ELIGIO

ROQUE
and
RODRIGO
G.
MALONJAO, petitioners,
vs.
HON. COURT OF APPEALS, HON. JUDGE CARLOS L.
SUNDIAM,
(CFI-Manila,
Branch
XXVIII)
ASSOCIATED
BANKING
CORPORATION
FILEASTERN WOOD INDUSTRIES, INC., CITY SHERIFF
OF MANILA, DEPUTY SHERIFFS ADRIEL GARCIA and
BENJAMIN GARVIDA, respondents.
Laurel Law Office for petitioner.
Paterno C. Pajares for respondents.

MELENCIO-HERRERA, J.:
Treating this Petition as a special civil action for
Certiorari, we affirm the Decision of the Court of Appeals
denying petitioners' prayer to set aside the trial Court
Order, dated April 14, 1975, to surrender the barge in
question under pain of contempt, and its subsequent
Orders denying their Motion for Reconsideration.
There is no dispute as to the following background facts:
On January 31, 1973, respondent Associated Banking
Corporation (the Bank, for short) instituted an action,
Civil Case No. 89692, in the Court of First Instance of
Manila, Branch XXVIII, respondent Judge, presiding,
against private respondent Fil-Eastern Wood Industries,
Inc. (Fil-Eastern, for brevity), a domestic corporation, for
recovery of a sum of money.
Upon ex-parte application by the Bank for a Writ of
Preliminary Attachment, respondent Judge, after the
filing and approval of the required bond of P220,000.00,
issued, on February 4, 1974, an Order of Attachment
commanding the Sheriff to attach the estate, real and
personal, of Fil-Eastern. 1
On February 7, 1974, the Sheriff's "Notice of Levy
Pursuant to the Writ of Attachment" was registered in the
Office of the Commander of the First Coast Guard,
District of Manila, 2 pursuant to Sec. 805 of the Tariff and
Customs Code, as amended by Presidential Decree No.
34, requiring the registration of documents affecting titles
of vessels with that entity. The said notice read, "levy is
hereby made upon all the rights, titles, interest, shares
and participation which the defendant Fil-Eastern Wood
Industries, Inc. has or might have over a sea vessel or
barge named Fil-Eastern V.
It appears that prior to the issuance of said Writ of
Attachment, Fil-Eastern had delivered the barge to the
Cotabato Visayan Development Corporation sometime in

1
Page

G.R. No. L-42594 October 18, 1979

April, 1973, for repair. The job was completed in June

1973, but Fil-Eastern failed to pay the cost of repairs of
P261,190.59. Pursuant to the provisions of Article
2112 3in relation to Article 1731 4 of the Civil Code, the
Cotabato Visayan Development Corporation proceeded
before Notary Public Clemente R. Gonzales of Manila to
the sale of said barge. In the public auction sale
conducted by said Notary Public on April 24, 1974,
petitioner Eligio Roque acquired the barge as the highest
bidder, and was accordingly issued a Certificate of Sale
by the Notary Public. On the same date, the Cotabato
Visayan Development Corporation issued an Affidavit of
Release of mechanic's lien against Fil-Eastern. The
Certificate of Sale was received in the office of the
Philippine Coast Guard on May 3, 1974. 5 It wag not until
December 24, 1974, however, that Certificate of
Ownership No. 8647, a Certificate. of Philippine Register,
a Certificate of Change of Name of Vessel from FilEastern V" to "Satellite I I, " as well as a Coastwise
License, were issued to Roque by the Philippine Coast
Guard. 6 These muniments of title were issued only after
counsel for Eligio Roque had assured the Philippine Coast
Guard, in a letter dated November 13, 1974, that
"without touching on the merit of the preference of our
client's claim in relation to the levy registered by other
claimants, such levy is not in any manner a legal obstacle
to the registration of the vessels in our client's
name." 7 Acting thereon, the Acting Commandant of the
Philippine Coast Guard in a letter dated November 23,
1974, authorized the issuance of a new certificate of
registration annotating thereon any levy validly
registered against said vessel(s)." 8 However, neither the
Certificate of Ownership nor the Certificate of Philippine
Register appended as Annexes "C" and "D", respectively,
to petitioners' Urgent Manifestation and Motion filed
before the lower Court 9 carry that annotation.
On August 29, 1974, the Bank filed a "Motion for the
Issuance of Another Writ of Attachment" stating that at
the time of the issuance of the Writ on February 4, 1974,
the barge in question could not be located within the
jurisdiction of the trial Court. having been anchored
somewhere in the Visayas, and that actual levy on the
barge could not be made as "the original Order of
attachment is allegedly in the possession of the Branch
Deputy Sheriff appointed by the Honorable Court, who
has not reported to the office since August 26, 1974,
and, therefore, could not implement the writ." 10 On the
same date, August 29, 1974, the trial Court (Judge
Rafael S. Sison, presiding) denied the issuance of another
Writ (apparently ' v because it was deemed
unnecessary), but instead ordered the Deputy Sheriff of
Branch XXVIII to coordinate with the City Sheriff of
Manila in the implementation of the Writ previously
issued. 11On August 30, 1974, Deputy Sheriff Garvida
actually seized and levied upon the vessel.
On October 7, 1974, respondent Bank and respondent
Fil-Eastern submitted a Compromise Agreement whereby
Fil-Eastern bound itself to pay to the Bank the principal
amount of P200,000.00, with 1417,9 interest, plus other

Meanwhile, without prior authority from Deputy Sheriff

Garvida the barge in question was "spirited away" to
Bacolod City by a certain Captain Marcelino Agito, who
claimed to have been given the right to use the same by
Fil-Eastern. 12
On January 6, 1975, respondent Judge issued an Order
requiring Capt. Marcelino Agito, in coordination with
Deputy Sheriff Benjamin E. Garvida to bring back to
Manila the barge in question. 13
On March 7, 1975, respondent Judge issued a Writ of
Execution and ordered the sale of the barge at public
auction, as follows:
ORDER The Decision rendered by this Court
under date of October 9, 1974 having already become
final and executory, let a Writ of Execution be issued to
be enforced by Sheriff Adriel V. Garcia by conducting an
auction sale on the vessel placed under attachment. The
satisfaction of the judgment in this case shall be given
preference and the payment of the third party claim of
Alfredo H. Maligaya for and in behalf of Leonardo M.
Canoso shall be satisfied from whatever remaining
proceeds of the auction sale on the aforedsaid vessel, if
there be any. SO ORDERED. 14
On April 7, 1975, Capt. Marcelino Aguito and Deputy
Sheriff Benjamin Garvida filed a Manifestation stating
that petitioner Rodrigo Malonjao, acting for and in behalf
of his co-petitioner Eligio Roque, refused to-surrender the
barge on the ground I d that Eligio Roque is now the new
owner, having acquired the same by purchase at public
auction, and praying that petitioners, and all persons
claiming under them, be directed to surrender the barge
to the custody of the Court through its duly authorized
representative.

2
Page

amounts stated therein. On October 9, 1974, respondent

Judge approved the Agreement and rendered judgment
accordingly. On November 6, 1974, the Bank moved for
the issuance of a Writ of Execution for failure of FilEastern to make payments within the period stipulated in
the Compromise Agreement.

the above said vessel to Sheriff Adriel V. Garcia so that

the latter may be able to implement fully and
expeditiously the aforesaid Order of this Court dated
March 7, 1975. ... 15
On April 24, 1975, petitioners filed before the trial Court
an Urgent Manifestation and Motion seeking to set aside
the Order of April 14, 1975, claiming that Roque is now
the new owner of the barge having acquired the same at
a public auction sale arising from a mechanic's lien. The
Motion was denied by respondent Judge on the ground
that the records belied petitioners' claim that the auction
sale occurred very much ahead of the notice of levy.
Petitioners' first and second Motion for Reconsideration
were similarly denied. On July 16, 1975, respondent
Deputy Sheriff Adriel V. Garcia submitted a report
informing the Court that the barge in question had been
turned over to him and was anchored along Pasig River,
under guard.
On August 28, 1975, petitioners sought relief from the
Court of Appeals by filing a "Petition for certiorari and
Prohibition with Preliminary Injunction and Preliminary
Mandatory Injunction" assailing and asking to vacate the
Orders issued in Civil Case No. 89692 by respondent
Judge as well as the Writs, notices and other processes
emanating therefrom. The Court of Appeals, * in denying
the Petition in its Decision promulgated on November 24,
1975, ruled that certiorari did not lie as petitioner was
not without sufficient and adequate remedy to obtain
relief from the damaging effects of the Orders
complained of.
Petitioner filed the present Petition on March 1, 1976
before this Court, claiming that they are purchasers in
good faith and for valuable consideration, having actually
paid the total amount of P354,689.00 to the Cotabato
Visayan Development Corporation for three barges, one
of which is the barge in question. They have also raised
the following legal issues:
1.

