FILINVEST CREDIT CORPORATION, PETITIONER, VS. COURT OF APPEALS AND FELIX ANGELES, RESPONDENTS.

This is a petition for certiorari under Rule 65 of the Revised
Rules of Court to nullify the decision of the Court of Appeals in CA-G.R. No.
CV-15653 entitled “Felix Angeles v. Filinvest Finance and Leasing
Corporation, represented by its President.”

The case CA-G.R. No. CV-15653 of the Court of Appeals was an
appeal by Filinvest Finance & Leasing Corporation from the decision of the
Regional Trial Court, Branch 38, San Jose City, in Civil Case No. SJC-279. The Filinvest
Credit Corporation, petitioner herein, was a co-defendant in said civil case
but which did not appeal from
the decision. The Court of Appeals,
dismissed the complaint as against Filinvest Finance & Leasing Corporation
but held Filinvest Credit Corporation liable for all the damages due Felix
Angeles, private respondent herein. Hence, this petition under Rule 65 of the Revised Rules of Court.

There is no dispute that, as found by the Court of Appeals,
respondent Felix Angeles purchased from Armark Motor Works and Body Builders an
Isuzu passenger jeepney for P57,408.00, payable at a monthly installment of
P2,392.00. To secure payment, private
respondent executed a promissory note and a deed of chattel mortgage in favor
of the seller. The latter assigned the
promissory note and chattel mortgage of respondent Angeles to Filinvest Finance
& Leasing Corporation, which in turn, assigned them to Filinvest Credit
Corporation on December 7, 1983.

As respondent Angeles failed to either pay his installment
payments on time or pay the correct amount of the installments, the Filinvest
Credit Corporation filed an action for replevin in the Regional Trial Court,
Branch 42, Pampanga and had the passenger jeepney seized.

In turn, respondent Angeles filed on December 14, 1983, an action
for replevin to recover said vehicle with damages against Filinvest Finance and
Leasing Corporation with the Regional Trial Court, Branch 38, San Jose
City. FiIinvest Finance and Leasing
Corporation moved to dismiss the complaint, alleging, inter alia, that it had assigned the obligation of respondent Angeles to
Filinvest Credit Corporation and that it was not the party that seized the
vehicle.

After the trial court denied the motion to dismiss, respondent
Angeles moved on August 20, 1984 to amend the complaint, by impleading
Filinvest Credit Corporation as defendant and alleging that said party was the
one which committed the tortious act of wrongfully seizing the vehicle subject
of the replevin suit.

Paragraphs 4 and 5 of the complaint, as amended, read as follows:

“4.   That plaintiff had faithfully and religiously
paid his monthly installment/obligation to the defendant Philinvest (sic)
Credit Corporation as directed by the other defendant Philinvest (sic) Finance
& Leasing Corporation, from November, 1981 continuously up to December, 1983 as evidenced by receipts of the payment duly
issued by the defendant Philinvest (sic) Credit Corporation;

“5.   That on December 7, 1983 and without notice
to and/or (sic) knowledge of plaintiff, defendant Philinvest Credit
Corporation acting through its agents, unjustifiably repossessed and/or
seized through force and violence from defendant’s driver the aforedescribed
Isuzu passenger jeepney to the damage and
prejudice of the plaintiff”
(Rollo, p. 32).

After summons was served on Filinvest Credit Corporation, it
filed a motion to dismiss the amended complaint on the ground of respondent
Angeles’ failure to prosecute. The
motion to dismiss was denied. Filinvest Credit Corporation
thereupon filed its answer with counterclaim.

After trial, the Regional Trial Court, promulgated its decision
in favor of respondent Angeles. The dispositive portion of the decision reads as follows:

“WHEREFORE, this Court hereby renders judgment for the
plaintiff and against the defendant finding:

“1. That the
mortgaged vehicle, an Isuzu passenger type jeepney with Motor No. 494695,
Chassis No. SPMM-16-75-81-C, with all its accessories which defendant has forcibly taken from plaintiff’s driver be turned over to
the plaintiff, and should the turn over of the possession be impossible, to pay
the plaintiff the amount of P55,860.00 representing the amount paid by
plaintiff to the defendant;

