LAND BANK OF THE PHILIPPINES, PLAINTIFF-APPELLEE, VS. SEAIR, INCORPORATED & JOHN DOE, DEFENDANTS-APPELLANTS.

Before Us is an appeal from the September 27, 2012 Decision
(Rollo, pp. 38-51) of the Regional Trial Court (RTC) of Angeles City,
Branch 58, in Civil Case No. 9159, the dispositive portion of which
reads as follows:

“WHEREFORE, in view of the foregoing disquisition, judgment is hereby rendered as follows:

On the original complaint of LAND BANK OF THE PHILIPPINES as against defendant SEAIR, INC.:

1. Ordering defendant SEAIR, INC. to pay plaintiff
   LAND BANK OF THE PHILIPPINES the amount of
   THREE HUNDRED FORTY TWO THOUSAND PESOS (P342,000.00)
   representing the value of the subject motor vehicle;
2. Ordering defendant SEAIR, INC. to pay plaintiff LAND
   BANK OF THE PHILIPPINES the amount of FIVE
   THOUSAND SEVEN HUNDRED SEVENTEEN PESOS AND
   58/100 CENTAVOS (P5,717.58) representing filing
   fees and premium paid for the replevin bond; and
3. Ordering defendant SEAIR, INC. to pay plaintiff the
   amount equivalent to 25% of the total amount due and
   demandable as reasonable attorney’s fees;

Defendant SEAIR, INC. counterclaim is dismissed for lack of merit.

On the third party complaint of defendant/third party plaintiff
SEAIR, INC. as against third party defendant Edgardo Manuel Decena:

1. Ordering third party defendant Decena to pay defendant/
   third party plaintiff SEAIR, INC., the amount of
   THREE HUNDRED FORTY TWO THOUSAND PESOS
   (P342,000.00) representing the value of the subject
   motor vehicle, having used the same for his own and personal
   benefit;

2. Ordering third party defendant Decena to
   pay defendant/third party plaintiff SEAIR, INC., the amount
   of FIVE THOUSAND SEVEN HUNDRED SEVENTEEN PESOS AND
   58/100 CENTAVOS (P5,717.58) representing filing fees
   and premium paid for the replevin bond; and

3. Ordering third party defendant Decena to
   pay defendant/third party plaintiff SEAIR, INC., the amount
   equivalent to 25% of the total amount due and
   demandable as reasonable attorney’s fees.

Third Party Defendant Edgardo Manuel Decena’s counterclaim is dismissed for lack of merit.

SO ORDERED” (Rollo, pp. 50-51).

The instant case arose from a Complaint for Replevin plus damages
filed by plaintiff-appellee Land Bank of the Philippines (Land Bank)
against defendants-appellants Seair, Incorporated (Seair) and John Doe.

Records would show that in July 1996, plaintiff-appellee Land
Bank became the assignee of a certain Promissory Note with Chattel
Mortgage in the principal amount of Php760,848.00 executed by
defendant-appellant Seair in favor of Carworld, Incorporated (Carworld)
covering one (1) unit of motor vehicle (1996 Mitsubishi Lancer 1600) 4
DR with Motor No. 4G92A-B5387 and Serial No. CB4ASR-03083 under a
dealer-generated transaction. Pursuant to the said transaction,
Carworld (the dealer) would sell on installment basis a motor vehicle to
defendant-appellant Seair, and Carworld then would assign its rights
to plaintiff-appellee Land Bank, which in turn, will assume
responsibility in collecting the amortization from Seair. As a result
thereof, an auto loan was obtained by defendant-appellant Seair from
plaintiff-appellee Land Bank.

The said promissory note is
payable in forty-eight (48) monthly installments amounting to
Php15,851.00, inclusive of interest, commencing on August 30, 1996.
However, defendant-appellant Seair defaulted in the payment of its loan
obligation under the terms and conditions set forth in the promissory
note with chattel mortgage, such that the unpaid amount become due and
demandable. This failure of defendant-appellant Seair, prompted
plaintiff-appellee Land Bank to demand the presentation of the subject
motor vehicle for inspection and appraisal.

