Advent Capital and Finance Corporation vs. Young

Advent Capital and Finance Corporation vs.
Young  Advent’s contention that returning the subject car to Young would constitute a violation of the stay
Replevin – Judgment order issued by the rehabilitation court is untenable. As the Court of Appeals correctly concluded,
returning the seized vehicle to Young is not an enforcement of a claim against Advent which
Facts: must be suspended by virtue of the stay order issued by the rehabilitation court pursuant to Section
1. Prior to the replevin case Advent was able to secure an order (stay order) from Rehabilitation 6 of the Interim Rules on Corporate Rehabilitation (Interim Rules).
Court which states that “the enforcement of all claims whether for money or otherwise, and
whether such enforcement is by court action or otherwise, against the Advent is stayed.” No. The order directing the Trial Court to set a hearing to determine damages against the posted
2. Rehabilitation court approved the rehabilitation plan submitted by Advent. Included in the replevin bond is not proper. Sec. 20 of Rule 57 in relation to Sec. 10 of Rule 60 essentially allows the
inventory of Advent’s assets was the subject car which remained in Young’s possession at the application for damages on account of improper, irregular or excessive attachment to be filed at any
time. time before the judgment becomes executory. It should be filed in the same case that is the main
3. Young’s obstinate refusal to return the subject car, after repeated demands, prompted Advent action, and with the court having jurisdiction over the case at the time of the application.
to file the replevin case at the RTC.
4. After Advent’s posting of replevin bond, the trial court issued a Writ of Seizure directing In this case, there was no application for damages against Stronghold resulting from the issuance of
the Sheriff to seize the subject car from Young. Upon receipt of the Writ of Seizure, Young the writ of seizure before the finality of the dismissal of the complaint for failure to prosecute. It
turned over the car to Advent, which delivered the same to the rehabilitation receiver. appears that Young filed his omnibus motion claiming damages against Stronghold after the dismissal
5. Thereafter, Young filed an Answer alleging that as a former employee of Advent, he had the order issued by the trial court had attained finality. Thus, Young is barred from claiming damages
option to purchase the subject car at book value pursuant to the company car plan and to offset against the replevin bond.
the value of the car with the proceeds of his retirement pay and stock option plan.
6. After issues have been joined, the parties entered into pre-trial, which resulted in the issuance of  Since Young is time-barred from claiming damages against the replevin bond, the dismissal order
having attained finality after the application for damages, the Court of Appeals erred in ordering the
a pre-trial order of even date reciting the facts and the issues to be resolved during the trial.
7. Trial court issued an Order dismissing the replevin case without prejudice for Advent’s failure trial court to set a hearing for the determination of damages against the replevin bond.
to prosecute.
Notes:
8. Young filed an omnibus motion, praying that Advent return the subject car and pay him P1.2 
million in damages “for the improper and irregular seizure” of the subject car, to be charged
against the replevin bond posted by Advent through Stronghold. RTC denied.
9. The Court of Appeals ruled in favor of Young and annulled the assailed rulings of the trial court
and order the return of the car to Young and order the RTC to conduct a hearing to determine
damages against replevin bond posted by Advent.
10. Hence, this petition
Issue:
o Main Issue: Whether the seized car be returned to Young upon dismissal of the case on the ground
of Plaintiff Advent’s failure to prosecutor.
o Sub Issue: Whether the order to trial court to set a hearing for the determination of damages
against Replevin Bond proper.
Court’s Ruling:
Yes, the seized car should be returned to Young since this is the necessary consequence of the dismissal
of the replevin case for failure to prosecute without prejudice. Upon the dismissal of the replevin case
for failure to prosecute, the writ of seizure, which is merely ancillary in nature, became functus officio
and should have been lifted. There was no adjudication on the merits, which means that there was no
determination of the issue who has the better right to possess the subject car. Advent cannot therefore
retain possession of the subject car considering that it was not adjudged as the prevailing party
entitled to the remedy of replevin.
 Contrary to Advent’s view, Olympia International Inc. v. Court of Appeals applies to this case. The
dismissal of the replevin case for failure to prosecute results in the restoration of the parties’
status prior to litigation, as if no complaint was filed at all. To let the writ of seizure stand after
the dismissal of the complaint would be adjudging Advent as the prevailing party, when
precisely no decision on the merits had been rendered. Accordingly, the parties must be reverted
to their status quo ante. Since Young possessed the subject car before the filing of the replevin case,
the same must be returned to him, as if no complaint was filed at all.

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