2.      
Ordering the defendant to pay plaintiff the amount of
P20,000.00 for reasonable loss of earnings;

3.      
Ordering the defendant to pay plaintiff the amount of
P10,000.00 as moral damages;

4.      
Ordering the defendant Filinvest Credit Corporation to pay the plaintiff P10,000.00
for and as attorney’s fees;

5.      
To pay plaintiff the amount of P2,000.00 as litigation
expenses; and

6.      
To pay the cost
of suit” (Rollo, pp. 11-12; underlining supplied).

Believing that the decision only
ordered it to pay the sum of P10,000.00 for and as attorney’s fees, Filinvest
Credit Corporation did not appeal therefrom and just paid respondent Angeles
the sum of P10,000.00. Believing that it was the “defendant”
referred to in the decision, Filinvest Finance and Leasing Corporation
appealed.

The Court of Appeals adopted the findings of fact of the trial court but it specified that while the promissory
note and chattel mortgage in question were originally assigned to Filinvest
Finance and Leasing Corporation, the latter assigned its rights thereon to
Filinvest Credit Corporation. The Court
of Appeals also made explicit that it was
Filinvest Credit Corporation that unlawfully
seized the vehicle of respondent Angeles. The dispositive portion of the decision of the Court of Appeals
reads as follows:

“WHEREFORE, in view of the foregoing, defendant-appellant, FINANCE,
is pronounced to be without liability under the judgment appealed from. As to defendant CREDIT, who (sic) did not interpose any appeal, the judgment is AFFIRMED
with the modification that in case the
subject vehicle cannot be returned to plaintiff-appellee, the amount of
P56,358.00 representing the downpayment (P18,000.00) plus the
amount paid on the Promissory Note (P38,358.00, should be paid to
plaintiff-appellee” (Rollo, p. 45).

Filinvest Credit Corporation now comes to us, complaining that
the Court of Appeals cannot increase the amount of damages to be paid by it,
when neither it, as a co-defendant, nor respondent Angeles, as plaintiff,
appealed from the decision of the trial court, particularly the portion thereof
ordering “[t]he defendant
Filinvest Credit Corporation to pay the plaintiff P10,000,00 and as attorney’s fees.”

The comedy of legal errors started with the careless drafting of
the decision of the trial
court. The ambiguity of the decision,
which spawned the confusion, can be shown by reproducing it in full, as
follows:

“REPUBLIC OF THE PHILIPPINES

REGIONAL TRIAL COURT

THIRD JUDICIAL
REGION

BRANCH 38

SAN JOSE CITY

FELIX ANGELES,                                                                                                   Civil
Case No. SJC-279

Plaintiff,

– versus –

FILINVEST FINANCE &

LEASING
CORP. rep. by

its
President,

Defendant.

x – – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
– – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –
x

D E C I S I O N

“The present (sic) is for recovery of possession of an Isuzu
passenger jeep with damages filed by plaintiff against the defendant, the complaint alleging in essence, that plaintiff purchased
from Armark Motor Works and Body Builders an
Isuzu passenger jeepney at a cost price of P57,408.00 payable in two (2)
years at a monthly installment of P2,392.00, the installment to commence in
November 1981. To secure payment
plaintiff has (sic) executed a promissory note and a deed of chattel mortgage
in favor of Armark Motor Works and Body Builders executed (sic) a deed of
assignment of plaintiff’s obligation in favor of the defendant; despite
the monthly payments made by plaintiff to the defendant, without prior
notice to and knowledge of the former, the latter seized said jeepney to the
damage and prejudice of the plaintiff; plaintiff seeks to recover not only the possession of the jeepney but also
damages and attorney’s fees.

On April 25, 1984, the Court acting on defendant’s motion to
dismiss and the opposition filed thereto, has
denied (sic) the former’s motion, hence, on May 15, 1984, defendant
filed its answer admitting only paragraph 3
of plaintiff’s complaint and denied the rest thereof; it has set up
(sic) affirmative defenses of improper laying of venue; that defendant
is not the real party in interest and that plaintiff’s claim has been waived,
abandoned or has been extinguished. As
a final thrust, defendant
in its counterclaim seeks for damages, litigation expenses and
attorney’s fees.

On May 16, 1984, plaintiff filed a reply to defendant’s
counterclaim alleging that defendant’s claim for damages is baseless.

