; and petitioner might then opt to desist from pursuing the estafa
and other criminal charges against him.

The petition is DENIED. The October 9, 2012 Decision and February 19, 2013
Resolution of the Court of Appeals in CA-G.R. SP No. 124967 are AFFIRMED WITH
MODIFICATION, in that the subject Land Rover Range Rover, with Plate Number ZMG
272 and particularly described in and made subject of these proceedings, is ORDERED
RETURNED to respondent Alvin Tomlin as its registered owner.

2.
INTERNATIONAL EXCHANGE BANK NOW UNION BANK OF PHILIPPINES v. SPS.
JEROME AND QUINNIE BRIONES, GR No. 205657, 2017-03-29
Facts:
On July 2, 2003, spouses Jerome and Quinnie Briones (Spouses Briones) took
out a loan from iBank to purchase a BMW Z4 Roadster
The Spouses Briones executed a promissory note with chattel mortgage that
required them to take out an insurance policy on the vehicle. The promissory note also
gave iBank, as the Spouses Briones' attorney-in-fact, irrevocable authority to file an
insurance claim in case of loss or damage to the vehicle
The insurance proceeds were to be made payable to iBank... the mortgaged
BMW Z4 Roadster was carnapped by three (3) armed men. Jerome Briones (Jerome)
immediately reported the incident to the Philippine National Police Traffic Management
Group
The Spouses Briones declared the loss to iBank, which instructed them to
continue paying the next three (3) monthly installments "as a sign of good faith," a
directive they complied with
 On March 26, 2004, or after the Spouses Briones finished paying the three (3)-
month installment, iBank sent them a letter demanding full payment of the lost vehicle
On April 30, 2004, the Spouses Briones submitted a notice of claim with their
insurance company, which denied the claim. On May 14, 2004, iBank filed a complaint
for replevin and/or sum of money against the Spouses Briones
The Complaint alleged that the Spouses Briones defaulted in paying the monthly
amortizations of the mortgaged vehicle... the Regional Trial Court dismissed iBank's
complaint
Petitioner iBank claims that it is entitled to recover the mortgaged vehicle or, in
the alternative, to collect a sum of money from respondents because of the clear
wording of the promissory note with chattel mortgage executed by respondents.[35]
Petitioner also insists that it is entitled to the award of damages
Petitioner maintains that the insurance coverage taken on the vehicle is "only an
aleatory alternative that [respondents] are entitled [to]" if their claim is granted by the
insurance company.
Moreover, petitioner posits that respondent Jerome's direct dealing with the
insurance company was a revocation of the agency relationship between petitioner and
respondents
Issues:
I.
Whether or not an agency relationship existed between the parties;
II.
Whether or not the agency relationship was revoked or terminated

Ruling:
The Petition is devoid of merit.
In a contract of agency, "a person binds himself to render some service or to do
something in representation or on behalf of another, with the consent or authority of the
latter.
Furthermore, Article 1884 of the Civil Code provides that "the agent is bound by
his acceptance to carry out the agency, and is liable for the damages which, through his
non-performance, the principal may suffer. All the elements of agency exist in this case.
Under the promissory note with chattel mortgage, Spouses Briones appointed
iBank as their attorney-in-fact, authorizing it to file a claim with the insurance company if
the mortgaged vehicle was lost or damaged. Petitioner was also authorized to collect
the insurance proceeds as the beneficiary of the insurance policy
 Revocation as a form of extinguishing an agency under Article 1924 of the Civil
Code only applies in cases of incompatibility, such as when the principal disregards or
bypasses the agent in order to deal with a third person in a way that excludes the agent.
In the case at bar, the mortgaged vehicle was carnapped on November 5, 2003
and the Spouses Briones immediately informed petitioner about the loss.The Spouses
Briones continued paying the monthly installment for the next three (3) months following
the vehicle's loss to show their good fait
The Spouses Briones' claim for loss cannot be seen as an implied revocation of
the agency or their way of excluding petitioner. They did not disregard or bypass
petitioner when they made an insurance claim; rather, they had no choice but to
personally do it because of their agent's negligence. This is not the implied termination
or revocation of an agency provided for under Article 1924 of the Civil Code.
While a contract of agency is generally revocable at will as it is primarily based
on trust and confidence,... A bilateral contract that depends upon the agency is
considered an agency coupled with an interest, making it an exception to the general
rule of revocability at will.[60] Lim v. Saban[61] emphasizes that when an agency is
established for both the principal and the agent, an agency coupled with an interest is
created and the principal cannot revoke the agency at will.
In the promissory note with chattel mortgage, the Spouses Briones authorized
petitioner to claim, collect, and apply the insurance proceeds towards the full
satisfaction of their loan if the mortgaged vehicle were lost or damaged. Clearly, a
bilateral contract existed between the parties, making the agency irrevocable. Petitioner
was also aware of the bilateral contract; thus, it included the designation of an
irrevocable agency in the promissory note with chattel mortgage that it prepared for the
Spouses Briones to sign.
Principles:
Revocation as a form of extinguishing an agency under Article 1924 of the Civil Code
only applies in cases of incompatibility, such as when the principal disregards or
bypasses the agent in order to deal with a third person in a way that excludes the agent.
While a contract of agency is generally revocable at will as it is primarily based on trust
and confidence, Article 1927 of the Civil Code provides the instances when an agency
becomes irrevocable: Article 1927. An agency cannot be revoked if a bilateral contract
depends upon it, or if it is the means of fulfilling an obligation already contracted, or if a
partner is appointed manager of a partnership in the contract of partnership and his
removal from the management is unjustifiable. A bilateral contract that depends upon
the agency is considered an agency coupled with an interest, making it an exception to
the general rule of revocability at will.