SERVICEWIDE SPECIALISTS, INC., vs. CA, G.R. No.

117728 June 26, 1996 FACTS: Servicewide filed a complaint for replevin and sum of money with damages against the Tolosa spouses and one John Doe. It alleged that on January 15, 19 1, the Tolosa spouses purchased from !mante "otor #or$s one Isu%u passenger&type 'eepney with "otor (o. )*+,&-1.--1 and Serial (o. )")I& 1,/-&) for the sum of 0+ ,+-*.,, to 1e paid in *+ monthly installments2 that the spouses e3ecuted a promissory note and drew a deed of chattel mortgage over the vehicle in favor of !mante "otor #or$s2 that on the same day, !mante "otor #or$s assigned the promissory note and chattel mortgage to 4ilinvest 4inance2 that 4ilinvest 4inance also assigned its rights and interest in said promissory note and chattel mortgage to 4ilinvest )redit2 that Servicewide later ac5uired the rights and interests of 4ilinvest )redit over said note and mortgage2 and that the Tolosa spouses failed to pay the installments due despite several demands. It demanded from the spouses and John Doe, the return of the vehicle or the payment of the 1alance of 0-+,**+.. and damages. The trial court issued an order for the sei%ure of the vehicle su1'ect of the complaint. The Tolosa spouses filed their !nswer on "arch **,19 *. They claimed that they purchased one 'eepney unit from 6inan "otors, not !mante "otor #or$s2 that in January 19 1, they ordered another unit through its 0resident and 7eneral "anager, 8duardo 7arcia2 that 7arcia informed the spouses that the additional unit shall 1e 9house financed9 1y 6inan "otors2 that 8duardo Tolosa noticed that the vendor indicated in the deed of sale was not 6inan "otors 1ut !mante "otor #or$s2 that 7arcia e3plained to Tolosa that he :7arcia; was to ma$e full payment on the 'eepney to !mante "otor #or$s and that he :Tolosa; was to pay 7arcia the monthly installments2 that Tolosa never received any notice from 6inan "otors a1out the 'eepney unit he ordered2 that on Decem1er 1., 19 1, Tolosa received a receipt from 4ilinvest 4inance a1out payment he allegedly made on a 'eepney unit he purchased from !mante "otor #or$s2 that 7arcia informed him he was in possession of the 'eepney and said that he made the initial payment on the vehicle and that he himself would pay its monthly amorti%ation2 that 7arcia prepared and e3ecuted a 9Deed of Sale with !ssumption of "ortgage9 where it appeared that Tolosa sold and transferred to 7arcia the said 'eepney. Servicewide amended its complaint 1y adding 8duardo 7arcia as the defendant in place of John Doe. It alleged that the Tolosa spouses, without Servicewide<s $nowledge and consent, e3ecuted and delivered to 8duardo 7arcia a 9Deed of Sale with !ssumption of "ortgage9 over the 'eepney. The trial court admitted the amended complaint and ordered the issuance of summons on 7arcia as additional defendant. The Tolosa spouses filed an 9!mended !nswer with Third&0arty )omplaint9 impleading as third&party defendants 6inan "otors and 8duardo 7arcia. The trial court ordered service of summons on the third&party defendants. The sheriff sei%ed the su1'ect vehicle from the possession of one =ourdes 6artina. 6artina filed a 9Third&0arty )laim9 and 9>rgent "otion for ?elease9 alleging ownership of the 'eepney. She claimed that she purchased the vehicle from 6inan "otors and regularly made payments to )ommercial )redit )orporation. @n 4e1ruary *1, 19 -, the trial court released the vehicle to 6artina on an indemnity 1ond of 0-+,,,,.,,. The court found that the documents supporting 6artina<s ownership of the 'eepney were in due form and e3ecuted prior to the documents of the Tolosa spouses. @n "arch *, 19 -, 6inan "otors and 8duardo 7arcia filed their 9!nswer to Third&0arty )omplaint9 claiming that the third&party plaintiffs :Tolosa spouses; had no cause of action against them as it was !mante "otor #or$s that invoiced the vehicle2 that the Tolosa spouses purchased a 'eepney unit from them 1ut