Several demand
letters were sent by plaintiff-appellee Land Bank to defendant-appellant
Seair for the latter to pay in full the outstanding loan obligation or
in the alternative, to deliver/surrender the mortgaged motor vehicle for
the purpose of foreclosure. Said demands however, were not heeded by
defendant-appellant Seair such that plaintiff-appellee Land Bank was
constrained to file the instant complaint for replevin with damages
against defendant-appellant Seair and a John Doe, with a prayer for the
payment of the sum of money for the value of the vehicle should the same
be not returned.

On January 4, 1999, defendant-appellant Seair
filed its Answer with Affirmative and Special Defenses and Counterclaim
(Records, pp. 70-73) alleging therein that on July 3, 1996, Ramona Lopez
Ty executed the said promissory note without the consent and authority
of the Board of Directors of defendant-appellant Seair. Without the
authority of the Board of Directors through a valid and legal
resolution, the act of Ramona Lopez Ty in entering into a contract of
indebtedness shall not be binding upon defendant-appellant Seair as it
is ultra vires and contrary to the mandate of the Corporation Code.

Thereafter, defendant-appellant Seair filed a Motion for Leave
of Court to file a Third Party Complaint. In the Order dated January
22, 1999, summons was ordered issued upon Third Party defendant Espilo
Leyco, Jr. who signed as a co-maker of the promissory note. Thereafter,
third-party defendant Leyco, Jr. filed his Answer with Counterclaim and
Motion to Dismiss (Records, pp. 112-117). On July 14, 1999,
defendant-appellant Seair filed a Motion (Records, pp. 149-151) alleging
that the subject motor vehicle is in the possession of one Edgar Manuel
Decena thereby making the latter an indispensable party.
Defendant-appellant Seair, then prayed that the John Doe in the
complaint filed by plaintiff-appellee Land Bank be changed into the name
of Edgardo Manuel Decena. Defendant-appellant Seair (at its own
instance) amended its Third-Party Complaint this time impleading Edgar
Manuel Decena and his spouse as Third-party defendants. Third-party
defendants Edgar Manuel Decena and his spouse filed their Answer to the
Amended Third Party Complaint. Meanwhile, a Compromise Agreement
(Records, pp. 260-261) was submitted by defendant-appellant Seair (as
third-party plaintiff) and third-party defendant Espilo Leyco, Jr.

Pre-trial was conducted after which trial on the merits ensued wherein
both original parties (plaintiff-appellee Land Bank and
defendant-appellant Seair) presented their respective documentary and
testimonial evidence. Third-party defendant Edgar Manuel Decena failed
to present his evidence and his right to present the same was considered
as waived.

On September 27, 2012, the RTC of Angeles City issued
the now appealed Decision, finding for plaintiff-appellee Land Bank and
ordering defendant-appellant Seair to pay a certain amount representing
the value of the motor vehicle, the filing fees and premium paid for
the replevin bond and attorney’s fees. The RTC likewise ruled in favor
of third-party plaintiff Seair and ordered third-party defendant Manuel
Edgar Decena to pay a certain amount representing the value of the motor
vehicle, the filing fees and premium paid for the replevin bond and
attorney’s fees. The dispositive portion of the RTC’s decision is
reproduced in full at the early part of this decision.

Dissatisfied, defendant-appellant Seair filed an appeal under Rule 41 of
the 1997 Rules of Civil Procedure and raised the following issues for
this Court’s consideration:

1. SHOULD DEFENDANT-APPELLANT INC. BE HELD LIABLE FOR ULTRA VIRES ACTS COMMITTED BY RAMONA LOPEZ TY?
2. SHOULD DEFENDANT-APPELLANT, INC. BE HELD LIABLE FOR THE NEGLIGENCE OF THE PLAINTIFF-APPELLEE?
3. SHOULD DEFENDANT-APPELLANT BE AWARDED MORAL, EXEMPLARY DAMAGES AND ATTORNEY’S FEES? (See: Rollo, p. 25)

The case at bar is an action for replevin with damages. For a
writ of replevin to issue, all that the applicant must do is to file:
(1) an affidavit showing that (a) he/it is the owner/ is entitled to the
possession of the property claimed, (b) the property is wrongfully
detained by the adverse party, (c) the property 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, (d) the actual market value of the
property and (2) a bond double the value of the property as stated in
the affidavit (See: Section 2, Rule 60 of the 1997 Rules of Court; Navarro vs. Escobido, 606 SCRA 1, 21 [2009]).

