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SERG’S PRODUCTS v. PCI LEASING

FACTS:

The case involves a Petition for Review on Certiorari assailing the decision of the Court of Appeals (CA) in a Civil Case. The Regional Trial Court (RTC) issued a Writ of Seizure, which was later affirmed by the CA. The undisputed facts are as follows: On February 13, 1998, respondent PCI Leasing and Finance, Inc. (PCI Leasing) filed a complaint for a sum of money and applied for a writ of replevin. The RTC issued a writ of replevin, directing the sheriff to seize and deliver the machineries and equipment to PCI Leasing. The sheriff seized one machinery and planned to return for the other machineries. The petitioners filed a motion for special protective order, arguing that the properties were immovable as defined in the Civil Code. PCI Leasing opposed the motion, maintaining that the properties were still personal subject to seizure. The sheriff attempted to seize the remaining properties but was prevented by the workers. The petitioners then filed a petition for certiorari with the CA. The CA held that the subject machines were personal property based on the agreement of the parties. The CA also ruled that the issues raised in the petition were proper subjects of a full-blown trial before the RTC. Hence, this petition before the Supreme Court.

ISSUES:

  1. Whether or not the machines in question are considered personal or immovable property.

  2. Whether the contract between the parties is a loan or a lease.

RULING:

  1. The machines in question are considered personal property and are proper subjects of a writ of replevin. After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable, a party is estopped from subsequently claiming otherwise.

  2. The Court will not rule on the validity of the contract and whether it is a loan or a lease at this stage. The validity of the contract is a matter for the trial court to determine.

PRINCIPLES:

  • After agreeing to a contract stipulating that a real or immovable property be considered as personal or movable, a party is estopped from subsequently claiming otherwise.

  • The validity of a contract is a matter for the trial court to determine.