The pre-trial conference having been terminated, the hearing on the
merits commenced on August 17, 1984 until the submission of the case for decision on September 7, 1987.

Running through the gamut of plaintiff’s evidence are two main propositions:

First, that the term of
payments expressly stipulated in the promissory note has been waived amounting
to an amendment of the contract thru the acceptance by the defendant of
a lesser amount and defendant had tacitly acquiesced to delayed payments
amounting to a ratification of an amended contract.

Second, that the defendant having acquiesced in accepting
lesser and delayed payments has acted in bad faith when it forcibly took
possession of the mortgaged vehicle and disposed of it, hence, it should be
held accountable for the damages sustained by the plaintiff.

The terms of payments as expressly stipulated in the promissory
note, Exh. A on plaintiff’s theory has be been amended because:

1.    On three (3) different occasions
particularly in February 1982, April 1982 and May 1982, when the fourth, sixth
and seventh monthly installments became due and payable, instead of the defendant
availing of its right to foreclose the mortgage, have (sic) acquiesced in
accepting the delayed payments of the monthly amortizations as clearly shown by
O.R. No. 128297, Exh. B-1 for the month of January 1982; O.R. No. 060245, Exh.
B-2 for the month of March 1982; and O.R. No. 042685, Exh. B-4 for the month of
June 1982.

2.    That all of the amortizations paid by the
plaintiff and received by the defendant were duly receipted for by the defendant
as evidenced by official receipts, Exhs. B, B-1 to B-25, covering the months of
November 1981 up to December 1983, but for the months of February, April and
May 1982, and the said payments are lesser than what was originally and
expressly stipulated in the promissory note.

The Court subscribed to the theory of the plaintiff, otherwise, defendant
would, when the plaintiff failed to pay the first installment which fell due on
November 21, 1981 and when plaintiff made less payments on December 18, 1981
and on January 21, 1982 have foreclosed the mortgage. The continued acceptance of the plaintiff’s payments which were
very much lesser than what was previously and expressly stipulated in the promissory note and the number
of delayed payments, all the more, indicate a concrete revelation (sic) that
the contract between the herein parties as regards the manner or mode of
payments which benefited the defendant has been amended, amounting to an
implied ratification of the contract (Acuña vs. Batoc Producers Cooperative
Marketing Association, Inc., L-20333, June 30, 1967, SCRA 526). The desire of the plaintiff to live up to
and comply with the terms and conditions of the contract is show (sic) by his
payments, Exhs. B, B-1 to B-25 and indicative of the good faith of the
plaintiff in settling his obligations to the defendant. The acceptance of the partial payments by
the defendant constitutes an implied ratification of the amended terms
of payments which precludes a rejection of the amended terms of payment
(Federation of United Namarco Distributors, Inc. vs. National Marketing
Corporation, L-17819, March 31, 1962, 4 SCRA 867).

The defendant having tolerated and acquiesced in accepting
lesser and delayed payments has acted in utmost bad faith because:

1.    After having implied (sic) amended or
modified the express stipulation in the promissory note amounting to the
ratification of lesser payments without the benefit of notice and demand upon
the plaintiff in accordance with paragraph 4 of the Chattel Mortgage x x x, the
defendant forcibly took possession of the mortgaged vehicle and worst of
all, have sold the same to the damage and prejudice of the plaintiff.

The forcible taking of the mortgaged vehicle took place on December
7, 1983, by four persons who boarded the jeep being driven by Rolly Alcantara
along España Street in Manila while en route to Vito Cruz. Reaching the round table, they told
Alcantara that the jeep run (sic) over a child and Alcantara definitely sure
that there was no incident of said nature, has (sic) suggested to the four
persons that they see the owner of the jeep for any possibility that the other
driver could be responsible for it, but instead of heeding to Alcantara’s suggestion,
the four persons forced Alcantara to get-off the jeep with one of them poking
his gun against Alcantara and forced him to board the service car of the four
persons (t.s.n. R. Alcantara, October 10, 1985, pp. 16 to 18). Because of apprehension and nervousness
thinking that what transpired is a case of carnapping and to be the end of the
world for him, Alcantara lost consciousness and regained consciousness only in
San Fernando, Pampanga, where he was handed a piece of paper which he signed
having been asked to; at that point in time, Alcantara did not know the
whereabouts of the jeep (Ibid, pp. 23 and 24); Alcantara handed the document to
the plaintiff three days after the forcible taking of the same (Ibid, p. 19),
of which document, Exh. C, purports
to show that the mortgaged vehicle
was surrendered to the defendant, when in truth and in fact was forcibly
taken from Rolly Alcantara.