their chec$ for downpayment 1ounced2 that they initiated a complaint for violation of the 6ouncing )hec$s =aw against 8duardo Tolosa for which an information was filed on Decem1er *, 19 *2 that if the Tolosa spouses were pre'udiced it was 1ecause of their unreasona1le neglect to ma$e good their initial payment on the vehicle. ! reply was filed 1y the Tolosa spouses. Despite the court<s order, the su1'ect 'eepney was not released to 6artina who filed her 9)omplaint in Intervention.9 Third&party defendants 7arcia and 6inan "otors filed their 9!nswer to )omplaint in Intervention.9 They claimed that they ac5uired the su1'ect vehicle from the Tolosas 9in consideration of the value of one )eleste 'eepney in the amount of 05/,,,,.,,9 1ut that the Tolosas failed to pay the downpayment on the vehicle2 that they came to court with clean hands and that they are actually the victims of the Tolosas. Servicewide manifested that it was adopting its complaint in the principal case as its comment or answer to the complaint&in&intervention. !t the pretrial conference, the trial court noted that summons and copy of the amended complaint had not 1een served on 8duardo 7arcia as additional defendant. It deferred the pretrial until such service shall have 1een effected. The trial court ordered Servicewide to turn over possession of the su1'ect 'eepney to 6artina upon filing of the increased 1ond of 055,,,,.,. 0retrial was rescheduled 1ut was postponed several times until @cto1er ., 19 5. @n @cto1er ., 19 5, all parties, through their respective counsels, appeared e3cept the Tolosas and their counsel. The trial court declared the Tolosas in default with respect to the principal complaint and scheduled the reception of evidence for Servicewide. The Tolosas were li$ewise declared nonsuited with respect to their third&party complaint against 6inan "otors and 7arcia. #ith regard to the complaint&in&intervention, the trial court scheduled a pretrial conference. !t the hearing for the reception of Servicewide<s evidence, the Tolosas again failed to appear. Servicewide presented its legal accounts analyst,(annette (avea, who testified on the outstanding o1ligation of the Tolosas and 7arcia. It presented documents consisting of the promissory note, deed of chattel mortgage, the deed of assignment of the Tolosas< credit 1y 4ilinvest 4inance, and the notice and demand letter to the Tolosas. It then su1mitted the case for decision. 0retrial for the complaint&in&intervention was postponed several times until "arch 1, 19 . The Tolosas were notified 1ut again failed to appear on said date. 4or the second time, the trial court declared them to have waived their right to present evidence as against the complaint and dismissed with pre'udice their third&party complaint against 7arcia and 6inan "otors. The court also declared them in default with respect to the complaint&in&intervention of 6artina and scheduled the reception of 6artina<s evidence accordingly. !t the hearing for reception of evidence on 6artina<s complaint&in&intervention, the Tolosas again did not appear. Intervenor 6artina testified that said vehicle was sold to her 1y 6inan "otors owned 1y 8duardo 7arcia and

that the vehicle was in her possession when it was sei%ed 1y the sheriff and given to Servicewide. She offered documents proving her ownership of the su1'ect vehicle. @n "ay *-, 19 , 6artina and the defendants&in& intervention 8duardo 7arcia and 6inan "otors moved to dismiss the complaint&in&intervention. They alleged that they had 9arrived at an amica1le settlement of their claims.9 The court granted the motion on "ay *+, 19 . @n !ugust -, 19 , the trial court.ruled in favor of Servicewide granting it the right to either foreclose the mortgage on the su1'ect vehicle or to demand from defendants, 'ointly and severally, payment of 0-+,**+.. and damages. Defendant 8duardo 7arcia moved for reconsideration on the ground that he was not one of the defendants in the principal case. Ae claimed that the court did not ac5uire 'urisdiction over his person 1ecause he was never served summons on the amended complaint naming him as an additional defendant. The trial court denied the motion for reconsideration. It amended the dispositive portion of the decision to include 8duardo 7arcia as one of the defendants lia1le to Servicewide. 