Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=40399:g-r-no-137705-august-22,-2000-serg-rsquo-s-products,-et-al-v-pci-leasing-and-finance&amp;catid=1396&amp;Itemid=566
Timestamp: 2019-04-19 15:11:44+00:00

Document:
SERG’S PRODUCTS, INC., and SERGIO T. GOQUIOLAY, Petitioners, v. PCI LEASING AND FINANCE, INC., Respondent.
"On February 13, 1998, respondent PCI Leasing and Finance, Inc. ("PCI Leasing" for short) filed worth the RTC-QC a complaint for [a] sum of money (Annex ‘E’), with an application for a writ of replevin docketed as Civil Case No. Q-98-33500.
"On March 6, 1998, upon an ex-parte application of PCI Leasing, respondent judge issued a writ of replevin (Annex ‘B’) directing its sheriff to seize and deliver the machineries and equipment to PCI Leasing after 5 days and upon the payment of the necessary expenses.
"On March 24, 1998, in implementation of said writ, the sheriff proceeded to petitioner’s factory, seized one machinery with [the] word that he [would] return for the other machineries.
"On March 25, 1998, petitioners filed a motion for special protective order (Annex ‘C’), invoking the power of the court to control the conduct of its officers and amend and control its processes, praying for a directive for the sheriff to defer enforcement of the writ of replevin.
"This motion was opposed by PCI Leasing (Annex ‘F’), on the ground that the properties [were] still personal and therefore still subject to seizure and a writ of replevin.
"In their Reply, petitioners asserted that the properties sought to be seized [were] immovable as defined in Article 415 of the Civil Code, the parties’ agreement to the contrary notwithstanding. They argued that to give effect to the agreement would be prejudicial to innocent third parties. They further stated that PCI Leasing [was] estopped from treating these machineries as personal because the contracts in which the alleged agreement [were] embodied [were] totally sham and farcical.
"On April 6, 1998, the sheriff again sought to enforce the writ of seizure and take possession of the remaining properties. He was able to take two more, but was prevented by the workers from taking the rest.
"A.	Whether or not the machineries purchased and imported by SERG’S became real property by virtue of immobilization.
In the main, the Court will resolve whether the said machines are personal, not immovable, property which may be a proper subject of a writ of replevin. As a preliminary matter, the Court will also address briefly the procedural points raised by Respondent.
Respondent contends that the Petition failed to indicate expressly whether it was being filed under Rule 45 or Rule 65 of the Rules of Court. It further alleges that the Petition erroneously impleaded Judge Hilario Laqui as Respondent.
While Judge Laqui should not have been impleaded as a respondent, 14 substantial justice requires that such lapse by itself should not warrant the dismissal of the present Petition. In this light, the Court deems it proper to remove, motu proprio, the name of Judge Laqui from the caption of the present case.
Petitioners contend that the subject machines used in their factory were not proper subjects of the Writ issued by the RTC because they were in fact real property. Serious policy considerations, they argue, militate against a contrary characterization.
(5)	Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works.
Be that as it may, we disagree with the submission of the petitioners that the said machines are not proper subjects of the Writ of Seizure.
The Court has held that contracting parties may validly stipulate that a real property be considered as personal. 18 After agreeing to such stipulation, they are consequently estopped from claiming otherwise. Under the principle of estoppel, a party to a contract is ordinarily precluded from denying the truth of any material fact found therein.
Clearly then, petitioners are estopped from denying the characterization of the subject machines as personal property. Under the circumstances, they are proper subjects of the Writ of Seizure.
It should be stressed, however, that our holding — that the machines should be deemed personal property pursuant to the Lease Agreement — is good only insofar as the contracting parties are concerned. 22 Hence, while the parties are bound by the Agreement, third persons acting in good faith are not affected by its stipulation characterizing the subject machinery as personal. 23 In any event, there is no showing that any specific third party would be adversely affected.
These arguments are unconvincing. The validity and the nature of the contract are the lis mota of the civil action pending before the RTC. A resolution of these questions, therefore, is effectively a resolution of the merits of the case. Hence, they should be threshed out in the trial, not in the proceedings involving the issuance of the Writ of Seizure.
It should be pointed out that the Court in this case may rely on the Lease Agreement, for nothing on record shows that it has been nullified or annulled. In fact, petitioners assailed it first only in the RTC proceedings, which had ironically been instituted by Respondent. Accordingly, it must be presumed valid and binding as the law between the parties.
Petitioners contend that "if the Court allows these machineries to be seized, then its workers would be out of work and thrown into the streets." 31 There also allege that the seizure would nullify all efforts to rehabilitate the corporation.
WHEREFORE, the Petition is DENIED and the assailed Decision of the Court of Appeals AFFIRMED. Costs against petitioners.
2.	Penned by Justice Romeo A. Brawner (Division acting chairman), with the concurrence of Justices Eloy R. Bello Jr. and Martin S. Villarama Jr.
4.	CA Decision, p. 3; rollo, p. 179.
6.	Presided by Judge Hilario L. Laqui.
9.	Motion for Special Protective Order, pp. 3-4; rollo, pp. 76-77.
10.	CA Decision, pp. 1-2; rollo, pp. 177-178.
11.	The case was deemed submitted for resolution on October 21, 1999, upon receipt by this Court of the petitioners’ Memorandum signed by Atty. Victor Basilio N. De Leon of Antonio R. Bautista & Partners. Respondent’s Memorandum, which was signed by Atty. Amador F. Brioso Jr. of Perez & Calima Law of fires, had been filed earlier on September 29, 1999.
12.	Petitioners’ Memorandum, p. 3; rollo, p. 376.
13.	Section 1, Rule 45 of the Rules of Court.
15.	BA Finance v. CA, 258 SCRA 102, July 5, 1996; Filinvest Credit v. CA, 248 SCRA 549, September 27, 1995; Machinery Engineering Supply v. CA, 96 Phil. 70, October 29, 1954.
16.	Mindanao Bus Co. v. City Assessor and Treasurer, 6 SCRA 197, September 29, 1962, per Labrador, J. See also Vitug, Compendium of Civil Law and Jurisprudence, 1986 ed., pp. 99-100.
17.	People’s Bank & Trust Co. v. Dahican Lumber, 20 SCRA 84, May 16, 1967. Burgos v. Chief of Staff; 133 SCRA 800, December 26, 1984; Davao Sawmill Co. v. Castillo, 61 Phil. 709, August 7, 1935.
18.	Chua Peng Hian v. CA, 133 SCRA 572, December 19, 1984; Standard Oil Co. v. Jaranillo, 44 Phil. 630, March 16, 1923; Luna v. Encarnacion, 91 Phil. 531, June 30, 1952; Manarang v. Ofilada, 99 Phil. 109, May 18, 1956; People’s Bank & Trust Co. v. Dahican Lumber, supra.
19.	41 SCRA 143, 153 September 30, 1971, per Reyes, JBL, J.
20.	122 SCRA 296, 300, May 16, 1983, per De Castro, J.
22.	Evangelista v. Alto Surety and Insurance Co., 103 Phil. 401, April 23, 1958, Navarro v. Pineda, 9 SCRA 631, November 30, 1963.
23.	Vitug, supra, pp. 100-101.
24.	Petitioners’ Memorandum, p. 8; rollo, p. 381.
25.	Petition, p. 10; rollo, p. 12.
26.	Reply, p. 7, rollo, p. 301.
27.	209 SCRA 553, 567, June 8, 1992, per Narvasa, CJ.
29.	See Fuentes v. Court of Appeals, 268 SCRA 703, February 26, 1997.
31.	Petition, p. 16; rollo, p. 18.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.