The decision of the respondent Court of Appeals

sustaining the challenged orders, writs and other
processes issued by the respondent Judge is contrary
to the provisions of Art. 1731 in relation to Art. 2112
of the New Civil Code and to the ruling laid down in
Bank of P.I. vs. Walter A. Smith' & Co., 55 Phil. 533
and Bachrach Motor Co. vs. Mendoza, 43 Phil. 410.

2.

If the levy and/or attachment by the sheriff of the

barge in question are illegal, will herein petitioner be
required to avail of Section 14, Rule 57 and/or
Section 17, Rule 39 of the Revised Rules of Court?

On April 14, 1975, respondent Judge issued the following

Order:
Upon motion filed by Capt. Marcelino Agito and Deputy
Sheriff Benjamin Garvida and considering the absence of
a formal claim with this Court filed by Eulogio Roque,
personally or through counsel, relative to the barge
SATELLITE II, EX-FIL-EASTERN V', subject of the writ of
Attachment issued by this Court on February 7, 1974,
and in order to prevent further delay in the
implementation of the Order of this Court dated March 7,
1975, Rodrigo Malonjao and Eulogio Roque and an
persons claiming right under them over the aforesaid
vessel, including those acting under their direction or
supervision, are hereby ordered under pain of being cited
in contempt of Court to forthwith surrender possession of

On July 19, 1976, we issued a Restraining Order

enjoining respondents from proceeding with the
projected sale at public auction of the barge, subject of
this litigation. We also declared the case submitted for
decision. On January 18, 1977, the Bank filed a Motion
for Authority to Sell the barge under attachment. This

On May 31, 1979, the Bank filed a Motion for Early

Resolution, but the same was agendaed only on
September 24, 1979. We take note of the BANK's
contention that ever since the Sheriff took custody of the
vessel on July 16, 1975, the same has been lying Idle,
moored at the Muelle de la Industrial, Pasig River,
exposed to the elements, and has deteriorated rapidly,
hence the need for early resolution. It should be
reiterated that this is a special civil action for Certiorari,
the main requisites for the issuance of which Writ are: 1)
that the Writ be directed against a tribunal, board or
officer exercising judicial functions; 2) that such tribunal,
board or officer has acted without or in excess of
jurisdiction or with grave abuse of discretion; and 3) that
there is no appeal, nor any plain, speedy and adequate
remedy in the ordinary course of law. 16 While the first
requisite has been met, the second-hand the third have
not.
We agree with the findings of the Court of Appeals that
petitioners were not without any plain, speedy and
adequate remedy in the ordinary course of law. For one,
upon the issuance of the Order, dated August 29, 1974,
commanding the implementation of the Writ of
Attachment, petitioners could have availed themselves of
the remedy provided for in Section 14, Rule 57 of the
Rules of Court, which reads:
If the property taken be claimed by any
person other than the party against
whom attachment had been issued or
his agent, and such person makes an
affidavit of his title thereto or right to
the possession thereof, stating the
grounds of such right or title, and
serves such affidavit upon the officer
while the latter has possession of the
property, and a copy thereof upon the
attaching creditor, the officer shall not
be bound to keep the property under
attachment,
unless
the
attaching
creditor or his agent, on demand of the
said officer, secures him against such
claim by a bond in a sum not greater
than the value of the property
attached. ...
For another, when respondent Sheriff seized the vessel in
question to be sold at public auction in accordance with
the Order of execution of March 7, 1975, petitioner could
have availed of the remedy under Section 17, Rule 39 of
the Rules of Court which provides:
If the property levied on be claimed by
any other person than the Judgment
debtor or his agent, and such person
make an affidavit of his title thereto or
right to the possession thereof, stating
the grounds of such right or title, and

3
Page

was opposed, however, by petitioners and we resolved to

defer resolution until decision on the merits is rendered.

serve the same upon the officer making

the levy, and a copy thereof upon the
judgment creditor, the officer shall not
be bound to keep the property, unless
such judgment creditor or his agent, on
demand of the officer, indemnify the
officer against such claim by a bond in
a sum not greater than the value of the
property levied on. ...
Petitioner Eligio Roque argues, however, that he could not
avail of the foregoing Rules inasmuch as the vessel was
not in the actual custody of the Sheriff nor of the Court,
since the supposed levy by the Sheriff on February 7,
1974 was a mere paper levy which, in legal
contemplation, is no levy at an. It is a fact that
respondent Sheriff could not effect seizure immediately,
first, because the barge could nowhere be found in this
vicinity, and subsequently when found, because
petitioners would not deliver possession to the Sheriff. It
was not until the trial Court granted the Sheriff's Motion
praying for an Order directing petitioners or their agents
to surrender the barge to the custody of the Court, that
the Sheriff was able to take physical custody. As a
general rule, however, a levy of an attachment upon
personal
property
may
be
either
actual
or
constructive. 17 In this case, levy had been constructively
made by the registration of the same with the Philippine
Coast Guard on February 7, 1974. Constructive
possession should be held sufficient where actual
possession is not feasible, 18 particularly when it was
followed up by the actual seizure of the property as soon
as that could possibly be effected.
Petitioners further argue that the levy was illegal because
the Writ was implemented more than sixty days after its
issuance so that they need not have complied with
Section 14, Rule 57, supra. The Rules do not provide any
lifetime for a Writ of Attachment unlike a Writ of
Execution. But even granting that a Writ of Attachment is
valid for only sixty days, yet, since there was constructive
levy within that period the fact that actual seizure was
effected only thereafter cannot affect the validity of that
levy.
Neither can it be said that respondent Judge committed
grave abuse of discretion in issuing the challenged Order
of April 14, 1975, supra, whereby it commanded the
immediate implementation of the Order of execution of
March 7, 1975 and ordered petitioners to surrender
possession of the barge to the Sheriff under pain of
contempt. A trial Court is enjoined by law to bring about
a prompt dispatch of the controversy pending before it.
As it was, it took the trial Court more than a year to
cause the enforcement of its Writs and processes.
Moreover, its Decision of October 9, 1974 had become
final and executory, and execution then became purely a
ministerial phase of adjudication. It had no jurisdiction to
pass upon petitioners' claim of ownership not only
because trial in that, case had already been terminated
but also considering that petitioners were not parties in

Verily, petitioners' remedy was to ventilate their claims of

ownership in a separate and independent reivindicatory
action, as even then suggested by the Court of Appeals.
That was the arena where the question of preferential
rights, if any, impliedly raised in the first assigned error,
could have been fully threshed out.
...a third person claiming to be the
owner of the property attached or
levied upon is required to file a
separate or independent action to
determine whether the property should
answer for the claim of the attaching or
judgment creditor instead of being
allowed to raise that issue in the case
where the writ of attachment or
execution was issued (Sec. 17, Rule 39
and sec. 14, Rule 57, Rules of Court;
Bayer Philippines, Inc. vs. Agana, L38701, April 8, 1975, 63 SCRA 355). 19
In the interest of justice, petitioners can still file an
independent civil action to establish their ownership over
the barge, if they have not yet done so.
WHEREFORE, in the absence of jurisdictional errors, this
Petition is dismissed, and the Restraining Order,
heretofore issued, hereby lifted effective immediately.
No costs.
SO ORDERED.

G.R. No. L-13281

August 31, 1960

SIARI
VALLEY
ESTATES,
INC., petitioner,
vs.
FILEMON LUCASAN, ET AL., respondents.
Orendain
and
Sarmiento
for
petitioner.
Barrios, Lucasan and Lucasan for respondents.

4
Page

the case below nor had they filed any third-party claim
for the enforcement of their rights.