8duardo 7arcia appealed to the )!. @n @cto1er *., 199+, the )! found that no summons on the amended complaint had 1een served on 7arcia2 however, since 7arcia filed several pleadings as a third&party defendant in the trial court, he was deemed to have su1mitted himself to its 'urisdiction. (onetheless, it found no sufficient evidence to hold 7arcia solidarily lia1le with the Tolosa spouses on the principal complaint and relieved 7arcia from lia1ility. Aence this petition. ISSUES: 1. "ay the compromise 1etween 6artina and 7arcia and 6inan "otors 1e ta$en as an admission of 7arcia<s lia1ilityB *. #as there sufficient evidence on record to hold 7arcia, together with the Tolosa spouses, solidarily lia1le to ServicewideB RULING: 1. (o, the compromise 1etween 6artina and 7arcia and 6inan "otors cannot 1e ta$en as an admission of 7arcia<s lia1ility. In civil cases, an offer of compromise is not an admission of any lia1ility. #ith more reason, a compromise agreement should not 1e treated as an admission of lia1ility on the part of the parties vis-a-vis a third person. The compromise settlement of a claim or cause of action is not an admission that the claim is valid, 1ut merely admits that there is a dispute, and that an amount is paid to 1e rid of the controversy, nor is a compromise with one person an admission of any lia1ility to someone else. The policy of the law should 1e, and is, to encourage compromises. #hen they are made, the rights of third parties are not in any way affected. 2. No, there was no sufficient evidence on record to hold 7arcia, together with the Tolosa spouses, solidarily lia1le to Servicewide. 4or one, the motor vehicle descri1ed in the 9!nswer to Third&0arty )omplaint9 has different motor and serial num1ers from the vehicle su1'ect of the complaint. The su1'ect vehicle is a galvani%ed silver 'eepney with "otor (o. )*+,&-1.--1 and Serial (o. )")I& 1,/-&) while the vehicle in said pleading is a red stainless 'eepney with "otor (o. )&**1&++-1++ and Serial (o. )")I& 1.95&). #hat 7arcia and 6inan "otors admittedly sold to the Tolosas was not the su1'ect vehicle. In the 9!nswer to the )omplaint in Intervention,9 7arcia and 6inan "otors admitted that they ac5uired from the Tolosas the 9vehicle su1'ect of the complaint in consideration of one )eleste 'eepney valued at 05/,,,,.,,.9 The vehicle su1'ect of the complaint was the one found in the possession of 6artira. >nder the two pleadings, however, what 7arcia and 6inan "otors sold to the Tolosa spouses was a different vehicle from the one they ac5uired from said spouses and which they allegedly sold to 6artina. ! dou1le sale of the same 'eepney could not arise 1ecause there appears to 1e two different 'eepneys in the pleadings. 8ven in the 9Deed of Sale with !ssumption of "ortgage9 where the Tolosa spouses allegedly sold to 7arcia the 'eepney su1'ect of the complaint, the vehicle descri1ed therein had different motor and chassis num1ers. The deed reveals that what the Tolosas sold to 7arcia was a red 'eepney with "otor (o. )*+,&-* --* and )hassis (o. )")I& *,/*&).The documentary evidence of 6artina merely shows that the 'eepney su1'ect of the complaint was indeed sold to her 1y 6inan "otors represented 1y Juliet 7arcia, 8duardo 7arcia<s daughter. There is nothing to show that 8duardo 7arcia sold to 6artina the vehicle that he previously sold to the Tolosas. The S) affirmed the )!Cs decision that it found no sufficient evidence to hold 7arcia solidarily lia1le with the Tolosa spouses on the principal complaint and relieved 7arcia from lia1ility.