CITIBANK, N.A. (FORMERLY FIRST NATIONAL CITY BANK), PETITIONER, VS. HONORABLE COURT OF APPEALS AND DOUGLAS F.

ANAMA, RESPONDENTS.

THE

1. In consideration for a loan with Citibank, N.A. (formerly First National City Bank), pri ate respondent !o"#las Anama e$ec"ted a promissory note to pay the plaintiff bank the s"m of %&1',(((.(( in si$ty ()() e*"al s"ccessi e monthly installments. +. ,o sec"re payment of the loan, Anama also constit"ted a Chattel -ort#a#e in fa or of petitioner, on ario"s machineries and e*"ipment. .. /owe er, for fail"re and ref"sal of the pri ate respondent to pay the monthly installments despite repeated demands, petitioner filed a erified complaint a#ainst Anama in the -anila CFI for the collection of his "npaid balance, for the deli ery and possession of the chattels co ered preparatory to the foreclos"re. &. Anama s"bmitted his Answer with Co"nterclaim, denyin# the material a erments of the complaint, and a errin#, inter alia that the remedy of reple in was improper and the writ of sei0"re sho"ld be acated. 1. ,he trial co"rt, "pon proof of defa"lt of the pri ate respondent in the payment of the said loan, iss"ed an 2rder of 3eple in. !espite the iss"ance of the said order howe er, act"al deli ery of possession did not take place beca"se of ne#otiations for an amicable settlement. A pre4trial conference was held and the petitioner then took o er pri ate respondent5s b"siness as recei er. B"t when settlement failed, the lower co"rt tried the case on the merits. 6. %etitioner presented a -otion for the Iss"ance of an Alias 7rit of 8ei0"re, orderin# the sheriff to sei0e and dispose of the properties in ol ed. '. %ri ate respondent opposed the motion claimin#, amon# others, (1) that Citibank5s %&((,((( reple in bond to answer for dama#es was #rossly inade*"ate9 (+) that he was ne er in defa"lt to :"stify the sei0"re9 $$$ (&) that his s"pposed obli#ations with Citibank were f"lly sec"red and his mort#a#ed properties are more than s"fficient to sec"re payment thereof9 $$$ ;. ,he trial co"rt iss"ed an 2rder #rantin# the -otion for Alias 7rit of 8ei0"re. %ri ate respondent mo ed for reconsideration of the aforesaid order b"t the same was denied. As a conse*"ence, the sheriff sei0ed s"b:ect properties, dismantled and remo ed them from the premises where they were installed, deli ered them to petitioner5s possession and ad ertised them for sale at p"blic a"ction. 1(. %ri ate respondent filed with the CA a %etition for Certiorari and %rohibition with In:"nction. Findin# that the trial co"rt acted with #ra e ab"se of discretion amo"ntin# to e$cess or lack of :"risdiction in iss"in# the assailed resol"tions, the CA #ranted the petition,

holdin# that the pro isions of the 3"les of Co"rt on 3eple in and 3ecei ership ha e not been complied with, in that (1) there was no Affida it of -erit accompanyin# the Complaint for 3eple in9 (+) the bond posted by Citibank was ins"fficient9 and (.) there was non4compliance with the re*"irement of a recei er5s bond and oath of office. /ence the present petition for certiorari with ,32 by Citibank

ISSUE: 1W/N CA e e! "# $"#!"#% &'(& &'e "))*(#+e ,$ - "& ,$ e./e0"# -() "1. ,.e
+. 7<N CA erred in findin# that the complaint did not comply with the re*"irements of an affida it of merit .. 7<N CA erred in findin# that the bond posted by petitioner is ins"fficient &. 7<N CA erred in findin# that petitioner did not comply with 8ection 1, 3"le 1;

RULING: 1. N2. %etitioner contends that the Co"rt of Appeals, by n"llifyin# the writ of sei0"re iss"ed below, in effect, rendered :"d#ment on the merits and ad:"d#ed pri ate respondent Anama as the person lawf"lly entitled to the possession of the properties s"b:ect of the reple in s"it. It is theori0ed that the same cannot be done, as the case before the co"rt below was yet at trial sta#e and the lower co"rt still had to determine whether or not pri ate respondent was in fact in defa"lt in the payment of his obli#ation to petitioner Citibank, which defa"lt wo"ld warrant the sei0"re of s"b:ect machineries and e*"ipment. ,his contention is "ntenable.
,he Co"rt of Appeals relied on 3"le )( of the 3"les of Co"rt as to determination on whether the pro isions of the 3"les of Co"rt on deli ery of personal property or reple in as a pro isional remedy were followed. 8ec. + of the said r"le pro ides, 8ec. +. Affida it and Bond. 4 =pon applyin# or s"ch order the plaintiff m"st show by his own affida it or that of some other person who personally knows the facts> (a) ,hat the plaintiff is the owner of the property claimed partic"larly describin# it, or is entitled to the possession thereof9 (b) ,hat the property is wron#f"lly detained by the defendant, alle#in# the ca"se of detention thereof accordin# to his best of knowled#e, information and belief9 (c) ,hat it has not been taken for a ta$ assessment or fine p"rs"ant to law, or sei0ed "nder an e$ec"tion, or an attachment a#ainst the property of the plaintiff, or is so sei0ed, that is e$empt from s"ch sei0"re9 and