All the aforesaid requisites were complied with by
plaintiff-appellee Land Bank (See: Records, pp. 15-16; 18-20). As
things stand, there is no dispute with regard to the existence of a loan
obligation as evidenced by the Promissory Note with Chattel Mortgage
executed by defendant-appellant Seair in favor of the dealer Carworld
and assigned to plaintiff-appellee Land Bank. There is also no question
as regards the fact of non-payment of said loan obligation which
prompted plaintiff-appellee Land Bank to foreclose the chattel mortgage.
Thus, being an unpaid mortgagee, plaintiff-appellee Land Bank is
entitled to the delivery thereof and has the right to possess the
subject motor vehicle.

Defendant-appellant Seair, for its part,
raised the defense that Ramona Lopez Ty, as President of Seair, was not
armed with any authority to contract an auto loan. It denied the
validity of the Secretary’s Certificate used by Ramona Lopez Ty to
obtain the said loan. It claimed that the signatory of the said
Secretary’s Certificate, a certain Ligaya Garcia, does not exist and she
was not even appointed by the Board as the Corporate Secretary of
Seair. By averring those defenses, the burden of proof to show that
indeed Ramona Lopez Ty is not authorized and the Secretary’s Certificate
is a bogus, is now shifted to defendant-appellant Seair. Thus, it is a
rule on evidence that he who alleges has the burden of proving his
allegation by preponderance of evidence or greater weight of credible
evidence (See: Dela Llana vs. Biong, G.R. No. 182356, December
4, 2013). The reason for this rule is that bare allegations,
unsubstantiated by evidence, are not equivalent to proof (ibid.). In short, mere allegations are not evidence (ibid.).

Defendant-appellant, however, failed to discharge the said
burden. It failed to prove by preponderance of evidence the invalidity
of the Secretary’s Certificate and the lack of authority of the said
Ligaya Garcia to issue the same as well as the lack of authority of
Ramona Lopez Ty to contract a loan obligation. There were two
Secretary’s Certificate adduced by plaintiff-appellee Land Bank as
evidence: (1^st) is the one that certifies the election of
Ramona Lopez Ty as the President and Ligaya Garcia as the Corporate
Secretary (See: Secretary’s Certificate, Records, pp. 464-465); (2^nd)
is the one that is issued by Ligaya Garcia certifying that in a special
board meeting held on July 1, 1996, it was resolved by the Board that
its President Mrs. Ramona Lopez Ty is authorized to negotiate with
Carworld for the purchase of 5 corporate vehicle which will be financed
by plaintiff-appellee Land Bank.

What further bolstered the two
Certificates’ authenticity and due execution is the fact that it was
duly acknowledged before a notary public, with the 1st Secretary
Certificate being on file with the Securities and Exchange Commission
(SEC). Having been notarized, the said Certificates are public
documents, thus accorded the benefit of certain presumptions. As held by
the Supreme Court:

“Being a public document, it enjoys the presumption of regularity. It is a prima facie
evidence of the truth of the facts stated therein and a conclusive
presumption of its existence and due execution. To overcome this
presumption, there must be clear and convincing evidence. Absent such
evidence, as in this case, the presumption must be upheld” (Chua vs. Westmont Bank, 667 SCRA 56, 66 [2012]).

The authority of Ramona Lopez Ty and Ligaya Garcia, as Seair’s
President and Corporate Secretary, respectively, being affirmed by the
above-mentioned (1^st) Secretary’s Certificate, plaintiff-appellee Land Bank cannot be faulted for now relying on the notarized (2^nd)
Secretary’s Certificate (Records, p. 276) issued by Corporate Secretary
Ligaya Garcia for the specific purpose of purchasing a motor vehicle
which will be financed by plaintiff-appellee Land Bank. Thus,
defendant-appellant Seair is now precluded to deny any liability under
the promissory note with chattel mortgage entered into by its President
who is armed with sufficient authority to negotiate with Carworld for
the purpose of purchasing and acquiring motor vehicles.

