G.R. No. 193426 , September 29, 2014
SUBIC BAY LEGEND RESORTS AND CASINOS, INC., Petitioner, vs. BERNARD C. FERNANDEZ, Respondent.

FACTS

Petitioner Subic Bay Legend Resorts and Casinos, Inc. operates the Legenda Hotel and Casino in the Subic Bay Freeport Zone. Respondent Bernard C. Fernandez filed a complaint for recovery of a sum of money with damages. The case stemmed from an incident on June 13, 1997, when respondent’s brothers, Ludwin and Deoven Fernandez, went to the casino. Respondent claimed he gave them casino chips worth US$6,000.00, which belonged to him, to use at the casino. Petitioner’s surveillance staff, having previously noted Ludwin’s unusual use of dollar-denominated chips, monitored the brothers. After they played and attempted to encash chips, the cashiers froze the transaction. Petitioner’s security officers accosted Ludwin and Deoven, escorted them to private rooms, and separately interrogated them for about seven hours without food or sleep, demanding they confess that the chips were given by a casino employee, Michael Cabrera. The brothers eventually executed a joint statement implicating Cabrera, which they later recanted. Petitioner confiscated chips equivalent to US$5,900.00 and refused to return them despite demand. Petitioner alleged the chips were stolen property, acquired through Cabrera, and thus it had the right to retain them.

ISSUE

The primary issue is whether respondent is the lawful owner of the confiscated casino chips worth US$5,900.00, thereby entitling him to their return, and whether the award of attorney’s fees is proper.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court held that respondent, as possessor of the chips, enjoyed the presumption of ownership under Article 559 of the Civil Code. His testimony that he acquired the chips as payment for car services rendered was credible and unrebutted. Petitioner failed to prove its claim that the chips were stolen property. The recanted joint affidavit of Ludwin and Deoven was inadmissible as it was obtained in violation of their constitutional rights—through duress, deprivation of sleep, and without counsel. Petitioner’s failure to file any criminal case regarding the alleged theft further weakened its claim. The Court also upheld the award of attorney’s fees, as petitioner acted in bad faith by unjustly refusing to return the chips and falsely accusing respondent of dealing in stolen property. The chips were ordered returned, or their equivalent value in Philippine Pesos at the 1997 exchange rate of ₱38.00 to US$1.00.