SUPERLINES TRANSPORTATION COMPANY, INC., vs.

PHILIPPINE NATIONAL CONSTRUCTION COMPANY and PEDRO BALUBAL Petitioner SuperLines Transportation Company, Inc. is a corporation engaged in the business of providing public transportation. On December 13, 1990, one of its buses, while traveling north and approaching the Alabang northbound exit lane, swerved and crashed into the radio room of respondent Philippine National Construction Company (PNCC). The incident was initially investigated by respondent PNCCs toll way patrol, Sofronio Salvanera, and respondent Pedro Balubal (Balubal), then head of traffic control and security department of the South Luzon toll way. The bus was thereafter turned over to the Alabang Traffic Bureau for it to conduct its own investigation of the incident. Because of lack of adequate space, the bus was, on request of traffic investigator Pat. Cesar Lopera (Lopera), towed by the PNCC patrol to its compound where it was stored. Subsequently, petitioner made several requests for PNCC to release the bus, but respondent Balubal denied the same, despite petitioners undertaking to repair the damaged radio room. Respondent Balubal instead demanded the sum of P40, 000.00, or a collateral with the same value, representing respondent PNCCs estimate of the cost of reconstruction of the damaged radio room. By petitioners estimate, however, the damage amounted to P10, 000.00 only. Petitioner thus filed a complaint for recovery of personal property (replevin) with damages against respondents PNCC and Balubal with the Regional Trial Court of Gumaca, Quezon with damages. In view of its inability to put up the bond for the issuance of a writ of replevin, petitioner opted to forego the same and just wait for the courts final judgment. Respondents PNCC and Balubal filed a counterclaim for damages, attorneys fees and costs of litigation. The trial court dismissed petitioners complaint and ordered petitioner to pay P40, 326.54 in actual damages, P50, 000.00 in exemplary damages, and P130, 000.00 in attorneys fees and litigation expenses. CA decision Petitioner appealed to the Court of Appeals which held that the storage of the bus for safekeeping purposes partakes of the nature of a deposit, hence, custody or authority over it remained with Lopera who ordered its safekeeping; and that Lopera acted as respondent PNCCs agent, hence, absent any instruction from him, respondent PNCC may not release the bus. The appellate court thus concluded that the case should have been brought against the police authorities instead of respondents.

Instant case Issue: W/N the remedy of replevin is valid in the case at bar Ruling: The term replevin is popularly understood as "the return to or recovery by a person of goods or chattels claimed to be wrongfully taken or detained upon the persons giving security to try the matter in court and return the goods if defeated in the action;" "the writ by or the common-law action in which goods and chattels are replevied," i.e., taken or gotten back by a writ for replevin;" and to replevy, means to recover possession by an action of replevin; to take possession of goods or chattels under a replevin order. Bouviers Law Dictionary defines replevin as "a form of action which lies to regain the possession of personal chattels which have been taken from the plaintiff unlawfully x x x, (or as) the writ by virtue of which the sheriff proceeds at once to take possession of the property therein described and transfer it to the plaintiff upon his giving pledges which are satisfactory to the sheriff to prove his title, or return the chattels taken if he fail so to do; the same authority states that the term, "to replevy" means " to re-deliver goods which have been distrained to the original possessor of them, on his giving pledges in an action of replevin." The term therefore may refer either to the action itself, for the recovery of personality, or the provisional remedy traditionally associated with it, by which possession of the property may be obtain[ed] by the plaintiff and retained during the pendency of the action. 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. Petitioners ownership of the bus being admitted by respondents, consideration of whether respondents have been wrongfully detaining it is in order. Following the conduct of an investigation of the accident, the bus was towed by respondents on the request of Lopera. It was thus not 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. CAs ruling (reversed) The CA held that there is no law prohibiting the impounding of vehicles involved in an accident. On the contrary, there is: Art III Sec 2 of the Constitution guarantees the right against unreasonable search and seizures. The seizure and impounding of petitioners bus, on Loperas request, were unquestionably violative of "the right to be let alone" by the authorities as guaranteed by the Constitution.