2.    The plaintiff unaware of the filing of Civil
Case No. 6807, Regional Trial
Court, Branch XLII, San Fernando,
Pampanga, on June 8, 1983, has made six more payments; P1,000.00 on August 8,
1983 under O.R. No. 034202, Exh. B-20; P1,000.00 on September 22, 1983 under
O.R. No. 002721, Exh. 003026, Exh. B-22; P1,000.00 on November 7, 1983 under
O.R. 003751, Exh. B-23; P2,000.00 on November 23, 1983 under O.R. No. 047722,
Exh. B-­25; and P1,000.00 on December 1, 1983 under O.R. No. 081062, Exh. B-24,
and the defendant in evident bad faith received said payments as shown
by said receipts, the latest of which payment was on December 1, 1983 without
informing plaintiff about the case it has filed. The total payments made by the plaintiffs amounted to P55,860.00
including the P18,000.00 which he has paid at the time of the delivery of the vehicle.

Anent this, the Court observes the undue advantage taken of by the defendant
against the plaintiff which is adhored by Article 19 and 22 of the Civil
Code. The act of receiving amortization
payments, especially to after the defendant has already filed Civil Case
No. 6807 is not consistent with justice and good faith and the principle of
unjust enrichment at the expense of another.

To justify the seizure of the vehicle, the defendant tried
to show that it has filed a replevin case before the Regional Trial Court,
Branch XLVII, San Fernando, Pampanga, docketed as Civil Case No. 6807 where the
Court has issued an Order authorizing the Sheriff or proper officer of that
Court to take custody of the mortgaged vehicle
but far short of showing any proof that the said order was carried out in compliance with Sections 4 and
8, Rule 60 of the Rules of Court. This,
to the mind of the Court, reveals the point that the seizure was not clearly
and indubitably shown in the Court’s order, Exh. B, defendant, and Exh. D, plaintiff:

“xxx it appearing that the issues are not yet joined despite
the fact that the complaint was filed
way back on June 8, 1983; let this case be, as it is hereby dismissed
without prejudice and without pronouncement as to costs.”

Clear to the Court is the fact that the mortgaged vehicle
is a passenger jeep and
being driven by Rolly Alcantara from 5:00 a.m. to 5:00 p.m. where the plaintiff
derives a daily net income of P130.00 in what is practiced and known as
boundary paid by Alcantara, aside from the income derived therefrom after 5:00
p.m. when he (plaintiff) purposely drives the vehicle (t.s.n. F. Angeles,
October 10, 1985, pp. 7 and 8). Evident, likewise, to negate the posture of the defendant that it has not taken the mortgaged vehicle
by force is a receipt, Exh. 1, defendant, which is Exh. C, plaintiff,
showing clearly and indubitably that the mortgaged vehicle was taken from
plaintiff’s driver Rolly Alcantara and not from the plaintiff. If there is truth in the receipt that the
vehicle was surrendered to the defendant, there is no need for Rolly
Alcantara to be brought to San Fernando, Pampanga.

From the foregoing, the Court has come to the following
conclusions:

1.    The mortgaged vehicle was forcibly taken
somewhere at the round table while en route to Vito Cruz, Manila, by four
persons one of whom poked his gun at plaintiff’s driver, Rolly Alcantara;

2.    That the plaintiff has been earning a net
income of P130.00 a day for a period of five (5) months when said jeep was
forcibly taken by the four persons who identified themselves as police officers
and has thus deprived the plaintiff of a legitimate earning from said jeepney;

3.    That the defendant has acted in
evident bad faith when it took the jeepney by force from the plaintiff’s driver
and when it still received the payments fully aware that as of June 8, 1983, it
has already instituted a case against the plaintiff at the RTC in San Fernando,
Pampanga;

