G.R. No. 176768 ; January 12, 2009
GOLDEN (ILOILO) DELTA SALES CORPORATION, Petitioner, vs. PRE-STRESS INTERNATIONAL CORPORATION, ZEÑON SETIAS and JERRY JARDIOLLIN, Respondents.

FACTS

Petitioner Golden (Iloilo) Delta Sales Corporation (Golden Delta), a domestic corporation engaged in selling hardware and construction materials, supplied respondent Pre-Stress International Corporation (PSI) with construction materials on credit starting in 1990. In March 2000, for convenience, Golden Delta alleged that PSI officers offered to let it store its construction materials at the PSI compound in Pavia, Iloilo. Golden Delta accepted, storing its stocks, trucks, forklifts, and equipment there, and assigned its own personnel to manage withdrawals by customers via withdrawal slips issued from its main office.
In December 2001, Golden Delta decided to resume operations at its own warehouse in Dungon A, Jaro, Iloilo City, after its lessee there terminated the lease. While retrieving its materials from the PSI compound, Golden Delta’s employees were prevented by PSI guards from withdrawing the remaining stocks, allegedly upon instructions of respondent Jerry Jardiolin. Despite demands, PSI refused release. On December 7, 2001, PSI informed Golden Delta it could retrieve two trucks left at the compound, but Golden Delta found them empty on the highway outside, with one truck’s cargo missing.
Golden Delta filed a Complaint for Recovery of Personal Property with Prayer for Replevin with Damages before the Regional Trial Court (RTC) of Iloilo City, alleging unlawful taking of its personal properties. It prayed for seizure of the properties or payment of P3,885,750.69, plus damages. The RTC dismissed the complaint, ruling Golden Delta failed to prove ownership or entitlement to possession, and found no storage agreement; instead, it concluded the materials belonged to Jardiolin. The RTC also suggested the suit was motivated by personal vendetta, noting testimony from Imee Vilches (Cembrano’s former girlfriend and PSI’s consultant) that Cembrano was jealous of Jardiolin.
Golden Delta appealed to the Court of Appeals (CA), which initially affirmed the RTC but later, upon motion for reconsideration, reversed itself in an Amended Decision. The CA found Golden Delta proved ownership through evidence like delivery receipts, invoices, and withdrawal slips, and ruled respondents unlawfully detained the materials. The CA ordered respondents to return the materials or indemnify Golden Delta P3,338,750, with interest. Respondents then appealed to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in reversing the RTC and ruling that Golden Delta proved ownership and entitlement to possession of the construction materials, thereby warranting recovery through replevin.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Amended Decision of the Court of Appeals.
The Court held that Golden Delta sufficiently established ownership and possession of the construction materials. Evidence included:
1. Delivery receipts and invoices showing materials were purchased by Golden Delta from suppliers and delivered to the PSI compound.
2. Withdrawal slips issued to customers, recorded by Golden Delta personnel at the compound, proving its control over the stocks.
3. Testimonies and documentary evidence indicating Golden Delta stored materials at the PSI compound with respondents’ consent, and that respondents later refused release.
The Court rejected respondents’ claim that the materials belonged to Jardiolin, noting Jardiolin failed to provide conclusive proof of ownership, such as sales invoices or receipts showing he purchased the materials. The Court also dismissed the RTC’s reliance on Imee Vilches’ testimony about Cembrano’s jealousy as irrelevant to the issue of ownership.
On the replevin action, the Court ruled Golden Delta complied with Rule 60 requirements: it showed a right to possession based on ownership, and that respondents unlawfully detained the materials after initially allowing storage. The Court emphasized that possession by respondents was merely tolerated, and their subsequent refusal to release the materials constituted unlawful detention.
Thus, the Supreme Court upheld the CA’s order for respondents to return the materials or indemnify Golden Delta P3,338,750, with legal interest from the filing of the complaint until finality, and 12% interest thereafter until satisfaction.