BAUTISTA ANGELO, J.:

On January 30, 1952, the Court of First Instance of
Zamboanga del Norte rendered decision ordering Filemon
Lucasan to deliver to the Siari Valley Estates, Inc. the
cattle inside the former's pasture or pay its value
amounting to P40,000.00 and damages in another sum of
P40,000.00, This decision was affirmed in toto by the
Supreme Court, and when the same became final and
executory, a writ of execution was issued. In carrying out
this writ, the sheriff proceeded to levy on certain parcels
of lands belonging to defendant. These lands were sold
by the sheriff at public auction to the corporation as the
highest bidder on January 14, 1956. The judgment
debtor having failed to redeem the land within the period
of one year, on January 26, 1957, the sheriff issued in
favor of the purchaser the final certificate of sale, copy of
which was registered in the Office of the Register of
Deeds of Zamboanga. On February 16, 1957, upon
petition of the corporation, a writ of possession was
issued directing the sheriff to place said corporation in
possession thereof. Notwithstanding said writ, however,
the corporation failed to take possession of the lands,
hence it filed a motion reiterating its petition that it be
placed in their possession.
This time judgment debtor Filemon Lucasan filed an
opposition alleging that he was in possession of one of
the parcels of land sold at public auction on which he has
erected a house and which he has extra judicially
constituted as a family home, the rest being in
possession of third parties. On April 30, 1957, the court,
overruling the opposition, issued an order directing the
sheriff to place the corporation in possession of the lands
sold to it. On August 7, 1957, debtor Lucasan filed a
motion for reconsideration which was denied, the court
reiterating its previous order with little amendment, but
on August 23, 1957 issued another order allowing the
corporation to take possession of all lands sold, with the
exception of parcel 1 on which the family home was
constituted, holding that the levy and sale made by the
sheriff with regard to said parcel were not made in
accordance with law and so are null and void. Having
failed to have this last order reconsidered, the
corporation interposed the present petition for certiorari.
It appears that parcel 1 is a registered land covered by
Certificate of Title No. OCT-2492, Patent No. 50967, duly
registered in the Office of the Register of Deeds of
Zamboanga del Norte in the name of Filemon Lucasan.
On this land stands a big house of mixed materials which
is asserted in the amount of P23,270.00 as evidenced by
Tax Declaration No. 7653. It also 37 3 appears that
Filemon Lucasan and his wife constituted this house and
the lot on which stands into a family home, the pertinent
document having been registered in the office of the
register of deeds on June 21, 1955. In opposing the
petition of the corporation for a writ of possession insofar
as this property is concerned, Lucasan contended that
said lot and house having been constituted as a family
home are beyond the reach of judicial execution. He
contended that the levy made by the sheriff on said

There is merit in this contention. The evidence shows

that when this property was levied on execution by the
sheriff to satisfy the judgment rendered against Filemon
Lucasan in favor of petitioner corporation the notice of
levy merely described the property as unregistered land
and the same was registered under Act 3344 in the office
of the register of deeds. It also appears that in the notice
of sale the property was merely described according to
the boundaries and area appearing in the tax declaration
and not according to what appears in the certificate of
title. On the other hand, the rule provides that real
property shall "be levied on in like manner and with like
effect as under an order of attachment" (Section 14, Rule
39), and the provision regarding attachment of real
property postulates that the attachment shall be made
"by filing with the register of deeds a copy of the order,
together with the description of the property attached,
and a notice that it is attached, and by leaving a copy of
said order, description, and notice with the occupant of
the property, if any there be," and that "Where the
property has been brought under the operation of the
Land Registration Act, the notice shall contain a reference
to the number of the certificate of title and the volume
and page in the registration book where the certificate is
registered" (Section 7 [a], Rule 59).
These provisions should be strictly construed if their
purpose has to be accomplished. The requirement that
the notice of levy should contain a reference to the
number of the certificate of title and the volume and
page in the registration book where the certificate is
registered is made in order that the debtor as well as a
third person may be properly informed of the particular
land or property that is under the custody of the court.
This can only be accomplished by making a reference to
the certificate of title covering the property. The situation
differs if the land is unregistered in which case it is
enough that the notice be registered under Act 3344.
This conclusion finds support in the following authorities:
An attachment levied on real estate not duly
recorded in the registry of property is not an
encumbrance on the attached property, nor can
such attachment, unrecorded in the registry,
serve as a ground for decreeing the annulment
of the sale of the property, at the request of
another creditor. (Gonzales Diez vs.Delgado and
Imperial, 37 Phil., 389)
... In conformity with the provisions of section
71 of the Land Registration Act, the sheriff of the
City of Manila filed a notice of the levy with the
register of deeds, which notice was entered in
the primary entry book of the register's office,
but was afterwards, on May 20, 1920, returned
to the sheriff with the information that the
property was registered in the name of

5
Page

property is legally ineffective because it was not effected

in accordance with what is prescribed in Section 14, Rule
39, in relation to Section 7, Rule 59, of the Rules of
Court.

Buenaventura Dizon, having been conveyed to

the latter by the defendant in execution,
Celerino Arellano, and that, therefore, no
memorandum of the notice had been entered
upon the outstanding certificate of title. It may
be noted that the notice contained no "reference
to the number of the certificate of title of the
land to be effected and the volume and page in
the registry book where the certificate is
registered, and that t that extent, the notice did
not meet the requirements of said section 71.
(De Ocampo vs. Treasurer of the Philippine
Islands, 50 Phil., 140, 141; Emphasis supplied).
Since the notice of levy made by the sheriff as regards
parcel number 1 which is a registered land contains no
reference to the number of its certificate of title and the
volume and page in the registry book where the title is
registered, it follows that said notice is legally ineffective
and as such did not have the effect of binding the
property for purposes of execution. Consequently, the
sale carried out by virtue of said levy is also invalid and
of no legal effect.
The second issue raised is: Is the family home extra
judicially established by respondent on the lot and house
in question exempt from execution?
Respondent sustains the affirmative considering that the
money judgment rendered against him was appealed to
the Supreme Court in which event, he contends, the
same could not be considered as a debt at the time the
family home was constituted for it was still inchoate and
as such cannot come under the provisions of Article 243
(2) of the new Civil Code.
The article above referred to provides that "The family
home extra judicially formed shall be exempt from
execution" except "for debts incurred before the
declaration was recorded in the Registry of Property."
What if the meaning of the word debt used in this article?
Does it refer to a debt that is undisputed, or may it also
refer to any pecuniary obligation even if the same has
not yet been finally determined? In other words, can a
judgment for a sum of money be considered a debt
within the meaning of this provision even if said
judgment is still pending appeal?
We are inclined to uphold the affirmative considering the
real purpose of the law. The reason why a family home
constituted after a debt had been incurred is not exempt
from execution is to protect the creditor against a debtor
who may act in bad faith by resorting to such declaration
just to defeat the claim against him. If the purpose is to
protect the creditor from fraud it would be immaterial if
the debt incurred be undisputed or inchoate, for a debtor
acting in good faith would prefer to wait until his case is
definitely decided before constituting the family home.
Indeed, it may result, as in this case, that the Supreme
Court may affirm the judgment of the lower court. If the
contention of respondent be sustained a debtor may be
allowed to circumvent this provision of the law to the

WHEREFORE, the order appealed from is hereby affirmed,

without prejudice of the part of petitioner to file a new
petition for execution following strictly the requirements
of the rule on the matter. No pronouncement as to costs.

On May 6, 1966 the respondent Court granted the

motion for execution pending appeal and at the same
time ordered that to stay the execution, the defendant
put up a supersedeas bond in the amount of P40,000.00
for the rents due as of February, 1966, for the amount of
moral damages, and for the expenses of suit and to
deposit the amount of P500.00 as monthly rental of the
property. This order became the subject of a Special Civil
Action for certiorari and prohibition before the Supreme
Court and by reason of the pendency of said special civil
action the order of execution was not enforced by the
plaintiff.
On December 10, 1966, the record on appeal was
approved and the appealed case is now docketed as CAG.R. No. 39115-R, in this Court.

G.R. No. L-34657 October 23, 1979

ERLINDA
RAVANERA
and
husband
RAVANERA, petitioners,
vs.
FELIPE I. IMPERIAL, respondent.

Page

prejudice of the creditor. This the Court cannot

countenance. Hence, we are persuaded to conclude that
the money judgment in question comes within the
purview of the word debt used in Article 243 (2) of the
new Civil Code.

OSCAR

Borja & Naval for petitioners.

Abonal & Abonal for respondent.