4.    That the plaintiff having proven that he has
a right to the possession of the mortgaged vehicle must be restored in his
possession by virtue of Article 539 of the Civil Code; corollary thereto, he is
entitled to damages under Articles 19, 20, 23, 2199 and 2208, likewise, of the
Civil Code. His demand for damages
under Articles 19, 30 and 23 and attorney’s fees incidental to the filing of
this action is granted; and

5.    Defendant’s claim for damages,
attorney’s fees and litigation expenses, for lack of evidence cannot be
granted.

WHEREFORE, this Court hereby renders judgment for the plaintiff and
against the defendant finding: xxx” (Rollo, pp. 6-11; underlining supplied)

While there are two defendants in Civil Case No. SJC-279, the
Filinvest Finance and Leasing Corporation and
Filinvest Credit Corporation, the decision only mentioned a
“defendant” except in item 4 of the dispositive portion thereof, which referred to
“defendant Filinvest Credit Corporation.”

The title of the case as appearing in the decision only mentions
a defendant (“Felix Angeles, Plaintiff, versus Filinvest Finance Leasing Corporation, rep. by its President,
Defendant”).

We have examined the original record of Civil Case No. SJC-279 in
order to identify which of the
two defendants is the one referred to by the trial court every time it mentions
the “defendant” in its decision. The transcripts of the stenographic notes were not of much help because
the witnesses just referred to
“Filinvest.” The documentary evidence,
however, showed that while the promissory note executed by respondent Angeles in favor of Armark Motor Works
and Body Building was assigned to Filinvest Finance and Leasing Corporation
(Exh. A; also Exh. 2) the same note was reassigned by Filinvest Finance and
Leasing Corporation to Filinvest Credit Corporation (Exh. G; also Exh. 4). It also appears that respondent Felix had
been paying his amortizations to Filinvest Credit Corporation (Exh. B, B-1 to
B-24); that it was Filinvest Credit Corporation that filed the action for
replevin to recover the passenger jeepney from respondent Angeles in the
Regional Trial Court, Branch 42, San Fernando, Pampanga (Exh. D; also Exh. 1;
Exh. H, also Exh. 5); and that it was said defendant that forcibly seized the
said jeepney (Exh. J, also Exh. 6; Exh. I; also Exh. 7; Exh. K; also Exh. 8).

It was established
that Filinvest Finance and Leasing Corporation ceased to have interest in the
promissory note and the chattel mortgage executed by him. It was also established that it was
Filinvest Credit Corporation that was responsible for the wrongful seizure of
the jeepney subject of the chattel
mortgage.

All these facts
were known to the counsel of Filinvest Credit Corporation. They also knew to whom the trial court was
referring every time it mentioned “the defendant” in its decision.

The theory that the Court of Appeals cannot increase the damages
imposed by the trial court on petitioner herein, which was neither an appellant
nor an appellee in the appeal, is untenable. True, the general rule in appellate procedure is that the reversal of
the judgment on appeal is binding only on the parties in the appealed case and
cannot prejudice or benefit one who did not appeal or was not made a party to
the appeal (Facundo v. Pabalan, 4 SCRA 375 [1962]; Tropical Homes, Inc. v. Fortun, 169 SCRA 81 [1989]).

Implicit in the general rule is the reversal or modification of
the decision of the trial court by the appellate court. The rule therefore is not applicable in a
case where the appellate court does not reverse or modify the appealed decision but on the contrary, affirms and
clarifies it.

Due to the apparent ambiguity of the decision of the trial court,
the remedy of the two defendants was to ask
for a clarification from the trial court itself before interposing an
appeal. The trial court has
jurisdiction to clarify its own decisions even after their finality. (Locsin v. Paredes, 63 Phil. 87 [1936].

But inasmuch as the decision was appealed immediately to the
Court of Appeals, the said Court can clarify the ambiguity in the decision in
the course of resolving the assigned errors instead of remanding it to the
court of origin.

Where there is an ambiguity, a judgment shall be read in
connection with the entire record and construed accordingly. In such a case it is proper to consider the
pleadings and the evidence (Republic v. Delos Angeles, 41 SCRA 422
[1971]). This is what we, and
presumably the Court of Appeals, did.

WHEREFORE, the petition is DISMISSED, there being no grave
abuse of discretion on the part of the Court of Appeals.

SO ORDERED.

Cruz, (Chairman), Griño-Aquino, Davide, Jr., and Bellosillo, JJ., concur.