Case Digest: PCI LEASING & FINANCE, INC., v. SPOUSES GEORGE M. DAI and DIVINA DAI

PCI LEASING & FINANCE, INC., v. SPOUSES GEORGE M. DAI and DIVINA DAI

539 SCRA 9 (2007), 2ND DIVISION

Spouses George and Divina Dai, (Spouses Dai) obtained a loan from PCI Leasing and Finance, Inc., (PCI) for the sum of P3,352,892 payable in monthly installments of P152,265 for the financing of a vessel-fishing boat. To secure the payment of the loan, Spouses Dai executed a chattel mortgage over the vessel in favor of PCI Leasing.

Both the promissory note and the chattel mortgage provided that, in case of failure to pay the installments or interest due thereon, the entire amount remaining unpaid shall immediately become due and payable. Spouses Dai failed to pay the second and third installments. This prompted PCI a complaint of replevin before the Regional Trial Court (RTC). In their Answer, Spouses Dai claimed that, the possession of the vessel including its registration certificate had been surrendered to PCI before the filing of the complaint. Spouses Dai thus prayed for the award of damages and attorney‘s fees by way of Counterclaim.

The RTC of Cebu resolved both issues but did not award any damages for both parties. No appeal was filed by either parties making the decision final and executory. After more than a year, PCI filed another complaint for deficiency judgement and/or collection of sum of money before the Cebu RTC. In its complaint PCI alleged that there is still a deficiency of P961,000.00 as of January of 1995 and prayed for other damages.

ISSUE:

Whether or not the PCI LEASING INC. can still file a claim for deficiency of payment after a previous decision of the same facts and evidence has already been decided

HELD:

For res jusdicata to apply, four requisites must be met: (1) the former judgment or order must be final; (2) it must be a judgment or an order on the merits; (3) it must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and second actions, identity of parties, of subject matter and cause of action.

Replevin, broadly understood, is both a form of principal remedy and of a provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold it pendente lite. The action is primarily possessory in nature and generally determines nothing more than the right of possession. Replevin is so usually described as a mixed action, being partly in rem and partly in personam — in rem insofar as the recovery of specific property is concerned, and in personam as regards to damages involved. As an “action in rem,” the gist of the replevin action is the right of the plaintiff to obtain possession of specific personal property by reason of his being the owner or of his having a special interest therein.

PCI after realizing the amount of P2,000,000.00 from the proceeds of the foreclosure sale, could have prayed for a deficiency judgment in the same action as in fact it pursued its claim for attorney’s fees and liquidated damages therein, which claim was however, dismissed by the trial court. PCI, however, did not press any demand for such deficiency judgment in said case and instead filed this present suit for deficiency judgment long after the trial court rendered judgment in the earlier case. It cannot, however, evade the application of res judicata by varying the form of its action herein since the causes of action in the first case and in the present suit are clearly identical.