DE CASTRO, J.:
Appeal by certiorari taken by petitioners from (a) the
decision of the Court of Appeals in CA-G.R. No. SP00080, entitled "Felipe I. Imperial, petitioner versus Hon.
Delfin Vir. Sunga, Judge, Court of First Instance of
Camarines Sur, Erlinda Ravanera and husband Oscar
Ravanera, respondents" promulgated on November 16,
1971 setting aside the orders dated March 18, 1971 and
March 30, 1971 issued by the Court of First Instance of
Camarines Sur in Civil Case No. 5292, entitled "The
Roman Catholic Archbishop of Caceres, plaintiff, versus
Felipe I. Imperial, defendant," and from (b) the former's
resolution of January 10, 1972 denying petitioners'
motion for reconsideration.
The facts found by the Court of Appeals are as follows:
It appears that on October 17, 1961 the Roman Catholic
Archbishop of Caceres filed an action for Rescission of
Contract and Recovery of Possession against the herein
petitioner before the respondent court. Said case was
decided by the respondent court in favor of the plaintiff
on January 28, 1966.
On February 17, 1966 pending approval of the Record on
Appeal, plaintiff Archbishop of Nueva Caceres filed a
Motion for Execution of the decision or to order
defendant to file supersedeas bond and to deposit the
amount of P500.00 every month as rentals.

On May 22, 1968, the Supreme Court dismissed the

petition for certiorari on the ground that the order of
execution being incidental to the appeal, the same should
be addressed to the Court of Appeals. So on June 21,
1968, the plaintiff filed another motion for execution. On
July 16, 1968 the respondent Court ordered the issuance
of a writ of execution, but the petitioner was given fifteen
(15) days from receipt of the order to put up the
P40,000.00 supersedeas bond and to deposit the
monthly rental of P500.00 in order to stay the execution.
Inspite of his receipt of the order on July 23, 1968,
petitioner failed to post the required supersedeas bond
and to deposit the P500.00 monthly rental. Thus, on
November 20, 1968, the plaintiff Archbishop filed a
motion for the issuance of a writ of execution. On
December 20, 1968 the respondent Court granted the
motion for execution requiring however the plaintiff to
put up a bond in the amount of P20,000.00 to answer for
any judgment that may be awarded to petitioners should
the decision be reversed on appeal.
The plaintiff Archbishop posted the required bond of
P20,000.00 and on February 14, 1969 a writ of execution
was issued. Said writ was not enforced upon instance of
the counsel for plaintiff as an amicable settlement was
proposed and after the 60 days period had lapsed the
Sheriff made a return of the writ stating therein:
This is to certify that this writ was not
acted upon at the instance of counsel for the
plaintiff for the reason that amicable settlement
between parties was proposed.Upon request of
counsel for the plaintiff let this writ be returned
and an alias writ be issued for the proposed
amicable settlement abovestated failed to
materialize.
Pursuant to this return, the Clerk of Court of the
respondent Court, issued an alias writ of execution on
August 24, 1969. On September 24, 1969 the Sheriff
issued a notice of Levy by which certain properties of the
petitioner were attached or levied upon. On September
25, 1969 the alias writ was personally served by the

On November 7, 1969 the public auction sale was held,

and the respondent Erlinda Ravanera being the highest
bidder a Provisional Deed of Sale was issued in her favor.
Within the one-year period of redemption, the petitioner
redeemed some of the properties bought at auction sale,
but he failed to redeem some others on account of which
at the end of the redemption period or on December 8,
1970 the Sheriff executed a Definite Deed of Sale of said
unredeemed properties in the name of respondent
Erlinda Ravanera. She likewise paid the arrears in real
estate taxes of said properties, redeemed a mortgage on
one of them and caused the property to be declared in
her name.

7
Page

Sheriff upon the petitioner. On October 7, 1969, the

Sheriff issued a Notice of Public Auction sale of the
properties levied upon which was published in the "Bicol
Star" a weekly newspaper of general circulation on
October 11, 18 and 25, 1969. Private respondent alleges
that copies of the Notice of Levy and the Notice of Sale
were sent by Registered Mail which according to the
certificate of the Postmaster was received on October 15,
1969. Receipt of the Notice of Levy is denied by
petitioner.

4.

That Erlinda Ravanera has no personality to file

Motion for Writ of Possession;

5.

That there was no formal hearing or reception of

evidence from the parties;

6.

That there is a pending appeal before the Court

of Appeals under G.R. No. 39-115-R;

7.

That order issuing the Writ of Possession did not

state findings of facts as basis for the order or
issuance of the writ;

8.

That the price for which the properties have

been bidded is grossly inadequate and is
therefore unconscionable amounting to lack of
consideration.
From the facts recited in the complaint,
the answer as well as the decision of
the respondent court appears that the
main case partakes more of the nature
of an unlawful detainer and damages
case rather than one for recission of
contract as it is admitted by the parties
that the contract of lease had already
expired and there is no showing that
the same had been expressive or
impliedly renewed. Hence there was
actually no contract to be rescinded and
subsequent orders of the respondent
court reveal that it considered the case
as one for ejectment and damages. 1

On February 9, 1971 respondent Erlinda Ravanera filed a

motion for a writ of possession of the properties covered
by the Definite Deed of Sale, to which motion petitioner
filed his opposition alleging that the notice of levy was
null and void and hence the provisional as well as the
definite deed of sale were likewise void, and that
respondent Ravanera had no personality in the case, she
not being a party thereto.
On March 18, 1971, the respondent Court issued an
order granting the motion for a writ of possession and on
March 27, 1971 the petitioner filed a motion for
reconsideration on the ground that there was no formal
hearing and reception of evidence on the motion and that
the order did not state the finding of facts which could be
the basis for the grant of the motion. On March 30, 1971
the respondent Court issued an order denying the motion
for reconsideration, however, it suspended the effectivity
of the writ of possession to April 25, 1971. Hence this
petition.
The petitioner attacks the order of March 15, 1971
granting the motion for a writ of possession on the
following grounds:
1.

That the writ of execution issued by the Court

on December 30, 1968 is void defendant having
on December 10, 1966 perfected his appeal;

2.

That the Alias writ of Execution issued by the

Deputy Provincial Sheriff is void there having
been no order corning from the Court granting
such issuance of an Alias Writ;

3.

Notice of Levy Null and Void;

On November 16, 1971, the Court of Appeals rendered a

decision setting aside the orders dated March 18, 1971
and March 30, 1971 issued by the Court of First Instance
of Camarines Sur and making the preliminary injunction
previously issued permanent. 2
Petitioners filed a motion for reconsideration of the
decision which was denied by the Court of Appeals in its
resolution of January 10, 1972. 3
From the above-mentioned decision and resolution,
petitioners seek in this petition to correct errors
committed by the Court of Appeals as follows:
1.

The Court of Appeals erred in annulling the

Notice of Levy merely because it did not comply
with some of the formal requirements of the
Rules of Court which were not shown to have
prejudiced any substantial rights of the
respondent Imperial;

2.

The Court of Appeals erred in applying to

unregistered parcel of land and the
unregistered residential house described in
Notice of Levy the formal requirements of

one
one
the
the

3.

The Court of Appeals erred in requiring service

upon respondent Imperial of the Notice of Levy
before the publication of the Notice of Public
Auction Sale considering that the Rules of Court
does not so require;

4.

That the Court of Appeals erred in not applying

to the case at bar the presumption of regularity
in the official acts and proceedings of the Sheriff,
particularly in the matter of leaving with the
occupant of the land, copy of the Notice of Levy,
considering that there is no evidence to the
contrary;

5.

6.

7.