It is true that property held as evidence in a criminal case cannot be replevied. But the rule applies only where the property is lawfully held, that is, seized in accordance with the rule against warrantless searches and seizures or its accepted exceptions. Property subject of litigation is not by that fact alone in custodia legis. A thing is in custodia legis when it is shown that it has been and is subjected to the official custody of a judicial executive officer in pursuance of his execution of a legal writ." Only when property is lawfully taken by virtue of legal process is it considered in the custody of the law, and not otherwise. Petitioners prayer for recovery of possession of the bus is, in light of the foregoing discussion, thus in order. ASIAN TERMINALS INC. vs. RICAFORT Respondents were duly-licensed importers of vehicles. Sometime in April and May 1998, they imported 72 secondhand right-hand drive buses from Japan. When the shipment arrived at the South Harbor, Port of Manila, the District Collector of Customs impounded the vehicles and ordered them stored at the warehouse of the Asian Terminals, Inc. (ATI), a customs-bonded warehouse under the custody of the Aviation and Cargo Regional Division. Conformably with Section 2607 of the Tariff and Customs Code, the District Collector of Customs issued Warrants of Distraint3 against the shipment and set the sale at public auction on September 10, 1998. The vehicles were seized by virtue of Section 1, Republic Act (RA) No. 8506, which took effect on February 22, 1998, which provides that "it shall be unlawful for any person to import, cause the importation of, register, cause the registration of, use or operate any vehicle with its steering wheel right hand side thereof in any highway, street or road, whether private or public, or at the national or local x x x." On November 11, 1998, the importers filed a complaint with the RTC of Paraaque City, against the Secretary of Finance, Customs Commissioner, and the Chief Executive of the Societe Generale de Surillee, for replevin with prayer for the issuance of a writ of preliminary and mandatory injunction and damages. They contend that the importation of right-hand drive vehicles is not prohibited under RA No. 8506 provided that conversion kits are included in the imported vehicles. RTC granted writ of replevin. Meanwhile, Petitioner ATI filed a third party claim against respondent importers for unpaid warehouse dues. As the Bureau of Customs file a Motion/Notice to Dismiss/Withdraw Complaint, the trial court dismissed the complaint along with the Third Party Claim/Motion for Intervention as the latter is only it being only an accessory to the principal case. ATI moved to reconsider and was denied.

ATI then appealed to the CA which ruled that the RTC had no jurisdiction over the complaint filed by respondents. Under the Customs and Tariff Code, the Collector of Customs sitting in seizure and forfeiture proceedings had the exclusive jurisdiction to hear and determine all questions relating on the seizure and forfeiture of dutiable goods. Since it was bereft of jurisdiction in the principal case, it also had no jurisdiction over the third party claim/complaint in intervention as such is only ancillary and supplemental. Instant Case Issue: W/N the RTC has jurisdiction over the instant case, and, w/n the replevin it issued was valid. Ruling: Petition must fail. The Trial Court has no jurisdiction. Section 602 of the Tariffs and Customs Code provides that the Bureau of Customs shall exercise exclusive jurisdiction over seized and forfeited cars. Under Section 2301 of the TCC, the Collector of Customs is empowered to make a seizure of cargoes and issue a receipt for the detention thereof: SEC. 2301. Warrant for Detention of Property-Cash Bond. Upon making any seizure, the Collector shall issue a warrant for the detention of the property; and if the owner or importer desires to secure the release of the property for legitimate use, the Collector shall, with the approval of the Commissioner of Customs, surrender it upon the filing of a cash bond, in an amount to be fixed by him, conditioned upon the payment of the appraised value of the article and/or any fine, expenses and costs which may be adjudged in the case: X X X As the Court ruled in Jao v. Court of Appeals, Regional Trial Courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the Bureau of Customs and to enjoin or otherwise interfere with these proceedings. It is the Collector of Customs, sitting in seizure and forfeiture proceedings, who has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Thus, the RTC had no jurisdiction to take cognizance of the petition for replevin by respondents herein, issue the writ of replevin and order its enforcement. The Collector of Customs had already seized the vehicles and set the sale thereof at public auction. The RTC should have dismissed the petition for replevin at the outset. By granting the plea of respondents (plaintiffs below) for the seizure of the vehicles and the transfer of custody to the court, the RTC acted without jurisdiction over the action and the vehicles subject matter thereof. It bears stressing that the forfeiture of seized goods in the Bureau of Customs is a proceeding against the goods and not against the owner. It is in the nature of a proceeding in rem, i.e., directed against the res or imported articles and entails a determination of the legality of their importation. In this proceeding, it is, in legal contemplation, the property

