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VOL. 228, NOVEMBER 19, 1993 75

Chiao Liong Tan vs. Court of Appeals

*
G.R. No. 106251. November 19, 1993.

CHIAO LIONG TAN, petitioner, vs. THE HONORABLE

COURT OF APPEALS, HON. MANUEL T. MURO,
Presiding Judge, RTC of Manila, Branch 54 and TAN BAN
YONG, respondents.

Property; Evidence; Presumption that name on car

registration certificate is owner.A certificate of registration of a
motor vehicle in ones name indeed creates a strong presumption
of ownership. For all practical purposes, the person in whose favor
it has been issued is virtually the owner thereof unless proved
otherwise. In other words, such presumption is rebuttable by
competent proof.
Same; Trusts; Implied trust created where person who pays
for car is not the one whose name appears on registration
certificate.The New Civil Code recognizes cases of implied trust
other than those enumerated therein. Thus, although no specific
provision could be cited

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* SECOND DIVISION.

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76 SUPREME COURT REPORTS ANNOTATED

Chiao Liong Tan vs. Court of Appeals

to apply to the parties herein, it is undeniable that an implied

trust was created when the certificate of registration of the motor
vehicle was placed in the name of petitioner although the price
thereof was not paid by him but by private respondent. The
principle that a trustee who puts a certificate of registration in his
name cannot repudiate the trust by relying on the registration is
one of the well-known limitations upon a title. A trust, which
derives its strength from the confidence one reposes on another
especially between brothers, does not lose that character simply
because of what appears in a legal document.
Replevin; Possession; Property; Issue of ownership of car may
be resolved in action for replevin which is generally a possessory
action only if ownership issue raised.It is true that the
judgment in a replevin suit must only resolve in whom is the right
of possession. Primarily, the action of replevin is possessory in
character and determines nothing more than the right of
possession. However, when the title to the property is distinctly
put in issue by the defendants plea and by reason of the policy to
settle in one action all the conflicting claims of the parties to the
possession of the property in controversy, the question of
ownership may be resolved in the same proceeding.
Same; Same; Same; Same.Finally, although, a replevin
action is primarily one for possession of personalty, yet it is
sufficiently flexible to authorize a settlement of all equities
between the parties, arising from or growing out of the main
controversy. Thus, in an action for replevin where the defendant
is adjudged entitled to possession, he need not go to another

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forum to procure relief for the return of the replevied property or

secure a judgment for the value of the property in case the
adjudged return thereof could not be had. Appropriately, the trial
court rendered an alternative judgment.

PETITION for review of the decision of the Court of

Appeals.

The facts are stated in the opinion of the Court.

Joaquin M. Arao for petitioner.
Macavinta & Sta. Ana Law Offices for private
respondent.

NOCON, J.:

Petitioner seeks in this petition the reversal of the Court of

Appeals decision dated May 15, 1992 in CA-G.R. CV No.
77

VOL. 228, NOVEMBER 19, 1993 77

Chiao Liong Tan vs. Court of Appeals

1
29982 affirming the unfavorable decision of the trial court
in his suit for replevin and damages.
Petitioner Chiao Liong Tan claims to be the owner of a
motor vehicle, particularly described as Isuzu Elf van, 1976
Model with Motor No. 44999-2 and Chassis No. 9646780
which he purchased in March 1987. As owner thereof,
petitioner says he has been in possession, enjoyment and
utilization of the said motor vehicle until it was taken from
him by his older brother, Tan Ban Yong, the private
respondent herein.
Petitioner relies principally on the fact that the Isuzu
Elf van is registered in his name under Certificate of
Registration No. 1501909. He claims in his testimony
before the trial court that the said vehicle was purchased
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from Balintawak Isuzu Motor Center for a price of over