The Court of Appeals erred in not applying

against respondent Imperial the principle of
estoppel or waiver of whatever procedural
defects there were in the Levy when he
repurchased part of the properties levied upon
by the Sheriff but failed to repurchase properties
which are now in question herein;
That the Court of Appeals erred in not
considering
against
respondent
Imperial
undisputed facts which show bad faith and intent
to delay the proceedings and to thwart a fair
administration of justice,
The Court of Appeals erred in not considering in
favor of the petitioners undisputed facts showing
that they were innocent purchasers for value,
and therefore, should not be made to suffer the
prejudice caused by the alleged invalidity or
ineffectiveness of the levy. (pp. 9-1 0, Rollo)

The main issue raised before Us in this petition is

whether or not there was a valid levy upon the properties
of respondent Felipe I. Imperial.
The Court of Appeals annulled the levy and all the
proceedings subsequent thereto on two grounds, to wit:
1) The occupants or possessors of the properties levied
upon were not furnished with a notice of levy and as
Section 7 of Rule 57, paragraph (a) makes this a
requirement for the validity of the levy, non-compliance
therewith has made the levy ineffective, and 2) The
Notice of levy made by the sheriff did not contain the
volume and the page in the Registry where the
certificates registered. 4
Anent the first ground, the Court of Appeals, in support
thereof, cited the case of Philippine Surety vs.
Zabal 5wherein this Court held:
In the case at bar, no notice of the levy
was given to the occupant of the land.
There was, therefore, no valid levy on
the land, and its registration in the

8
Page

Rules of Court which are applicable only to

registered properties;

registry of deeds and annotation in the

title were invalid and ineffective. The
fact that the person in whose name the
land was registered was duly notified of
the attachment does not cure the
defect, because personal service of the
copy of the writ, description of the
property and notice to the owner, who
is not the occupant, does not constitute
compliance with the statute.
The evident purpose of the law in
imposing these requirements is to
make the levy public and notorious, to
prevent liens from attaching secretly
and by surreptitious entries and
endorsements, and to enable the
affected party to inquire into the date
and circumstances surrounding the
creation of the encumbrance, as well as
to give him ample opportunity to file
timely claims to the property levied
upon.
The ruling relied upon by the Court of Appeals has
already been modified by the case of Pamintuan vs.
Muoz, 22 SCRA 1109 wherein tills Court briefly stated:
Petitioners finally argue that they had
not been served a notice of the levy nor
a notice of the sale as required by the
Rules. The sheriffs return, however
shows that the notice of levy had been
registered with the Register of Deeds
pursuant to Rule 57, Section 7 in
connection with Rule 39, Section 15 of
the Rules, and that the notice of sale
had been sent by registered mil on
December 28, 1964, to petitioners.
Even assuming then that petitioners
were not served a copy of the notice of
levy, yet We have already ruled in
Philippine Bank of Commerce vs.
Macaraeg, L-14174, October 31, 1960,
that this defect is cured by service of
notice of sate upon the judgment
debtors prior to the sale, which was
done here. The levy was validly effected
then.
It appears in this case that the notice of levy was
registered with the Register of Deeds on September 29,
1969. From a certification of the Postmaster at Naga City,
it also appears that registered letter No. 13681
containing the notice of levy and the notice of auction
sale addressed to respondent Felipe Imperial was
delivered on October 15, 1969 to Pelaguia Comba,
member of the household of the addressee. Respondent
Imperial was, therefore, notified by registered mail of the
levy and the auction sale long before November 3, 1969,
the date of the auction sale. What is required is that the
judgment debtor must be notified of the auction sale

It cannot be gainsaid that if it were only to afford an

opportunity to respondent Imperial to avoid the auction
sale, he had ample opportunity to file his objection to
such sale because the auction sale took place on
November 3, 1969. The respondent had nineteen days
after he received the notice of levy and the notice of
auction sale on October 15, 1969 and thirty-nine (39)
days from September 25, 1969 when he was served
personally by the Sheriff a copy of the writ of execution
to avoid the sale had he wanted to. Moreover, he had
exactly one year from November 27, 1969 when the
provisional Deed of Sale executed in favor of the
petitioner was registered with the Register of Deeds to
redeem the property.
Regarding the second ground, We are constrained to
make a distinction for the levy of property registered
under Act 496 (Land Registration Act) and the property
not brought under the operation of said Act.
The Court of Appeals concluded in its Resolution dated
January 10, 1972 that the requirements of Section 7 of
Rule 57 do not make distinction whether the property is
under the operation of the Land Registration Act or not.
Petitioners contend otherwise and such contention is not
without merit, under the provisions of Section 15
(Paragraph 2) of Rule 39 and Section 7 (Paragraph a) of
Rule 57, which are pertinent.
Section 15 (Paragraph 2) of Rule 39 expressly provides:
xxx xxx xxx
Real property, stocks, shares, debts,
credits and other personal property, or
any interest in either real or personal
property, may be levied on in like
manner and with like effect as under a
writ of attachment.
Section 7 (paragraph a) of Rule 57 also provides the
following:
Attachment of real and personal
property, recording thereof.- Properties
shall be attached by the officer
executing the order in the following
manner:
(a) ... Where the property had been
brought under the operation of the
Land Registration Act, the nonce shall
contain a reference to the number of
the certificate of title and the volume
and page in the registration book where
the certificate is registered. The
registrar must index attachments filed

9
Page

before the actual date of sale which was done in the case
at bar. 6

under this paragraph in the names both

of the plaintiff and of the defendants.
Section 7 (paragraph a) of Rule 57 is so explicit that only
as to property which has been brought under the
operation of the Land Registration Act should the notice
of levy contain the volume and page in the registration
book where the certificate is registered, impliedly, the
requirement does not apply to property not registered
under the said Act. It is enough that the notice of levy
upon unregistered land be registered under Act 3344, as
was done in this case.
In the case of Siari Valley Estates vs. Lucasan, 7 which
clearly applies to this case, it was held by this Court:
The requirement that the notice of levy
should contain a reference to the
number of the certificate of title and the
volume and page in the registration
book where the certificate is registered
is made in order that the debtor as well
as a third person may be properly
informed of the particular land or
property that is under the custody of
the
court.
This
can
only
be
accomplished by making a reference to
the certificate of title covering the
property. The situation differs if the
land is unregistered, in which case it is
enough that the notice be registered
under Act 3344. This conclusion finds
support in the following authorities:
An attachment levied on real estate not
only recorded in the registry of
property is not an encumbrance on the
attached property, nor can such
attachment, unrecorded in the registry,
serve as a ground for decreeing the
annulment of the sale of the property,
at the request of another creditor.
(Gonzalez
Diez
v.
Delgado
and
Imperial, 37 Phil. 389)
... In conformity with the provisions of
Section 71 of the Land Registration Act,
the sheriff of the City of Manila filed a
notice of the levy with the register of
deeds, which notice was entered in the
primary entry book of the register's
office, but was afterwards, on May 20,
1920, returned to the sheriff with the
information that the property was
registered in the name of Buenaventura
Dizon, having been conveyed to the
latter by the defendant in execution,
Celerino Arellano, and that, therefore,
no memorandum of the notice had
been entered upon the outstanding
certificate of title. It may be noted that
the notice contained no reference to

The properties which were acquired by the petitioners as

the highest bidders in the auction sale on November 3,
1969 are as follows:
1.

A parcel of land located at Naga City registered

under Act 496 and covered by Transfer
Certificate of Title No. 257;

2.

A two-storey residential house located at Naga

City not registered under Act 496 but covered by
Tax Declaration No. 14276; and

3.

A parcel of residential land located at Naga City

not registered under Act 496 but covered by Tax
Declaration No. 8732. (Annex J to Petition,
pages 39 and 40, Rollo.)

From the records of the case, the notice of levy made by

the sheriff as regards the registered land contains
reference to the number of its certificate of title but not
to the volume and page in the registry book where the
title is registered. Nevertheless from what was stated in
the case of Siari Valley Estate vs. Lucasan, supra, it
would seem that the purpose of the requirement of
Section 7(a), Rule 39 of the Revised Rules of Court is
substantially complied with. This is more so where as in
this case, there appears in the notice of levy the following
certification:
It is hereby certified that this
instrument has been duly registered
proper memorandum hereof made on
transfer Certificate of Title No. 257 &
258 and on its owner's duplicate Reg.
Book No. 3; File No. 1-248.
Naga City, Sept. 29, 1969.
Reference to the number of the certificate of title of every
registered land in the notice of levy, together with the
technical description thereof, would certainly suffice to
inform the debtor, as well as third persons what
particular land or property is brought to the custody of
the court, as is the purpose of the aforecited provision of
the Rules of Court. Incidentally, no third person appears,
to be interested in the matter now before this Court.
From the fact that respondent Imperial was able to
exercise his right of redemption with reference to three
registered parcels of land, it can be easily deduced that
insofar as respondent Imperial is concerned, the purpose
of the requirement of reference having to be made to the

10
Page

the number of the certificate of title of

the land to be effected, and the volume
and page in the registry book where
the certificate is registered, and that to
that extent the notice did not meet the
requirements of said section 71. (De
Ocampo v. Treasurer of the Philippine
Islands, 50 Phil. 140, 141; Emphasis
supplied.)