(d) ,he act"al al"e of the property. ,he plaintiff m"st also #i e a bond, e$ec"ted to the defendant in do"ble of the al"e of the property as stated in the affida it aforementioned, for the ret"rn of the property to the defendant of s"ch s"m as he may reco er from the plaintiff in the action. ,he Co"rt of Appeals did not pass "pon the iss"e of who, as between !o"#las Anama and Citibank, is entitled to the possession of s"b:ect machineries, as asserted by the latter. 7hen it ordered the restoration of the said machineries to !o"#las Anama (now the pri ate respondent), it merely bro"#ht the parties to a stat"s *"o, by restorin# the defendant to the possession of his properties, since there was a findin# that the iss"ance of the writ was not in accordance with the specific r"les of the 3"les of Co"rt.

reason of its bein# compelled to s"rrender the possession of the disp"ted property pendin# trial of the action. ,he remedies pro ided "nder 8ection 1, 3"le )(, are alternati e remedies. Conformably, a defendant in a reple in s"it may demand the ret"rn of possession of the property reple ined by filin# a redeli ery bond e$ec"ted to the plaintiff in do"ble the al"e of the property as stated in the plaintiff5s affida it within the period specified in 8ections 1 and ). Alternati ely, ?the defendant may ob:ect to the s"fficiency of the plaintiff5s bond, or of the s"rety or s"reties thereon9@ b"t if he does so, ?he cannot re*"ire the ret"rn of the property@ by postin# a co"nter4 bond p"rs"ant to 8ections 1 and ). ,he pri ate respondent did not opt to ca"se redeli ery of the properties to him by filin# a co"nter4bond precisely beca"se he ob:ected to the s"fficiency of the bond posted by plaintiff. ,herefore, he need not file a co"nter4bond or redeli ery bond. 5. NO. CA fo"nd that the re*"irements of 8ection 1, 3"le 1; on recei ership were not complied with by the petitioner, partic"larly the filin# or postin# of a bond and the takin# of an oath. /owe er, the old 3"les of Co"rt which was in effect at the time this case was still at trial sta#e, a bond for the appointment of a recei er was not #enerally re*"ired of the applicant, e$cept when the application was made e$ parte. CA was ri#ht in findin# a defect in s"ch ass"mption of recei ership in that the re*"irement of takin# an oath has not been complied with. 4 For erroneo"sly iss"in# the alias writ of sei0"re witho"t in*"irin# into the s"fficiency of the reple in bond and for allowin# petitioner to ass"me recei ership witho"t the re*"isite oath, the Co"rt of Appeals aptly held that the trial co"rt acted with #ra e ab"se of discretion in dealin# with the sit"ation. =nder the 3e ised 3"les of Co"rt, the property sei0ed "nder a writ of reple in is not to be deli ered immediately to the plaintiff. ,his is beca"se a possessor has e ery ri#ht to be respected in its possession and may not be depri ed of it witho"t d"e process. %etition !I8-I88A!. N2,A> 4 Act"al al"e (or act"al market al"e) means ?the price which an article wo"ld command in the ordinary co"rse of b"siness, that is to say, when offered for sale by one willin# to sell, b"t not "nder comp"lsion to sell, and p"rchased by another who is willin# to b"y, b"t "nder no obli#ation to p"rchase it@.

2. 3UALIFIED YES. 7hile petitioner is correct insofar as it contends that s"bstantial compliance with the affida it re*"irement may be permissible p"rs"ant to 8ection +, 3"le )( of the 32C, petitioner5s complaint does notalle#e all the facts that sho"ld be set forth in an affida it of merit. ,he Co"rt held that the absence of an affida it of merit is not fatal where the petition itself, which is "nder oath, recites the followin# facts constit"ti e of the #ro"nds for the petition> (1) that plaintiff owns the property partic"larly describin# the same, or that he is entitled to its possession9 (+) wron#f"l detention by defendant of said property9 (.) that the property is not taken by irt"e of a ta$ assessment or fine p"rs"ant to law or sei0ed "nder e$ec"tion or attachment or, if it is so sei0ed, that it is e$empt from s"ch sei0"re9 and the (&) the act"al al"e of the property. Altho"#h the complaint alle#es that petitioner is entitled to the possession of s"b:ect properties by irt"e of the chattel mort#a#e e$ec"ted by the pri ate respondent, "pon the latter5s defa"lt on its obli#ation, and the defendant5s alle#ed ?wron#f"l detention@ of the same, the said complaint does not state that s"b:ect properties were not taken by irt"e of a ta$ assessment or fine imposed p"rs"ant to law or sei0ed "nder e$ec"tion or attachment or, if they were so sei0ed, that they are e$empt from s"ch sei0"re. ,hen too, petitioner stated the al"e of s"b:ect properties at a ?probable al"e of %+((,(((.((, more or less@. Altho"#h respondent5s defense of lack of affida it of merit is meritorio"s, proced"rally, s"ch a defense is "nfort"nately no lon#er a ailable for fail"re to plead the same in the Answer as re*"ired by the omnib"s motion r"le. 4. YES. 32C re*"ires the plaintiff to ?#i e a bond, e$ec"ted to the defendant in do"ble the al"e of the property as stated in the affida it $ $ $ .@ 8ince the al"ation made by the petitioner has been disp"ted by the respondent, the lower co"rt sho"ld ha e determined first the act"al al"e of the properties. It was th"s an error for the said co"rt to appro e the bond, which was based merely on the probable al"e of the properties. A reple in bond is intended to answer for dama#es and to indemnify the defendant a#ainst any loss that he may s"ffer by