Servicewide v CA 1 Laus bought on credit a 4 door Sedan from Fortune Motors

Servicewide v ca 1 laus bought on credit a 4 door

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Servicewide v CA 1. Laus bought on credit a 4-door Sedan from Fortune Motors Corporation. She executed a PN to be payable within 48 months (4 years), monthly installment a. The contract had an acceleration clause. b. As security, she executed a chattel mortgage over the motor cehivle with a deed pf assignment within the mortgage deed so that the credit and mortgage rights will be assigned to Fortune Motoros Corp in favor of Filinvest Credit Corporation with the consent of Laus. c. The vehicle was registered under Laus’ name with the chattel mortgage annotated on the certificate of registration 2. Filinvest Credit Corp. assigned the credit in favor of Servicewide Inc. This transferred all their rights under the promissory note and chattel mortgage with the corresponding assignment sent to Laus. 3. Laus failed to pay the installments. Thus, Servicewide demanded payment of the entire outstanding balance but Laus still paid to pay nor surrender the vehicle.. 4. Thus, Servicewide instituted a complaint for replevin, impleading Tee and Dee whose had custody of the vehicle at the time the suit is filed. RTC approved the replevin. 5. Alberto Villafranca filed a 3 rd party claim contending that he is the absolute owner of the vehicle as evidenced by the Bureau of Land Transportations Certificate of Registration issued under his name. a. He claims to have acquired it from a certain Yan under a Deed of Sale and that he acquired it free of any lien or encumbrances. 6. RTC eventually ruled in favor of Villafranca and dismissed Servicewide complaint for insufficiency of evidence. a. Servicewide held that the suit for replevin aimed at the foreclosure of a 31
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chattel is an action quasi in rem, and doesn’t need the inclusion of the principal obligor in the complaint. 7. CA affirmed RTC ruling and said that there is no privity of contract between Servicewide and Villafranca, thus RTC was right in dismissing the case for insufficiency of evidence against Tee and Villafranca (Villafranca replaced Dee) since the evidence adduced pointed to Laus as the party liable for the obligation and not the former. ISSUE: WON a case for replevin can be pursued against Villfranca without impleading mortgagor Laus. NO, petition denied. 1. SC cited RRC Rule 60 where an applicant for replevin must show that he is the owner of the property claimed and must particularly describe the property seeking to be recovered, or show that they are entitled to the possession of it. The action only needs to be maintained against the person who possesses the property. 2. In a suit for replevin, a clear right of possession must be established. A foreclosure under a chattel mortgage may properly be commenced only if there is default on the part of the mortgagor to perform his obligations which is secured by the mortgage.
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