number of the certificate of title, and also the volume and

page in the registration book where the certificate is
registered, has been fully served or attained.
It may also be pertinent to note that in the Siari Valley
case, heavily relied upon by the respondent court in
voiding the notice of levy in the instant case, the land
involved which was actually registered with OCT No. 2492
was described in the notice of levy as unregistered land,
which was thus a misleading information.
We, therefore, find no substantial defect in the notice of
levy on all the properties levied upon and sold to
petitioners in the auction sale, that should be a basis, as
the respondent court deemed it to be, for annulling the
sale made pursuant to the levy.
Respondent Imperial also brands the levy as irregular for
failure of the occupants of the attached or levied
properties to be left with copy of the order, notice of levy
and description of the properties. The finding of facts of
the respondent Court of Appeals which was quoted in full
above, fails to disclose the existence of occupants of the
properties levied upon other than the owner, respondent
Imperial. It was incumbent on said respondent to prove
by evidence duly submitted to the Court a fact that would
tend to support his claim that the levy is void or
otherwise illegal. The levy being an official act of a
government functionary its regularity is presumed.
The alleged inadequacy of the purchase price of the
properties sold in the execution sale is no ground to
assail the validity of the sale, for the judgment debtor
has the right to redeem the property, and the smaller the
price, the easier is it for him to buy back the property. 8
Respondent Imperial goes back to the issuance of the
order of execution on December 30, 1968 to show that
the order is invalid because it was issued after he has
perfected his appeal on December 10, 1966 (p. 22,
Respondent's Brief). What the Court of Appeals, however,
stated in its decision is that "on February 17, 1966,
pending approval of the Record on Appeals, plaintiff
Archbishops of Nueva Caceres filed a Motion for
Execution of the decision or to order defendant to file
supersedeas bond and to deposit the amount of P500.00
every month as rentals," and that on May 6, 1966, the
respondent court (CFI of Camarines Sur) granted the
motion for execution pending appeal. This order was
brought up by respondent Imperial to the Supreme Court
on certiorari as a special civil action, resulting in the stay
of the enforcement of the order of the execution. The
special civil action, however, was dismissed on May
22,1968, by the Supreme Court, and the dismissal
merely reactivated the order of execution pending appeal
issued on May 6,1966.
Clearly, the original order of execution pending appeal
was perfectly valid, and the issuance of alias writ when
the original writ was not acted upon at the instance of
the plaintiff for the reason that amicable settlement

In any event, respondent Imperial as judgment debtor is

in estoppel by his failure to seasonably make an
objection to the allegedly defective notice of levy and
notice of sale before the actual sale, or before redeeming
some of his properties despite the supposed defect of the
notice of levy. He should have interposed objection to the
levy and the sale from the very beginning, from October
15, 1969 when he received notice of levy and notice of
sale. A waiver on his part to question the validity of the
auction sale may also be said to arise from his failure to
pay the arrears in real estate taxes, or to redeem the
mortgage of one of the properties sold at public auction,
during the period of redemption. These are omissions
which are clearly an indication of acquiescence in the
sale, or his awareness that the execution sale was valid
and legally unassailable. To allow him to turn back on his
manifest conformity to the levy and sale on execution of
his properties, after petitioners have bought the property
as the highest bidder during the auction sale, would be
patently unjust to the said petitioners, who had every
reason to rely on the presumed regularity of the
proceedings as official acts of both the judge and his own
court officer, the sheriff.
WHEREFORE the decision appealed from is hereby
reversed. The notice of levy and the sale of the
properties in question, both registered and unregistered
in favor of the petitioners are hereby declared valid. No
pronouncement as to cost.

11
Page

between the parties was proposed but failed to

materialize, did not affect the validity of either the
original or alias writ of execution. Accordingly, We rule
that contrary to the contention of respondent Imperial
(see pages 22-23, Brief for the Respondent), the writ of
execution that gave rise to the levy of the properties in
question and their sale in a public auction is valid and
regular in all respects. 'That the alias writ of execution
was issued by the Clerk of Court and not by the judge is
no ground for holding invalid said alias writ, considering
that the Clerk of Court is not without authority to issue
ordinary writs and processes, under the seal of the Court
(Session 4, Rule 136, Revised Rules of Court).

its value in the amount of P37.25 per cavan, with legal

interest from the filing of the Complaint until fully paid.
SANDOVAL is the owner and manager of the "Sandoval
and Sons Rice Mill" located in Rosales, Pangasinan. He is
engaged in the buying and selling of palay.
On November 21, 1964, SANDOVAL was approached by a
certain Chan Lin who offered to purchase from him 170
cavans of clean rice (wagwag variety) at the price of
P37.26 per cavan, delivery to be made the following day
at petitioner's store in San Fernando, La Union, with
payment to be made thereat by Chan Lin to SANDOVAL's
representative. SANDOVAL accepted the offer as he knew
petitioner and had had previous transactions with him.
As agreed, the 170 cavans of rice were transported the
following day on a truck belonging to SANDOVAL to
petitioner's store in San Fernando, La Union. Chan Lin
accompanied the shipment. Upon arrival thereat, the
goods were unloaded but when the truck driver
attempted to collect the purchase price from Chan Lin,
the latter was nowhere to be found. The driver tried to
collect from petitioner, but the latter refused stating that
he had purchase the goods from Chan Lin at P33.00 per
cavan and that the price therefore had already been paid
to Chan Lin.
Further demands having been met with refusal,
SANDOVAL, as plaintiff, filed suit for replevin against
petitioner, then the defendant, before the Municipal Court
of San Fernando, La Union, which ordered petitionerdefendant to pay to SANDOVAL one-half () of the cost
of the rice or P2,805.00.
On appeal by petitioner-defendant to the then Court of
First Instance of La Union, the parties agreed to adopt
SANDOVAL's testimony before the Municipal Court. After
trial de novo, judgment was rendered dismissing the
complaint against petitioner-defendant.
On appeal to respondent Appellate Court, SANDOVAL
obtained a reversal in his favor, as follows:

SO ORDERED.
G.R.NO. L-36249 March 29, 1985
ANIANO
vs.
THE
COURT
OF
APPEALS
SANDOVAL, respondents.

OBAA, petitioner,
AND

ANICETO

MELENCIO-HERRERA, J.:

WHEREFORE, the appealed decision is

hereby set aside and another one
entered ordering defendant-appellee to
return the one hundred and seventy
cavans of rice to plaintiff- appellant or
to pay its value in the amount of P
37.25 per cavan, with legal interest
from the filing of the complaint until
fully paid and with costs against the
appellee. 1
Before us, petitioner-defendant takes issue with the
following Appellate Court findings:

Petitioner seeks a review of the Decision of respondent

Appellate Court (in CA-G.R. No. 44345-R) ordering him in
an action for Replevin to return to Aniceto SANDOVAL,
private respondent herein, 170 cavans of rice or to pay

From the evidence presented by the

parties, it is evident that this is a
simple case of swindling perpetuated by

Finally, on principle of equity, it is but

proper
that
plaintiff-appellant
be
allowed to recover the one-hundred and
seventy cavans of rice or its value.
Being the undisputed owner of the
above mentioned goods, the appellant
cannot be deprived of its ownership
without the corresponding payment. 2
We agree with petitioner-defendant that there was a
perfected sale. Article 1475 of the Civil Code lays down
the general rule that there is perfection when there is
consent upon the subject matter and price, even if
neither is delivered.
The contract of sale is perfected at the
moment there is a meeting of minds
upon the thing which is the object of
the contract and upon the price.
xxx xxx xxx
Ownership of the rice, too, was transferred to the
vendee, Chan Lin, upon its delivery to him at San
Fernando, La Union, the place stipulated 3 and pursuant
to Articles 1477 and 1496 of the same Code:

12

1501, or in any manner signifying an

agreement that the possession is
transferred from the vendor to the
vendee.

Page

Chan Lin at the expense of the plaintiff

and the defendant. The act of Chan Lin
in purchasing plaintiff's rice at the price
of P 37.25 per cavan and thereafter
offering the same goods to defendant
at a much lower price is an indication
that it was never his intention to
comply with his obligation to plaintiff. It
is clear that Chan Lin's only purpose in
entering into said contract with plaintiff
was to acquire the physical possession
of the goods and then to pass them on
to defendant on the pretext that he is
the
owner
thereof.
Premises
considered, therefore, Chan Lin cannot
be considered as the owner of the
goods at the time the same was said to
have been sold to the defendantappellee. Considering that defendant
acquired the 170 cavans of rice from a
person who is not the owner thereof, it
is therefore clear that he acquired no
greater right than his predecessor-ininterest.