P100,000.00; that he sent his brother to pay for the van
and the receipt for payment was placed in his (petitioners)
name because it was his money that was used to pay for
the vehicle; that he allowed his brother to use the van
because the latter was working for his company, the CLT
Industries; and that his brother later refused to return the
van to him and appropriated the same for himself.
On the other hand, private respondent testified that
CLT Industries is a family business that was placed in
petitioners name because at that time he was then leaving
for the United States and petitioner is the remaining
Filipino in the family residing in the Philippines. When the
family business needed a vehicle in 1987 for use in the
delivery of machinery to its customers, he asked petitioner
to look for a vehicle and gave him the amount of P5,000.00
to be deposited as down payment for an Isuzu Elf Van
which would be available in about a month. After a month,
he himself paid the whole price out of a loan of P140,000.00
which he obtained froth his friend Tan Pit Sin. Inasmuch
as the receipt for the downpayment was placed in the name
of petitioner and since he was still on good terms with him,
private respondent allowed the registration of the vehicle
in petitioners name. It was also their understanding that
he would keep the van for himself because CLT Industries
was not in a position to pay him. Hence, from the time of
the purchase, he had been in

_______________

1 Penned by Judge Manuel T. Muro, RTC, Branch 54, Manila.

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Chiao Liong Tan vs. Court of Appeals
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possession of the vehicle including the original registration

papers thereof, but allowing petitioner from time to time to
use the van for deliveries of machinery.
Tan Pit Sin who had known private respondent since
1968, not only because they were classmates but also
because of their business dealings with each other,
confirmed that private respondent borrowed from him
P140,000.00 in March, 1987 to buy an Isuzu Elf van. In
fact, he had borrowed said vehicle for a few times.
Gina Lu, an employee of the Balintawak Isuzu Motors,
testified that private respondent paid the balance of the
purchase price of the Isuzu Elf van in the amount of
P133,000.00 but the receipt was issued in the name of
Chiao Liong Tan to make the records consistent because it
was the latter who made the deposit of P5,000.00.
Thereafter, the Isuzu Elf van was released to him.
After hearing, the trial court found for private
respondent. The dispositive portion of the decision reads as
follows:

WHEREFORE, judgment is hereby rendered declaring defendant

Tan Ban Yong to be the owner of and entitled to the possession of
the vehicle described in par. 2 of the Complaint, and the plaintiff
is hereby ordered to deliver possession thereof to the said
defendant, or in the alternative if such delivery cannot be made,
to the sum of P138,000.00 as the value of the vehicle taking into
account the depreciation of the vehicle but offset by the inflation
rate, in either alternative, plaintiff is also ordered to pay to said
defendant consequential damages of P20,000.00 for the latter
having been deprived of the possession and use of the vehicle and
to pay the costs. All amounts adjudged herein, except costs, shall
bear interest at the legal rate from date of this decision, until
delivery of the vehicle or the alternative payment of the value
thereof as well as payment of consequential damages is paid; the
interest applies to2 the value of the vehicle if return thereof is
delayed. No costs.

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Finding no merit in the appeal, the respondent Court of

Appeals affirmed the decision of the trial court. Undaunted
by his successive failures, petitioner comes to us and raised
the following errors allegedly committed by the respondent
Court of Appeals, to wit:

_______________

2 Records, pp. 68-69.

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Chiao Liong Tan vs. Court of Appeals

1. x x x in finding the testimonies of private

respondents witnesses credible.
2. x x x in disregarding the Certificate of Registration
of the subject motor vehicle3 as proof of ownership
by the petitioner-appellant.

Since the Court of Appeals merely affirmed the trial courts

assessment of the credibility of the witnesses that testified
before it, petitioner is in effect questioning the factual
findings of said court and its appraisal of their testimony,
which this Court cannot review, its jurisdiction being
limited to questions of law. The considerable weight given
to the findings of the trial court is not without any reason.
It had the opportunity to observe the demeanor of
witnesses which is usually not reflected in the transcript of
records. The profundity of the conclusions thus reached is
just the result of such observance. When the Court of
Appeals affirmed said findings, it goes to show that no
misapprehension of facts was committed as said Court has
the power to scrutinize said factual findings under existing
rules of procedures.
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In concluding that the testimonies of Tan Ban Yong, Tan

