Fernandez vs. International Corporate Bank

The Court held that writs and processes issued by a metropolitan trial court may be validly served and enforced anywhere in the Philippines, and that the jurisdiction of a court in actions for replevin is determined by the amount of the claim alleged in the complaint, not by the value of the chattel seized.

Spouses Oscar and Nenita Fernandez purchased a Nissan Sentra Sedan through a financing scheme with International Corporate Bank (now Union Bank), executing a chattel mortgage in the bank's favor. The bank filed a complaint for a sum of money with replevin before the MTC of Pasay City when the spouses allegedly defaulted. The MTC issued a writ of replevin, and the vehicle was seized.

• The Financing Agreement: Spouses Fernandez bought a Nissan Sentra for P492,000, making a P147,500 downpayment and financing P344,500 with International Corporate Bank, secured by a chattel mortgage.
• The Complaint and Seizure: The bank filed a complaint for a sum of money with replevin (Civil Case No. 983-96) in the MTC of Pasay City, Branch 44, claiming a principal amount of P190,635.90. The MTC issued a writ of replevin, and the vehicle was seized on January 7, 1997.
• Petitioners' Objections: Petitioners argued the MTC lacked jurisdiction because the vehicle's value (P553,344) exceeded P200,000, and venue was improper as they resided in Quezon City and the bank was in Makati. They also attempted to consign P69,168 for advance payments and a redelivery bond.
• MTC Rulings: The MTC denied the motion to dismiss, holding the claim of P190,635.90 was within its jurisdiction and venue was proper based on the promissory note's stipulation. The MTC denied the motion to redeliver because petitioners failed to post a redelivery bond in double the value of the chattel within five days.

• Petitioners maintained that the MTC's territorial jurisdiction was strictly limited to Pasay City, precluding enforcement of the writ of replevin outside its boundaries.
• Petitioners argued that the MTC lacked jurisdiction because the value of the seized chattel exceeded P200,000.
• Petitioners contended that venue was improper, as neither party resided or had its principal office in Pasay City.
• Petitioners asserted that the MTC erred in denying their motion for redelivery despite their issuance of a manager's check for P69,168 within five days of seizure.

• Respondent bank countered that the MTC had jurisdiction because the principal claim was P190,635.90, which falls within the MTC's jurisdictional threshold.
• Respondent argued that the objection to venue was waived because it was raised in the Answer rather than a motion to dismiss, and that the promissory note contained a valid venue stipulation allowing suits anywhere in Metro Manila.
• Respondent maintained that the writ of replevin could be enforced anywhere in the Philippines under the interim rules implementing B.P. 129.
• Respondent asserted that petitioners failed to post the required redelivery bond in double the value of the chattel.

• Procedural Issues:
  • Whether the objection to improper venue was correctly disallowed despite being raised in the Answer rather than a motion to dismiss.
  • Whether a writ of replevin issued by an MTC can be enforced outside the territorial boundaries of the city where the court sits.
• Substantive Issues:
  • Whether the jurisdiction of the MTC in a replevin case is determined by the value of the seized chattel or the amount of the demand in the complaint.
  • Whether petitioners are entitled to the redelivery of the seized vehicle despite failing to post a bond in double the value of the chattel.

• Procedural: The Court ruled that the objection to improper venue was waived. Under the pre-1997 Rules of Court, an objection to improper venue must be raised in a motion to dismiss before a responsive pleading is filed; raising it for the first time in the Answer constitutes a waiver. Moreover, the promissory note contained a valid stipulation allowing the bank to file suit in any court in Metro Manila. The Court further held that the writ of replevin could be enforced anywhere in the Philippines. Pursuant to the Supreme Court's En Banc Resolution dated January 11, 1983, providing interim rules for B.P. 129, all processes (except specific writs like certiorari, prohibition, etc.) issued by lower courts may be served anywhere in the Philippines. The Court distinguished between a court's jurisdiction to hear a case and its power to issue writs and processes enforceable outside its territorial boundaries.
• Substantive: The Court held that the MTC's jurisdiction is determined by the amount of the demand, not the value of the seized property. The principal claim was P190,635.90, which falls within the MTC's jurisdictional limit. The value of the seized vehicle is immaterial because any excess from the sale of the chattel mortgage proceeds must be returned to the mortgagor under Section 14 of the Chattel Mortgage Law. The Court also ruled that petitioners were not entitled to redelivery because they failed to comply with the requirements of Rule 60 of the Rules of Court. To secure redelivery, the defendant must post a bond in double the value of the property. Petitioners' manager's check of P69,168 was insufficient to cover the redelivery bond, which should have been double the value of the vehicle.