At the very least, Chan Lin had a rescissible title to the

goods for the non-payment of the purchase price, but
which had not been rescinded at the time of the sale to
petitioner.
However, from petitioner-defendant's
own testimony before the Court of First
Instance, he admits that three days
after the delivery, he was repaid the
sum of P5,600.00 by Chan Lin, who
was then accompanied by SANDOVAL's
driver, and that he had delivered the
rice back to them. On rebuttal,
however, the driver denied that the rice
had ever been returned. 4 The driver's
version is the more credible, for, as
SANDOVAL's counsel had manifested in
open Court, if return of the rice had
been effected, they would have
withdrawn the complaint. 5 Following is
the admission made by petitionerdefendant:
Having been repaid the purchases price by Chan Lin , the
sale, as between them, had been voluntarily rescinded,
and petitioner-defendant was thereby divested of any
claim to the rice. Technically, therefore, he should return
the rice to Chan Lin, but since even the latter, again from
petitioner-defendant's own testimony above-quoted, was
ready to return the rice to SANDOVAL, and the latter's
driver denies that the rice had been returned by
petitioner-defendant cannot be allowed to unjustly enrich
himself at the expense of another by holding on to
property no longer belonging to him. 7 In law and in
equity, therefore, SANDOVAL is entitled to recover the
rice, or the value theref since hewas not paid the price
therefor.
WHEREFORE, albeit on a different premise, the judgment
under review is hereby AFFIRMED. Costs against
petitioner.
SO ORDERED.

Art. 1477. The ownership of the thing

sold shall be transferred to the vendee
upon the actual or constructive delivery
thereof.
Art. 1496. The ownership of the thing
sold is acquired by the vendee from the
moment it is delivered to him in any of
the ways specified in Articles 1497 to

[G.R.
No.
156580. June
14,
2004
LUZ
DU, petitioner, vs. STRONGHOLD INSURANCE CO.,
INC., respondent.

Preference is given to a duly registered attachment

over a subsequent notice of lis pendens, even if the
beneficiary of the notice acquired the subject property
before the registration of the attachment. Under
the torrens system, the auction sale of an attached realty
retroacts to the date the levy was registered.
The Case
Before us is a Petition for Review[1] under Rule 45 of
the Rules of Court, seeking to nullify the March
19, 2002 Decision[2] and
the December
5,
2002 Resolution[3] of the Court of Appeals (CA) in CA-GR
CV No. 50884. The CA disposed as follows:
Parenthetically, when the decision in Civil Case No. 901848 became final and executory, levy on execution
issued and the attached property sold at public auction,
the latter retroacts to the date of the levy.Said the High
Court:
In line with the same principle, it was held that where a
preliminary attachment in favor of A was recorded on
November 11, 1932, and the private sale of the attached
property in favor of B was executed on May 29, 1933, the
attachment lien has priority over the private sale, which
means that the purchaser took the property subject to
such attachment lien and to all of its consequences, one
of which is the subsequent sale on execution (Tambao v.
Suy, 52 Phil. 237). The auction sale being a necessary
sequel to the levy, it enjoys the same preference as the
attachment lien enjoys over the private sale. In other
words, the auction sale retroacts to the date of the
levy. [Were] the rule be otherwise, the preference
enjoyed by the levy of execution would be meaningless
and illusory (Capistrano v. Phil. Nat. Bank, 101 Phil.
1117). (Underscoring supplied)
By and large, We find no reversible error in the appealed
decision.
IN VIEW OF ALL THE FOREGOING, the instant appeal is
ordered DISMISSED. No pronouncement as to cost.[4]
The questioned Resolution, on the other hand,
denied petitioners Motion for Reconsideration.
The Facts
The CA narrated the facts as follows:
x x x Aurora Olarte de Leon was the registered owner of
Lot No. 10-A (LRC Psd 336366) per Transfer Certificate of
Title
No.
582/T-3. Sometime
in
January
1989,
De Leon sold the property to Luz Du under a Conditional

13

PANGANIBAN, J.:

Page

DECISION

Deed of Sale wherein said vendee paid a down payment

of P75,000.00 leaving a balance of P95,000.00.
Then again, on April 28, 1989, Aurora de Leon sold [the]
same property to spouses Enrique and Rosita Caliwag
without prior notice to Luz Du. As a result, Transfer
Certificate of Title No. 582/T-3 was cancelled and Transfer
Certificate of Title No. 2200 was issued in favor of the
Caliwag spouses.
Meanwhile, Stronghold Insurance Corp., Inc. x x x
commenced Civil Case No. 90-1848 against spouses
Rosita and Enrique Caliwag et al., for allegedly
defrauding Stronghold and
misappropriating
the
companys fund by falsifying and simulating purchases of
documentary stamps. The action was accompanied by a
prayer for a writ of preliminary attachment duly
annotated at the back of Transfer Certificate of Title No.
2200 on August 7, 1990.
On her part, on December 21, 1990, Luz Du initiated Civil
Case No. 60319 against Aurora de Leon and the spouses
Caliwag for the annulment of the sale by De Leon in favor
of the Caliwags, anchored on the earlier mentioned Deed
of Conditional Sale.
On January 3, 1991, Luz Du caused the annotation of a
Notice Of Lis Pendens at the back of Transfer Certificate
of Title No. 2200.
On February 11, 1991, the decision was handed down in
Civil Case No. 90-1848 in favor of Stronghold, ordering
the spouses Caliwag jointly and severally to pay the
plaintiff P8,691,681.60, among others.When the decision
became final and executory, on March 12, 1991, a notice
of levy on execution was annotated on Transfer
Certificate of Title No. 2200 and the attached property
was sold in a public auction.On [August] 5, 1991, [5] the
certificate of sale and the final Deed of Sale in favor
of Stronghold were inscribed and annotated leading to
the cancellation of Transfer Certificate of Title No. 2200
and in lieu thereof, Transfer Certificate of Title No. 6444
was issued in the name of Stronghold.
It came to pass that on August 5, 1992, Luz Du too was
able to secure a favorable judgment in Civil Case No.
60319 and which became final and executory sometime
in 1993, as well.
Under the above historical backdrop, Luz Du commenced
the present case (docketed as Civil Case No. 64645) to
cancel Transfer Certificate of Title No. 6444 in the name
of Stronghold with damages claiming priority rights over
the property by virtue of her Notice Of Lis Pendens under
Entry No. 13305 and inscribed on January 3, 1991, and
the final and executory decision in Civil Case No. 60319
she
filed
against spouses
Enrique
and Rosita
Caliwag. According to Luz Du, despite her said notice of
lis pendens annotated, Stronghold still proceeded with
the execution of the decision in Civil Case No. 90-1848
against the subject lot and ultimately the issuance of

The trial court ruled that Stronghold had superior

rights over the property because of the prior registration
of the latters notice of levy on attachment on Transfer
Certificate of Title (TCT) No. 2200. For this reason, it
found no basis to nullify TCT No. 6444, which was issued
in the name of respondent after the latter had purchased
the property in a public auction.
Ruling of the Court of Appeals
Sustaining the trial court in toto, the CA held that
Strongholds notice of levy on attachment had been
registered almost five (5) months before petitioners
notice of lis pendens. Hence, respondent enjoyed priority
in time. Such registration, the appellate court added,
constituted constructive notice to petitioner and all third
persons from the time of Strongholds entry, as provided
under the Land Registration Act -- now the Property
Registration Decree.
The CA also held that respondent was a purchaser
in good faith. The necessary sequels of execution and
sale retroacted to the time when Stronghold registered
its notice of levy on attachment, at a time when there
was nothing on TCT No. 2200 that would show any defect
in the title or any adverse claim over the property.
Hence, this Petition.[7]
Issues
Petitioner submits the following issues for our
consideration:
I.
Whether a Notice of Levy on Attachment
on the property is a superior lien over that
of the unregistered right of a buyer of a
property in possession pursuant to a Deed
of Conditional Sale.
II.
Whether the acquisition of the subject
property by Respondent Stronghold was
tainted with bad faith.[8]
The Courts Ruling

14
Page

Transfer Certificate of Title No. 6444 in its (Strongholds)

name.[6]