itself which commits the violation and is treated as the offender, without reference whatsoever to the character or conduct of the owner. In fine, the initial orders of the RTC granting the issuance of the writ of replevin and its implementation are void. While it is true that the District Collector of Customs allowed the release of the vehicles and the transfer thereof to the custody of the RTC upon the payment by the private respondents of the required taxes, duties and charges, he did not thereby lose jurisdiction over the vehicles; neither did it vest jurisdiction on the RTC to take cognizance of and assume jurisdiction over the petition for replevin. As very well explained by the Office of the Solicitor General, the District Collector of Customs agreed to transfer the vehicles to the custody of the RTC since the latter had ordered the arrest of those who would obstruct the implementation of the writ. The District Collector of Customs had yet to resolve whether to order the vehicles forfeited in favor of the government, in light of the opinion of the Secretary of Justice that, under RA No. 8506, the importation was illegal. The RTC cannot be faulted for dismissing petitioners complaint-in-intervention. Considering that it had no jurisdiction over respondents action and over the shipment subject of the complaint, all proceedings before it would be void. The RTC had no jurisdiction to take cognizance of the complaint-in-intervention and act thereon except to dismiss the same. Moreover, considering that intervention is merely ancillary and supplemental to the existing litigation and never an independent action, the dismissal of the principal action necessarily results in the dismissal of the complaint-in-intervention. Likewise, a court which has no jurisdiction over the principal action has no jurisdiction over a complaint-in-intervention. Intervention presupposes the pendency of a suit in a court of competent jurisdiction. Jurisdiction of intervention is governed by jurisdiction of the main action SERGS PRODUCTS INC. vs. PCI Leasing & Finance, Inc. On February 13, 1998, respondent PCI Leasing and Finance, Inc. filed with the RTC-QC a complaint for [a] sum of money, with an application for a writ of replevin. On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of replevin (Annex B) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses. Petitioners filed a motion for special protective order invoking the power of the court to control the conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin. This motion was opposed by PCI Leasing on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin.

In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code, the parties agreement to the contrary notwithstanding. They argued that to give effect to the agreement would be prejudicial to innocent third parties. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical. On April 7, 1998, petitioner went to [the CA] via an original action for certiorari. Citing the Agreement of the parties, the appellate court held that the subject machines were personal property, and that they had only been leased, not owned, by petitioners. It also ruled that the words of the contract are clear and leave no doubt upon the true intention of the contracting parties. Instant Case Issue: W/N the writ of replevin was validly issued against machineries considered immovable by immobilization under the Civil Code. Ruling: Petition devoid of merit. Rule 60 of the Rules of Court provides that writs of replevin are issued for the recovery of personal property only. Section 3 thereof reads: SEC. 3. Order. -- Upon the filing of such affidavit and approval of the bond, the court shall issue an order and the corresponding writ of replevin describing the personal property alleged to be wrongfully detained and requiring the sheriff forthwith to take such property into his custody. On the other hand, Article 415 of the Civil Code enumerates immovable or real property as follows: ART. 415. The following are immovable property: (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works; In the present case, the machines that were the subjects of the Writ of Seizure were placed by petitioners in the factory built on their own land. Indisputably, they were essential and principal elements of their chocolate-making industry. Hence, although each of them was movable or personal property on its own, all of them have become immobilized by destination because they are essential and principal elements in the industry. In that sense, petitioners are correct in arguing that the said machines are real, not personal, property pursuant to Article 415 (5) of the Civil Code.

Be that as it may, we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure. The Court has held that contracting parties may validly stipulate that a real property be considered as personal. After agreeing to such stipulation, they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein. In the present case, the Lease Agreement clearly provides that the machines in question are to be considered as personal property. Clearly then, petitioners are estopped from denying the characterization of the subject machines as personal property. Under the circumstances, they are proper subjects of the Writ of Seizure. It should be stressed, however, that our holding -- that the machines should be deemed personal property pursuant to the Lease Agreement is good only insofar as the contracting parties are concerned. Hence, while the parties are bound by the Agreement, third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. In any event, there is no showing that any specific third party would be adversely affected.