G.R. No. L-32674 February 22, 1973
NORTHERN MOTORS, INC., petitioner, vs. HON. AMEURFINA MELENCIO HERRERA, Judge of the Court of First Instance of Manila, Br. XVII, and RALPH R. TAGUBA, respondents.

FACTS

Petitioner Northern Motors, Inc. filed a complaint for replevin against respondent Ralph Taguba. The complaint alleged that Taguba executed a promissory note and a chattel mortgage over a 1966 Impala sedan to secure the debt. Upon Taguba’s default in paying several installments, Northern Motors elected to extrajudicially foreclose the mortgage. It demanded the vehicle’s delivery, but Taguba refused. Northern Motors then filed the replevin action, attaching the required bond and an affidavit, praying for a writ to seize the car and, after hearing, to be adjudged its rightful possessor or, alternatively, for payment of the unpaid balance.
The respondent judge denied the application for a writ of replevin. The court held the supporting affidavit insufficient because it showed Northern Motors was not the owner of the vehicle, merely a mortgagee, and thus not entitled to possession merely due to default. The judge also ruled that a mortgagee’s right to possession in a replevin action is only for the purpose of delivering the chattel to a public officer for foreclosure sale. Since the complaint lacked an allegation that a public officer had been requested to foreclose and was refused the chattel, the writ could not issue. The court further suggested the prayer to be adjudged rightful possessor could lead to an automatic appropriation of the property, potentially violating Article 2088 of the Civil Code prohibiting pacto commissorio.

ISSUE

Whether the respondent judge committed a grave abuse of discretion in denying the petitioner’s application for a writ of replevin.

RULING

Yes, the respondent judge committed grave abuse of discretion. The Supreme Court reversed the challenged orders. First, a chattel mortgagee has a special right of property and may maintain a replevin action to recover possession of the mortgaged chattel upon the mortgagor’s default, especially when the mortgage contract authorizes the mortgagee to take possession. The mortgagee’s right to possession arises from the default and the terms of the contract, not from a prior request to a public officer. The procedure required by the lower court—that the mortgagee must first request a sheriff to foreclose and be refused—is unnecessary and an exercise in futility. The sheriff’s duty to take custody arises from a court order under Rule 60, not from a private request.
Second, the action does not constitute a prohibited pacto commissorio. Article 2088 prohibits stipulations that automatically transfer ownership of the mortgaged property to the creditor upon the debtor’s default. Here, Northern Motors elected to extrajudicially foreclose the mortgage. Its replevin action is a preliminary step to gain possession for the purpose of a public foreclosure sale, not for automatic appropriation. The alternative prayer for payment of the debt further negates any intent for automatic ownership transfer. The remedies sought—foreclosure or fulfillment of the obligation—are anathema to the concept of pacto commissorio. Therefore, the writs of certiorari and mandamus were granted, the orders were set aside, and the lower court was commanded to issue the writ of replevin.