Pit Sin and Gina Lu cast doubt on the petitioners
ownership of the motor vehicle in question, both the trial
court and the Court of Appeals attached significance to
their respective interlocking accounts on how the motor
vehicle was acquired, complete with the financing source
and mode of repayment. Respondent Tan Ban Yongs
declaration that he borrowed P140,000.00 from Tan Pit Sin
and paid the balance of the purchase price of the motor
vehicle himself to Gina Lu of the Balintawak Isuzu Motors,
is corroborated by the above-mentioned persons
themselves. Tan Pit Sin not only confirmed the loan but
also stated that the same was paid in three (3) months;
P50,000.00 on the first payment; another P50,000.00 on 4
the
second payment and P40,000.00 on the last payment. Gina
Lu, who testified at the instance of petitioner, declared that
the downpayment of P5,000.00 was paid by petitioner and
so the receipt for the same was issued in his name but the
balance of P133,000.00 was paid by private respon-

_______________

3 Rollo, p. 5.
4 TSN, March 22, 1990, p. 5.

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Chiao Liong Tan vs. Court of Appeals

dent and to make the record consistent, she issued the

receipt in the name of petitioner again.
In contrast to the clear and categorical averments of
private respondent and the witnesses in this case negating
petitioners ownership of the motor vehicle in question,
petitioners averments before the trial court and this Court
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are not only desperate but conflicting. In his testimony

below, petitioner averred that he used his own money to
purchase the 5
motor vehicle by paying the sum of
P100,000.00, which testimony
6
is negated by his admission
on page 5 of his petition before this Court that private
respondent borrowed money from Tan Pit Sin with which
to purchase the subject motor vehicle. Then, in his pleading
before the court below, particularly in his reply to the
answer of private respondent, petitioner alleged that the
motor vehicle was intended for7
his exclusive use and not to
service the family busi-ness. And yet, in his petition before
this Court, he claimed that the subject motor vehicle was
purchased for CLT Industries, which he solely8 owned and
accordingly, registered in the latters name. On top of
these entangled averments, petitioner did not have in his
possession the Certificate of Registration of the motor
vehicle and the official receipt of payment for the same,
thereby lending credence to the claim of private respondent
who has possession thereof, that he owns the subject motor
vehicle.
A certificate of registration of a motor vehicle in ones
name indeed creates a strong presumption of ownership.
For all practical purposes, the person in whose favor it has
been issued is virtually the owner thereof unless proved
otherwise. In other words, such presumption is rebuttable
by competent proof.
The New Civil Code recognizes cases 9
of implied trust
other than those enumerated therein. Thus, although no
specific provision could be cited to apply to the parties
herein, it is undeniable that an implied trust was created
when the certificate of registration of the motor vehicle was
placed in the name of

_______________

5 TSN, November 16, 1989, pp. 30-31.

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6 Rollo, p. 6.
7 Records, p. 22.
8 Rollo, p. 6.
9 Art. 1447, New Civil Code.

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VOL. 228, NOVEMBER 19, 1993 81

Chiao Liong Tan vs. Court of Appeals

petitioner although the price thereof was not paid by him

but by private respondent. The principle that a trustee who
puts a certificate of registration in his name cannot
repudiate the trust by relying on the registration is one of
the well-known limitations upon a title. A trust, which
derives its strength from the confidence one reposes on
another especially between brothers, does not lose that
character simply because of what appears in a legal
document.
Even under the Torrens System of land registration, this
Court in some instances did away with the irrevocability or
indefeasibility of a certificate of title to 10prevent injustice
against the rightful owner of the 11property.
It is true that the judgment in a replevin suit must
only resolve in whom is the right of possession. Primarily,
the action of replevin is possessory in character and
determines nothing more than the right of possession.
However, when the title to the property is distinctly put in
issue by the defendants plea and by reason of the policy to
settle in one action all the conflicting claims of the parties
to the possession of the property in controversy, the
question of ownership may be resolved in the same
proceeding.
Procedure-wise, the Court observes that the action by
petitioner as plaintiff in the trial court was only one for
Replevin and Damages. Since replevin is only a provisional
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remedy where the replevin plaintiff claims immediate

delivery of personal property pending
12
the judgment of the
trial court in a principal case, the petitioner should have
filed in the trial court as a main case an action to recover
possession of the Isuzu Elf van which was in the possession
of the private respondent. Logically, the basis of
petitioners cause of action should have been his ownership
of said van.

