​Malayan Insurance Company vs. Alibudbud, April 20, 2016

Facts:
Alibudbud was employed by Malayan as Senior Vice President (SVP) for its Sales Department. She was issued a 2004 Honda Civic sedan under Malayan's Car Financing Plan conditioned on the following stipulations: (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. Relatively, Alibudbud also executed a Promissory Note and a Deed of Chattel Mortgage in favor of Malayan. Alibudbud was dismissed from Malayan due to redundancy. In view thereof, Malayan demanded that she surrender the possession of the car to the company. Alibudbud sternly refused to do so. Malayan instituted a Complaint for replevin and/or sum of money before the Regional Trial Court (RTC) of Manila. Alibudbud filed a Motion to Suspend Proceedings, she explained that the resolution of the labor case will determine her rights and obligations, as well as that of Malayan. RTC denied the motion, It was opined that: (1) reference shall be made only on the Promissory Note which Alibudbud executed in favor of Malayan in determining the rights and obligations of the parties; (2) the cause of action in the replevin case is rooted from the Promissory Note; and (3) the issue in the labor dispute is in no way connected with the rights and obligations of the parties arising out of the Promissory Note. RTC granted the complaint for replevin. The CA set aside the decision of the trial court. It explained that the RTC has no jurisdiction to take cognizance over the replevin action because of the employer-employee relations between the parties which Malayan never denied.

Issue:
Whether or not the action is separate or distinct from the illegal dismissal case.

​Held:
Yes. The present action involves the parties' relationship as debtor and creditor, not their "employer-employee" relationship. 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. Clearly, the issue in the replevin action is separate and distinct from the illegal dismissal case. The Court further considers it justified for Malayan to refuse to accept her offer to settle her car obligation for not being in accordance with the Promissory Note and Deed of Chattel Mortgage she executed. Even the illegal dismissal case she heavily relied upon in moving for the suspension of the replevin action was settled in favor of Malayan which was merely found to have validly exercised its management prerogative in order to improve its company sales.