In Subic Bay Legend Resorts and Casinos, Inc. v. Fernandez, the Supreme Court addressed the issue of ownership of casino chips. The Court ruled that mere possession of casino chips creates a presumption of ownership, and the burden of proof lies with the casino to demonstrate that the chips were stolen. This decision underscores the importance of establishing clear evidence of theft or unlawful deprivation when contesting ownership of movable property.

Casino Chips and Confessions: Who Holds the Cards to Ownership?

The case revolves around a dispute over casino chips confiscated by Subic Bay Legend Resorts and Casinos, Inc. (Legenda) from Bernard Fernandez’s brothers, Ludwin and Deoven. Legenda alleged that the chips were stolen by their employee, Michael Cabrera, and then given to the Fernandez brothers for encashment. Bernard Fernandez, however, claimed that the chips belonged to him as payment for services rendered and that Legenda unlawfully confiscated them.

The Regional Trial Court (RTC) ruled in favor of Fernandez, ordering Legenda to return the casino chips. The Court of Appeals (CA) affirmed the RTC’s decision, emphasizing that possession of movable property creates a presumption of ownership under Article 559 of the Civil Code.

Article 559. The possession of movable property acquired in good faith is equivalent to a title. Nevertheless, one who has lost any movable or has been unlawfully deprived thereof, may recover it from the person in possession of the same.

Legenda appealed to the Supreme Court, arguing that the recanted statements of Ludwin and Deoven implicating Cabrera should be given probative value, and that the circumstantial evidence was sufficient to rebut the presumption of ownership. The Supreme Court, however, denied the petition.

The Supreme Court reiterated that factual findings of lower courts are binding and not subject to re-examination. The Court emphasized that Legenda failed to present sufficient evidence to prove that the casino chips were stolen. The Court noted that Legenda did not file a criminal case against Cabrera or the Fernandez brothers. Moreover, the Joint Affidavit, which was later recanted by the Fernandez brothers, does not even indicate that Cabrera stole the chips; it merely states that the chips came from Cabrera.

Building on this, the Supreme Court highlighted the importance of proving theft independently. It stated that it cannot be said that Ludwin and Deoven were dealing in or possessed stolen goods unless the independent fact that Cabrera stole the chips can be proved. The Court emphasized that the casino chips are considered to have been exchanged with their corresponding representative value. The Supreme Court also noted that:

Though casino chips do not constitute legal tender, there is no law which prohibits their use or trade outside of the casino which issues them. In any case, it is not unusual – nor is it unlikely – that respondent could be paid by his Chinese client at the former’s car shop with the casino chips in question; said transaction, if not common, is nonetheless not unlawful.

The Court also affirmed the award of attorney’s fees, finding that Legenda acted in bad faith by arbitrarily confiscating the casino chips and refusing to satisfy Fernandez’s claim. The Court based this on Article 2208 of the Civil Code:

Art. 2208. In the absence of stipulation, attorney’s fees and expenses of litigation, other than judicial costs, cannot be recovered, except:

(1) When exemplary damages are awarded;

(2) When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest;

(3) In criminal cases of malicious prosecution against the plaintiff;

(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid, just and demandable claim;

(6) In actions for legal support;

(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;

(8) In actions for indemnity under workmen’s compensation and employer’s liability laws;

(9) In a separate civil action to recover civil liability arising from a crime;

(10) When at least double judicial costs are awarded;

(11) In any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered.

In all cases, the attorney’s fees and expenses of litigation must be reasonable.

Therefore, the Supreme Court upheld the Court of Appeals’ decision, emphasizing the importance of establishing clear evidence of theft or unlawful deprivation when contesting ownership of movable property.

FAQs

What was the key issue in this case?	The central issue was whether Subic Bay Legend Resorts had the right to confiscate casino chips from Bernard Fernandez’s brothers based on suspicion of theft, and whether the evidence presented was sufficient to overcome the presumption of ownership.
What is the legal basis for the presumption of ownership?	Article 559 of the Civil Code provides that possession of movable property acquired in good faith is equivalent to a title, which creates a legal presumption of ownership.
What did the casino need to prove to reclaim the chips?	The casino needed to provide convincing evidence that the casino chips were stolen and that Fernandez or his brothers were unlawfully deprived of the chips.
Why was the recanted affidavit not given much weight?	The Supreme Court gave little weight to the recanted affidavit because affidavits of recantation are often viewed with skepticism due to their potential for being influenced by external factors.
Did the Court find any violation of rights in obtaining the affidavit?	The Court of Appeals found that Ludwin’s and Deoven’s statements and admissions at the Legenda security office are inadmissible because they were obtained in violation of their constitutional rights: they were held in duress, denied the right to counsel and the opportunity to contact respondent, and deprived of sleep
Why was the award of attorney’s fees upheld?	The award of attorney’s fees was upheld because the Court found that the casino acted in bad faith by arbitrarily confiscating the chips and refusing to satisfy Fernandez’s claim without sufficient evidence.
Does this ruling mean casino chips are legal tender?	No, the ruling explicitly states that casino chips are not legal tender, but it acknowledges that their use and trade outside the casino are not prohibited by law.
What is the practical implication of this ruling for casinos?	Casinos must have concrete evidence of theft or unlawful activity before confiscating chips from individuals. They cannot rely on mere suspicion or uncorroborated statements.
Can this ruling apply to other forms of movable property?	Yes, the principle established in this case, regarding the presumption of ownership based on possession, can be applied to other forms of movable property disputes.

This case clarifies the burden of proof in disputes over movable property, especially casino chips. It underscores the importance of due process and the need for solid evidence when contesting ownership.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: SUBIC BAY LEGEND RESORTS AND CASINOS, INC. VS. BERNARD C. FERNANDEZ, G.R. No. 193426, September 29, 2014