_______________

10 Bornales IAC, G.R. No. 75336, 166 SCRA 524 (1988); Amerol v.
Bagumbayan, G.R. No. L-33261, 154 SCRA 403 (1987); Cardiente v. IAC,
G.R. No. 73651, 155 SCRA 689 (1987).
11 Sec. 9, Rule 60, Rules of Court.
12 Section 1, Rule 60, Rules of Court; Calo v. Roldan, 76 Phil. 445;
Regalado, Florenz, D., Remedial Law Compendium; Vol. 1, pp 436-437 and
Francisco, Vicente, Jr., The Revised Rules of Court in the Philippines,
Annotated and Commented, Vol. IV-A, pp. 386-387.

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Chiao Liong Tan vs. Court of Appeals

13
In the State of California, from whose Code of Procedure
we copied our rule on replevin, their old replevin rule
which allowed the immediate delivery of the chattel at the
commencement of the action upon application with bond by
the replevin plaintiff had already been struck down 14
as
early as July 1, 1971 in the case of Blair v. Pitchess. As in
fact, on June 12, 1972 when the United States Supreme
Court struck down as unconstitutional the Florida 15
and
Pennsylvania replevin statutes in Fuentes v. Shevin, most
of the states, on their own, changed their replevin statutes
to include a mandatory preliminary hearing before the writ
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could be issued, similar to our mandatory preliminary

hearing16 before the writ of preliminary injunction can be
issued.
If that had been the case in this jurisdiction, then the
trial judge would have discovered right away at the
preliminary hearing that private respondent should have
immediately staked his claim of ownership and that would
have created serious doubts about petitioners claim of
ownership. Most likely, the writ would not have been
issued and the complaint would have been dismissed motu
proprio by the trial court upon the discovery that the
petitioner did not have a principal case therein. As it is, the
complaint proceeded its course to the detriment of private
respondent.
Finally, although, a replevin action is primarily one for
possession of personalty, yet it is sufficiently flexible to
authorize a settlement of all equities between the parties,
17
arising from or growing out of the main controversy. Thus,
in an action for replevin where the defendant is adjudged
entitled to possession, he need not go to another forum to
procure relief for the return of the replevied property or
secure a judgment for the value of the property in case the
adjudged return thereof could not be had. Appropriately,
the trial court rendered an alternative judgment.
WHEREFORE, the questioned decision being in
accordance with the law, the instant petition for review is
hereby DENIED

_____________

13 Enacted in 1872.
14 45 ALR 3d 1206.
15 407 U.S. 67, 32 L. Ed., 556, 92 S. Ct. 1983.
16 Section 5, Rule 58, Rules of Court, as amended by BP 224.
17 Hales-Mullaly, Inc. v. Cannon, 119 P 2d 46, 48, 189 Okl 613, cited in
Words and Phrases, Replevin, Vol. 37, permanent ed.

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People vs. Danque

for lack of merit.

SO ORDERED.

Narvasa (C.J., Chairman), Padilla and Regalado,

JJ., concur.
Puno, J., No part.

Petition denied.

Notes.Trusts are either express or implied. Express

trusts are created by the intention of the trustor or of the
parties. Implied trusts come into being by operation of law
(Mindanao Development Authority vs. Court of Appeals,
113 SCRA 429).
In replevin suits, the applicant who seeks the immediate
possession of the property need not be the holder of the
legal title to such property, it is enough that at the time of
application, he is entitled to the possession thereof (Allied
Leasing and Finance Corp. vs. Court of Appeals, 197 SCRA
71).

o0o

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