• Territorial Enforceability of Writs — Under the interim rules implementing B.P. 129, writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus, and injunction issued by an RTC are enforceable only within the region. All other processes, whether issued by an RTC or lower courts (MTC, MeTC, MTCC), may be served anywhere in the Philippines without certification from an RTC judge. The Court applied this to hold that a writ of replevin issued by an MeTC may be enforced anywhere in the country.
• Determination of Jurisdiction in Replevin — The jurisdiction of a court in an action for replevin is determined by the amount of the claim or demand alleged in the complaint, not by the value of the chattel seized in the ancillary proceedings. The Court applied this to hold that the MeTC had jurisdiction because the claim was P190,635.90, even though the vehicle's value exceeded P200,000.
• Waiver of Objection to Venue — Under the pre-1997 Rules of Court, an objection to improper venue must be raised in a motion to dismiss before the filing of a responsive pleading; otherwise, it is deemed waived. The Court held that raising the objection in the Answer constituted a waiver.

• "A writ of replevin issued by the Metropolitan Trial Court of Pasay City may be served and enforced anywhere in the Philippines. Moreover, the jurisdiction of a court is determined by the amount of the claim alleged in the complaint, not by the value of the chattel seized in ancillary proceedings."
• "Petitioners confused the jurisdiction of a court to hear and decide a case on the one hand with, on the other, its power to issue writs and processes pursuant to and in the exercise of said jurisdiction."

• Malaloan v. Court of Appeals, 232 SCRA 249 (1994) — Followed. Reiterated the distinction between a court's jurisdiction to hear a case and its power to enforce its processes outside its territorial boundaries, affirming that processes not falling under paragraph (a) of the interim rules may be enforced anywhere in the Philippines.
• Diaz v. Adiong, 219 SCRA 631 (1993) — Followed. Held that improper venue is a waivable objection that must be raised in a motion to dismiss before a responsive pleading is filed; otherwise, it is deemed waived.

• Section 28, Batas Pambansa 129 — Defines the territorial jurisdiction of Metropolitan Trial Courts as co-extensive with the cities and municipalities comprising the metropolitan area. The Court clarified that this provision pertains to a court's jurisdiction to hear cases, not the territorial enforceability of its writs and processes.
• Supreme Court En Banc Resolution dated January 11, 1983 (Interim Rules for B.P. 129) — Provides that all processes (except specific writs like certiorari, prohibition, etc.) issued by lower courts may be served anywhere in the Philippines. The Court applied this to authorize the enforcement of the writ of replevin outside Pasay City.
• Rule 60, Rules of Court (Return of Property) — Requires a defendant seeking the return of seized property to post a redelivery bond in double the value of the property. The Court applied this to deny redelivery because petitioners' bond was insufficient.
• Rule 16, Section 1, Rules of Court (pre-1997) — Requires objections to improper venue to be made in a motion to dismiss before any responsive pleading is filed. The Court applied this to deem petitioners' venue objection waived.
• Section 14, Chattel Mortgage Law — Provides that proceeds from the sale of mortgaged property shall be applied to costs, the secured obligation, and subsequent obligations, with the balance returned to the mortgagor. The Court cited this to explain why the value of the chattel does not determine jurisdiction, as the bank is entitled only to the amount owed.

Melo, Vitug, and Gonzaga-Reyes, JJ.