Misplaced trust

Dominador Awiten .

Plaintiff ACD alleges in his complaint before the Regional Trial Court that a deed of sale of a utility vehicle was executed between plaintiff and defendant NR. However, while there was delivery to the buyer of both the vehicle and its certificate of registration, defendant NR was able to obtain from the Land Transportation Office a new certificate of registration (probably by a false claim of loss of the first certificate), and with the new certificate, defendant NR applied for a loan from co-defendant OIC (lender) that is secured by a chattel mortgage over the utility vehicle.

After defendant NR defaulted on the loan, OIC requested the LTO to place the utility vehicle on alarm, since OIC could not register the chattel mortgage because the physical possession was in the plaintiff.   The latter may also be held at fault for not promptly registering the transfer of ownership by virtue of the sale earlier done.

For the posting of alarm, LTO was named a co-defendant.   

It was clarified in the case of Ablaza v. Ignacio (GR No. L-11466, May 23, 1958) that while the Chattel Mortgage Law (Act No. 1508, 2 July 1906) defined the chattel mortgage as a “conditional sale,” it is actually a mere security for the payment of a debt.

Mortgage in French law means a “dead pledge” such that the pledge ends when either the principal obligation is fulfilled or when the property held as security is foreclosed by a public sale.

While the case was on pre-trial, an agreement was reached between the plaintiff and defendant OIC whereby plaintiff would pay the loan and, then, would be able to register his acquisition of ownership with LTO removing the alarm.  

The approval by the court of the agreement (with plaintiff in reservation of his right of action against the absconding defendant NR) is another instance of the usefulness of alternative modes of dispute resolution to provide early end of a litigation that is acceptable to the parties (under authority of R.A. 9285, April 2, 2004). 

The court litigation could have been avoided had there been prompt registration of the transfer of ownership.

In civil law, the principle is known as “due diligence to protect and preserve one’s right.”  If the negligence runs over a long period, there may set in laches, the inordinate delay in asserting the right as to effectively lose it.

A second instance of neglect in protection and preservation of a right can be termed as “misplaced trust.”

RPC requests the LTO to revert to his name as the lawful registered owner of a motor vehicle. 

RPC claims that when he left for abroad, he entrusted the motor vehicle in the custody of ELR.  The latter, using a false deed of sale with a forgery of RPC’s signature, allegedly succeeded in having a new certificate of registration in her name.

In support of the request for reversion to RPC’s name (which LTO afterwards treats as an application for the cancellation of the new C.R.), a copy of a judgment from the Municipal Trial Court in Cities, together with the Clerk of Court’s certification of finality of judgment, was submitted, in which ELR was convicted in the criminal case for falsification of a public document.

In acting favorably on the request, the LTO relies on the provision in the Revised Penal Code on the civil liability of the accused who is convicted of a felony, and the civil liability may consist in restitution, reparation, or indemnification of the consequential damage.

Its acts being administrative in character, the LTO is lawfully vested with authority to act on the basis of “substantial evidence” before it. 

As provided in the Rules of Court and a long line of jurisprudence (most notably in the case of Ang Tibay versus Court of Industrial Relations, G.R. L-46496, February 27, 1940, in which the ponencia of Justice Jose P. Laurel eloquently elucidated on administrative due process), substantial evidence is that relevant evidence that a reasonable mind might accept as adequate to support a conclusion.