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LORETA SERRANO v. CA

FACTS:

Loreta Serrano purchased jewelry from Niceta Ribaya for P48,500. She needed money and instructed her private secretary, Josefina Rocco, to pawn the jewelry at Long Life Pawnshop for P22,000. However, Josefina took the money and the pawn ticket and absconded. Three months later, Gloria Duque and Amalia Celeste informed Niceta Ribaya about a pawnshop ticket being offered for sale that may cover the jewelry Loreta bought. Niceta suspected that the ticket was for her missing jewelry, so she informed Loreta and suggested that she verify it at the pawnshop. Loreta claimed to have gone to the pawnshop and confirmed that her missing jewelry was indeed pledged there, and she instructed the owner not to allow anyone to redeem it. On the same day, Loreta reported the loss to the police. Detective Oswaldo Mateo also claimed to have visited the pawnshop, showed the owner Loreta's police report, and left a note asking him to hold the jewelry and inform the police if it gets redeemed. However, the owner allowed someone to redeem the jewelry using the pawnshop ticket the next day. As a result, Loreta filed a complaint against the pawnshop for damages. The trial court ruled in her favor and awarded her damages, but the Court of Appeals reversed the decision, finding no negligence or bad faith on the part of the pawnshop owner. Thus, Loreta filed a Petition for Review seeking the reversal of the Court of Appeals' decision.

ISSUES:

  1. Whether or not private respondent Long Life Pawnshop, Inc. ("Long Life") is liable for damages for allowing the redemption of petitioner's jewelry without notifying her or the police.

  2. Whether or not the appellate court erred in rejecting the testimony of petitioner and Detective Mateo.

RULING:

  1. The Supreme Court held that the lower court's decision should be reinstated and the complaint against Long Life Pawnshop, Inc. should not be dismissed. The Court found that the Court of Appeals committed reversible error in its decision.

PRINCIPLES:

  • The conclusions of the trial court regarding the credibility of witnesses are entitled to great respect from the appellate courts, as the trial court had the opportunity to observe the demeanor of witnesses while giving testimony.

  • The Supreme Court may rule on the issue of credibility of witnesses in exceptional situations where the trial court and the Court of Appeals arrived at divergent conclusions.

  • A pawnshop has a duty to hold the item pledged and to notify the police or the lawful owner in case of redemption to prevent the misappropriation of the item.

  • Proper and timely notification is required to hold a pawnshop liable for damages arising from the redemption of the items pledged.