Malayan Insurance v. Alibudbud

Facts:

Diana Alibudbud,employed by Malayan Insurance as the Senior Vice President for its Sales Department was issued a Honda Civic sedan with the following conditions: (1) she must continuously stay and serve Malayan for at least three full years from the date of the availment of the Car Financing Plan; and (2) that in case of resignation, retirement or termination before the three-year period, she shall pay in full 100% share of Malayan and the outstanding balance of his/her share of the cost of the motor vehicle.

Alibudbud execute a Promissory Note and a Deed of Chattel Mortgage in the amount of P360,000.00. One of the stipulations in the Deed state that Alibudbud shall refund Malayan an amount equivalent to its 50% equity share in the motor vehicle, or P360,000.00 if she leaves Malayan within three years from the availment of the subject vehicle.

Alibudbud was dismissed from Malayan due to redundancy. Malayan demanded that she surrender possession of the car but Alibudbud refused to do so.

Malayan instituted a complaint for Replevin. Afterwards, Alibudbud filed an illegal dismissal case against Malayan. She also sought for the suspension of the proceedings on the action for Replevin on the grounds that the illegal dismissal case was a prejudicial question. The complaint for illegal dismissal was dismissed.

The RTC granted the replevin and stated that: Alibudbud is under obligation to pay in full the acquisition cost of the car issued to her by Malayan; Alibudbud's ownership over the car is not yet absolute for it bears the notation "encumbered", thereby signifying her obligation to pay its value within the period set forth in the Promissory Note and Deed of Chattel Mortgage; and that the replevin action was converted into a money claim in view of Alibudbud's vehement refusal to surrender the possession of the car.

The CA dismissed the action for replevin on the grounds that the RTC has no jurisdiction on the action for replevin as there was an “employer-employee” relationship which was, in effect, a pre-condition before one can avail of the car financing plan.

ISSUE:

Whether or not the RTC properly took cognizance of the Replevin case; Whether or not the parties’ relationship to each other is that of an “employer-employee”

HELD:

YES, the RTC properly took cognizance of the Replevin case. The relationship of the parties is that of debtor and creditor. Malayan's demand for Alibudbud to pay the 50% company equity over the car or, to surrender its possession, is civil in nature. The trial court's ruling also aptly noted the Promissory Note and Deed of Chattel Mortgage voluntarily signed by Alibudbud to secure her financial obligation to avail of the car being offered under Malayan's Car Financing Plan. The issue in the replevin action is separate and distinct from the illegal dismissal case.