Allied Leasing & Finance Corporation v. Honorable Court of Appeals
REITERATIONFacts
1. The Antecedents: Allied Leasing and Finance Corporation (petitioner) filed a complaint for sum of money and a petition for a writ of replevin against respondent-spouses Emeterio and Lucia Sia, doing business as EMILUZ PRINTING INDUSTRIES. The petitioner alleged that the respondents defaulted on payments for several printing equipment leased under four separate agreements. These agreements stipulated that upon default, all amounts due would become immediately demandable. 2. Procedural History: The Regional Trial Court (RTC) of Pasig, Branch 151, initially granted the writ of replevin upon petitioner's posting of a P2,000,000.00 bond. The respondent-spouses were declared in default for failing to file an Answer. Subsequently, they filed motions to quash the writ and set aside the default order. The presiding judge inhibited himself, and the case was transferred to Branch 165. The RTC later set aside the default order, and the respondent-spouses filed an Answer, claiming ownership of the equipment and asserting the lease agreements did not reflect the true transaction. On January 30, 1989, the RTC quashed the writ of replevin, stating the ownership dispute needed resolution first. A motion for reconsideration was denied on July 14, 1989. The petitioner then filed a petition for certiorari with the Court of Appeals (CA) assailing these RTC orders. 3. The Petition: The petitioner filed the instant petition for certiorari under Rule 65 of the Rules of Court, assailing the CA's Resolutions dated December 11, 1989, and January 30, 1990, which dismissed its petition for certiorari against the RTC's orders. The CA dismissed the petition on the grounds that it was filed beyond a reasonable period. The petitioner argues that the period should be counted from its receipt of the denial of its motion for reconsideration (July 21, 1989), not from the issuance of the order itself. The petitioner also contends that the RTC gravely abused its discretion in quashing the writ of replevin without requiring a mandatory counterbond from the respondents, as mandated by the Rules of Court, despite the respondents' claim of ownership.
Issue(s)
Whether the Court of Appeals erred in dismissing Allied's petition for certiorari on the ground that it was filed beyond a reasonable period. Whether the trial court committed a grave abuse of discretion in quashing the writ of replevin without requiring the respondent-spouses to file a mandatory counterbond.
Ruling
The Supreme Court granted the petition, reversed and set aside the questioned Resolutions of the Court of Appeals and the Orders of the Regional Trial Court. Costs were against the private respondents.
Ratio Decidendi
On the issue of the reasonableness of the period to file a petition for certiorari: The Court held that the Court of Appeals erred in reckoning the period for filing the petition for certiorari. While Rule 65 of the Rules of Court does not specify a period, it must be filed within a reasonable time. The Court clarified that the period should be counted from July 21, 1989, the date Allied received the Order denying its motion for reconsideration, not from July 14, 1989, the date of issuance of the Order. The petition was filed on October 24, 1989, which is ninety-five (95) days or about three (3) months and a few days after receipt of the denial. Under the circumstances and considering the issues involved, this period was deemed reasonable. The Court emphasized that not allowing the petition, filed well within four months, would deprive Allied of its substantial right and leave it without remedy, citing Province of Misamis Occidental v. Catolico. On the issue of grave abuse of discretion in quashing the writ of replevin: The Court agreed that the trial court committed a grave abuse of discretion. It reiterated the ruling in Yang v. Valdez that a defendant in a replevin suit may demand the return of the property by filing a redelivery bond within the periods specified in Sections 5 and 6 of Rule 60. The records showed that the respondent-spouses never offered a counterbond, nor did the trial court demand one before quashing the writ. The Court noted that the trial court itself acknowledged that the writ was issued ex-parte and that the plaintiff had shown entitlement to it at the time of application. The claim of ownership by the respondent-spouses, while a common defense in replevin suits, does not negate the procedural requirement of a counterbond for the return of the property. The writ of replevin is a provisional remedy, and entitlement to possession, not necessarily legal title, is sufficient for its issuance.
Main Doctrine
A writ of replevin may not be quashed without requiring the defendant to file a mandatory counterbond as provided by the Rules of Court, even if the defendant claims ownership of the property. The filing of a petition for certiorari to question such quashal is considered filed within a reasonable period if done within approximately three months from receipt of the order denying the motion for reconsideration.