This
Court is also in concurrence with the findings of the RTC when it gave
favorable ruling to the Third party Complaint filed by
defendant-appellant Seair against third-party defendant Edgardo Manuel
Decena (Decena). It appears on record that Decena was in possession of
the subject motor vehicle, thus impleading him in this suit for
replevin through a third party complaint is proper. Thus:

“Section 12. Third-party complaint. — A third-party complaint is
a claim that a defending party may, with leave of court, file against a
person not a party to the action, called the third-party defendant, for
contribution, indemnity, subrogation or any other relief, in respect of
his opponent’s claim.”

Records would show that third-party defendant Decena was the
former Vice President for Finance and Administration of
defendant-appellant Seair. The RTC found as per Decena’s Letter to the
Chairman of Seair that he is indeed in possession of the subject motor
vehicle (See: Letter dated August 18, 1998, Records, p. 350). It was
disclosed in the said letter that Decena’s refusal to surrender the
vehicle is brought about by the fact that he already paid 9 monthly
amortizations and he believes that he is entitled to the reimbursement
of the amount he paid before he surrenders the said vehicle. After
paying the said amortizations, Decena defaulted in his succeeding
installment payments. Despite his cessation from his employment with
Seair and his default in payment thereof, he continues to use the said
motor vehicle for his own personal use. Demands for the surrender of
the said motor vehicle were made by both plaintiff-appellee Land Bank
and defendant-appellant Seair (Records, p. 348), but third-party
defendant Decena refused to do so even if he has no right to retain the
same. Having failed to return the possession of the subject motor
vehicle despite several demands made against him, then third-party
defendant Decena should be made liable to reimburse defendant-appellant
Seair for whatever damages the latter had sustained by reason of the
present action, particularly the value of the motor vehicle
(Php342,000.00 as claimed by plaintiff-appellee Land Bank), the filing
fees and the premium paid for the replevin bond (P5,717.58) and 25% of
the total amount due as attorney’s fees as stipulated in paragraph 8 of
the promissory note.

Hence, We see no error on the part of the
RTC when it decided in favor of plaintiff-appellee Land Bank as well as
third party plaintiff-appellant Seair.

WHEREFORE, the appeal is DISMISSED.
The appealed Decision dated September 27, 2012 of the Regional Trial
Court of Angeles City, Branch 58, in Civil Case No. 9159 is AFFIRMED but MODIFIED as follows:

“Premises considered, judgment is hereby rendered in favor of
plaintiff-appellee Land Bank of the Philippines (LAND BANK), declaring
said plaintiff-appellee (LAND BANK) as the lawful owner of the subject
motor vehicle (1996 Mitsubishi Lancer 1600) 4 DR with Motor No.
4G92A-B5387 and Serial No. CB4ASR-03083 and ordering defendant-appellant
SEAIR to deliver to LAND BANK Bank the aforesaid motor vehicle complete
with all the accessories installed therein plus 25% of the outstanding
obligation as attorney’s fees and Php5,717.58 as filing fees and
premium paid for the replevin bond. Should for any reason, SEAIR cannot
effect manual delivery of the said motor vehicle to LAND BANK, SEAIR is
ordered to pay LAND BANK the value of said car in the amount of
Php342,000.00 plus 25% of the outstanding obligation as attorney’s fees
and Php5,717.58 as filing fees and premium paid for the replevin bond.

Third-party defendant EDGARDO MANUEL DECENA, on the other hand,
is ORDERED to reimburse SEAIR of all the damages it sustained by reason
of the present suit, particularly Php342,000.00 representing the value
of the subject motor vehicle; Php5,717.58 representing filing fees and
premium paid for the replevin bond and 25% of the total amount due and
demandable as attorney’s fees.”

SO ORDERED.

Lopez and Inting, JJ., concur.