GR 120528; (January, 2001) (Digest)
G.R. No. 120528. January 29, 2001. ATTY. DIONISIO CALIBO, JR., petitioner, vs. COURT OF APPEALS and DR. PABLO U. ABELLA, respondents.
FACTS
Dr. Pablo Abella owned an agricultural tractor. In 1986, he left it in the safekeeping of his son, Mike Abella, in Tagbilaran City. Mike stored the tractor in the garage of a house he was leasing from Atty. Dionisio Calibo, Jr. Mike later incurred arrears in rent and utility payments for the leased premises. During a confrontation over these unpaid obligations, Mike informed Calibo that he would be vacating the property and offered the tractor as security for his debt, even asking Calibo to help find a buyer for it. Calibo later moved the tractor to his father’s garage. Despite several attempts, Calibo could not collect payment from Mike.
In November 1988, Pablo Abella came to claim the tractor. Calibo refused to release it, asserting it was pledged to secure Mike’s debt. Pablo offered partial payment via check but refused Calibo’s demand for a promissory note covering the full amount. No agreement was reached, prompting Pablo to file an action for replevin to recover possession of the tractor.
ISSUE
Whether a valid contract of pledge was constituted over the tractor, granting Calibo the right to retain possession until Mike Abella’s debts were paid.
RULING
No, there was no valid pledge. For a contract of pledge to be valid under Article 2085 of the Civil Code, the pledgor must be the absolute owner of the property pledged. The Court affirmed the findings of the lower courts that Mike Abella was not the owner of the tractor; it was owned by his father, Dr. Pablo Abella, who had left it with Mike merely for safekeeping. Since Mike was not the owner, he had no capacity to validly constitute a pledge over the property. Consequently, Calibo acquired no right to retain the tractor as security.
The Court also rejected Calibo’s alternative arguments. There was no implied agency under Article 1869, as Pablo Abella had no knowledge that Mike was acting on his behalf by offering the tractor as security. Article 1911 on apparent authority was inapplicable because Pablo did not allow Mike to act as if he had full powers. Finally, no contract of deposit existed under Article 1962, as the primary purpose was not safekeeping but securing a debt. Therefore, as the lawful owner, Pablo Abella was entitled to recover possession through the replevin action. The petition was denied.