ROMEO F. EDU, IN HIS CAPACITY AS COMMISSIONER OF LAND TRANSPORTATION, EDUARDO DOMINGO, CARLOS RODRIGUEZ AND PATRICIO YAMBAO IN THEIR CAPACITY AS ANCAR AGENTS, PETITIONERS, VS. H…

Edu versus Abello

The Case

This is a petition brought by Romeo Edu, in his capacity as Commissioner of Land Transportation, together with Eduardo Domingo, Carlos Rodriguez, and Patricio Yambao, who were agents of the Anti-Carnapping Unit of the Philippine Constabulary detailed with the Land Transportation Commission, against Lucila Abello. The petitioners ask the Supreme Court to set aside the orders of a trial court that had allowed a car in their custody to be seized and delivered to Abello in a replevin action. The case matters because it fixes the rule that a purchaser in good faith of a movable property is protected in his possession as if he were the true owner, and it limits the power of the Land Transportation Commissioner to seize motor vehicles to the enforcement of the statutory lien for unpaid registration fees.

Procedural History

On February 15, 1971, Lucila Abello filed a complaint for replevin with damages before the then Court of First Instance of Manila, impleading the petitioners and praying that the sheriff or other proper officer be ordered to take the motor vehicle into custody. On February 18, 1971, the respondent judge issued the order for the seizure of the personal property. Finding for the private respondent, the trial court upheld the seizure as being in accordance with the law on replevin and held that the defendants' remedy was to put up a counter-bond in the same amount as the plaintiff's bond. The petitioners then elevated the matter to the Supreme Court by petition, and the Court resolved it in this decision.

Facts

The subject of the controversy is a 1968 model Volkswagen bantam car, allegedly owned by Lieutenant Walter Bala of Clark Airbase, Angeles City, and registered in his name on May 19, 1970 at the Angeles City Land Transportation Commission Agency. On August 25, 1970, the Office of the Commission on Land Transportation received a report from the Manila Adjustment Company that the car had been stolen on June 29, 1970 from the residence of Lieutenant Bala in Angeles City.

On February 2, 1971, the Anti-Carnapping Unit agents recognized the car in the possession of Lucila Abello and immediately seized and impounded it as stolen property. Commissioner Edu likewise seized the car, invoking Section 60 of Republic Act 4136, which empowers him to seize a motor vehicle for delinquent registration, aside from what the petitioners described as his implicit power to seize motor vehicles fraudulently or otherwise not properly registered.

The trial court found that Abello had acquired the car by purchase from its registered owner, Marcelino Guansing, for the consideration of 9,000 pesos, under a notarial deed of absolute sale dated August 11, 1970, and that she had been in possession since then until February 3, 1971, when the car was seized from her by the petitioners, who acted in the belief that it was the car originally registered in the name of Lieutenant Bala.

Issues

• Whether or not the purchaser in good faith of a chattel is entitled to be respected and protected in his possession as if he were the true owner until a competent court rules otherwise.
• Whether or not the pendency of a criminal charge that the chattel was illegally obtained from its true owner by the transferor of the bona fide possessor warrants disturbing the possession of the chattel against the will of the possessor.
• Whether or not the Commissioner of Land Transportation may seize and impound the motor vehicle under Section 60 of Republic Act 4136.

Applicable Provisions

Section 60 of Republic Act 4136, the provision invoked by the petitioners and construed by the Court, provides:

Section 60. The lien upon motor vehicles. Any balance of fees for registration, re-registration or delinquent registration of a motor vehicle, remaining unpaid and all fines imposed upon any vehicle owner, shall constitute a first lien upon the motor vehicle concerned.

The Court read this provision as confining the Commissioner's right to seize and impound to the proper enforcement of the lien upon motor vehicles, and not as a general authority to take a vehicle from a possessor in good faith.

Ruling

On the first issue, the Court held that there is no merit in the petition, because the acquirer or purchaser in good faith of a chattel or movable property is entitled to be respected and protected in his possession as if he were the true owner until a competent court rules otherwise. In the meantime, as the true owner, the possessor in good faith cannot be compelled to surrender possession nor be required to institute an action for the recovery of the chattel, whether or not an indemnity bond is issued in his favor.

On the second issue, the Court held that the filing of an information charging that the chattel was illegally obtained through estafa from its true owner by the transferor of the bona fide possessor does not warrant disturbing the possession of the chattel against the will of the possessor.

On the third issue, the Court held the petitioners' claim untenable. It stressed that the Commissioner's right to seize and impound the property is only good for the proper enforcement of the lien upon motor vehicles, and that the Land Transportation Commission may issue a warrant of constructive or actual distraint against a motor vehicle only for the collection of unpaid fees for registration, re-registration, or delinquent registration.

Doctrine

A purchaser in good faith of a chattel or movable property is protected in his possession as if he were the true owner until a competent court rules otherwise, and he cannot be compelled to surrender possession nor required to bring an action for recovery, whether or not an indemnity bond is issued in his favor. The filing of a criminal information alleging that the chattel was illegally obtained from its true owner by the transferor does not justify disturbing the possession of the bona fide possessor against his will. The power of the Commissioner of Land Transportation under Section 60 of Republic Act 4136 is limited to enforcing the first lien for unpaid registration fees and fines, through a warrant of constructive or actual distraint, and does not extend to seizing a vehicle from a possessor in good faith on the mere report that it was stolen.

Disposition

The petition was denied, and the orders of the trial court allowing the seizure and delivery of the car to Lucila Abello were left undisturbed.

Remember This

The one line to memorize is that a purchaser in good faith of a chattel is protected in his possession as if he were the true owner until a competent court rules otherwise. Examiners use this case to test the limits of the Commissioner's seizure power under Section 60 of Republic Act 4136 and the protection accorded to a bona fide possessor of movable property.