Petitioner submits that her unregistered right over

the property by way of a prior conditional sale in 1989
enjoys preference over the lien of Stronghold -- a lien
that was created by the registration of respondents levy
on attachment in 1990. Maintaining that the ruling
in Capistrano v. PNB was improperly applied by the Court
of Appeals, petitioner avers that unlike the circumstances
in that case, the property herein had been sold to
her before the levy. We do not agree.
The preference given to a duly registered levy on
attachment or execution over a prior unregistered sale
is well-settled in our jurisdiction. As early as Gomez v.
Levy Hermanos,[9] this Court has held that an attachment
that is duly annotated on a certificate of title is superior
to the right of a prior but unregistered buyer. In that
case, the Court explained as follows:
x x x. It is true that she bought the lots with pacto de
retro but the fact of her purchase was not noted on the
certificates of title until long after the attachment and its
inscription on the certificates. In the registry, therefore,
the attachment appeared in the nature of a real lien
when Apolonia Gomez had her purchase recorded. The
legal effect of the notation of said lien was to subject and
subordinate the right of Apolonia Gomez, as purchaser, to
the lien. She acquired the ownership of the said parcels
only from the date of the recording of her title in the
register, which took place on November 21, 1932 (sec. 51
of Act No. 496; Liong-Wong-Shih vs. Sunico and
Peterson, 8 Phil. 91; Tabigue vs. Green, 11 Phil. 102;
Buzon vs. Lucauco, 13 Phil. 354; and Worcester vs.
Ocampo and Ocampo, 34 Phil. 646), and the right of
ownership which she inscribed was not an absolute but a
limited right, subject to a prior registered lien, by virtue
of which Levy Hermanos, Inc. was entitled to the
execution of the judgment credit over the lands in
question, a right which is preferred and superior to that
of the plaintiff (sec, 51, Act No. 496 and decisions cited
above). x x x[10]
Indeed, the subsequent sale of the property to the
attaching creditor must, of necessity, retroact to the date
of the levy. Otherwise, the preference created by the levy
would be meaningless and illusory, as reiterated
in Defensor v. Brillo:[11]
x x x. The doctrine is well-settled that a levy on
execution duly registered takes preference over a prior
unregistered sale; and that even if the prior sale is
subsequently registered before the sale in execution but
after the levy was duly made, the validity of the
execution sale should be maintained, because it retroacts
to the date of the levy; otherwise, the preference created
by the levy would be meaningless and illusory.

The Petition has no merit.

Main Issue:
Superiority of Rights

Even assuming, therefore, that the entry of appellants

sales in the books of the Register of Deeds on November
5, 1949 operated to convey the lands to them even
without the corresponding entry in the owners duplicate
titles, the levy on execution on the same lots in Civil
Case No. 1182 on August 3, 1949, and their subsequent

This result is a necessary consequence of the fact that

the properties herein involved were duly registered under
Act No. 496, and of the fundamental principle that
registration is the operative act that conveys and binds
lands covered by Torrens titles (sections 50, 51, Act
496). Hence, if appellants became owners of the
properties in question by virtue of the recording of the
conveyances in their favor, their title arose already
subject to the levy in favor of the appellee, which had
been noted ahead in the records of the Register of Deeds.
[12]
(Citations omitted, italics supplied)
The Court has steadfastly adhered to the governing
principle set forth in Sections 51 and 52 of Presidential
Decree No. 1529:[13]
SEC. 51. Conveyance and other dealings by registered
owner. - An
owner
of
registered
land
may
convey, mortgage, lease, charge or otherwise deal with
the same in accordance with existing laws. He may use
such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument,
except a will purporting to convey or affect registered
land shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties
and as evidence of authority to the Registry of Deeds to
make registration.
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of
Deeds for the province or the city where the land lies.
SEC. 52. Constructive notice upon registration. - Every
conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land
shall, if registered, filed or entered in the office of the
Register of Deeds for the province or city where the land
to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or
entering.(Italics supplied)
As the property in this case was covered by
the torrens system, the registration of Strongholds
attachment[14] was the operative act that gave validity to
the transfer and created a lien upon the land in favor of
respondent.[15]

15
Page

sale to appellee Brillo (which retroacts to the date of the

levy) still takes precedence over and must be preferred
to appellants deeds of sale which were registered only on
November 5, 1949.

prior sale.[16] That was the import of Capistrano v. PNB,

[17]
which held that precedence should be given to a levy
on attachment or execution, whose registration
was before that of the prior sale.
In Capistrano, the sale of the land in question -though made as far back as 1946 -- was registered only
in 1953, after the property had already been subjected to
a levy on execution by the Philippine National Bank. The
present case is not much different. The stipulation of
facts shows that Stronghold had already registered its
levy on attachment before petitioner annotated her
notice of lis pendens. As in Capistrano, she invokes the
alleged superior right of a prior unregistered buyer to
overcome respondents lien.
If either the third-party claim or the subsequent
registration of the prior sale was insufficient to defeat the
previously registered attachment lien, as ruled by the
Court in Capistrano, it follows that a notice of lis
pendens is
likewise
insufficient
for
the
same
purpose. Such notice does not establish a lien or an
encumbrance on the property affected. [18] As the name
suggests, a notice of lis pendens with respect to a
disputed property is intended merely to inform third
persons that any of their transactions in connection
therewith -- if entered into subsequent to the notation -would be subject to the result of the suit.
In view of the foregoing,
applied Capistrano, as follows:

the

CA

correctly

x x x the rule now followed is that if the attachment or

levy of execution, though posterior to the sale, is
registered before the sale is registered, it takes
precedence over the latter.
The rule is not altered by the fact that at the time of the
execution sale the Philippine National Bank had
information that the land levied upon had already been
deeded by the judgment debtor and his wife to
Capistrano. The auction sale being a necessary sequel to
the levy, for this was effected precisely to carry out the
sale, the purchase made by the bank at said auction
should enjoy the same legal priority that the levy had
over the sale in favor of plaintiff. In other words, the
auction sale retroacts to the date of the levy. Were the
rule otherwise, the preference enjoyed by the levy of
execution in a case like the present would be
meaningless and illusory.[19] (Citations omitted, italics
supplied)
Second Issue:
Taking in Bad Faith

Capistrano Ruling
Correctly Applied
The preference created by the levy on attachment is
not diminished even by the subsequent registration of the

We now tackle the next question of petitioner:

whether Stronghold was a purchaser in good
faith. Suffice it to say that when Stronghold registered its
notice of attachment, it did not know that the land being
attached had been sold to petitioner. It had no such

Thus, the annotation of respondents notice of

attachment was a registration in good faith, the kind that
made its prior right enforceable.[21]
Moreover, it is only after the notice of lis pendens is
inscribed in the Office of the Register of Deeds that
purchasers of the property become bound by the
judgment in the case. As Stronghold is deemed to have
acquired the property -- not at the time of actual
purchase but at the time of the attachment -- it was an
innocent purchaser for value and in good faith.
WHEREFORE,
assailed
Decision
against petitioner.

the Petition is DENIED, and the

and
Resolution AFFIRMED. Costs

SO ORDERED.

16
Page

knowledge precisely because the sale, unlike the

attachment, had not been registered. It is settled that a
person dealing with registered property may rely on the
title and be charged with notice of only such burdens and
claims as are annotated thereon. [20] This principle applies
with more force to this case, absent any allegation or
proof that Stronghold had actual knowledge of the sale to
petitioner before the registration of its attachment.

On 05 December 1995, Bernardo Valdevieso

(petitioner) bought from spouses Lorenzo and Elenita Uy
a parcel of land consisting of 10,000 square meters,
more or less, located at Bo. Tambler, General Santos City,
and covered by Transfer Certificate of Title (TCT) No. T30586.[2]
The deed of sale was not registered, nor was the
title of the land transferred to petitioner.[3]
On 07 December 1995, the said property was
immediately declared by petitioner for taxation purposes
as Tax Declaration No. l6205 with the City Assessors
Office.[4]
It came to pass that on 19 April 1996, spouses
Candelario and Aurea Damalerio (respondents) filed with
the Regional Trial Court (RTC) of General Santos City, a
complaint for a sum of money against spouses Lorenzo
and Elenita Uy docketed as Civil Case No. 5748 with
application for the issuance of a Writ of Preliminary
Attachment.[5]
On 23 April 1996, the trial court issued a Writ of
Preliminary Attachment by virtue of which the property,
then still in the name of Lorenzo Uy but which had
already been sold to petitioner, was levied. The levy was
duly recorded in the Register of Deeds of General Santos
City and annotated upon TCT No. T-30586.[6]
On 06 June 1996, TCT No. T-30586 in the name of
Lorenzo Uy was cancelled and, in lieu thereof, TCT No. T74439 was issued in the name of petitioner.[7] This new
TCT carried with it the attachment in favor of
respondents.

[G.R. No. 133303. February 17, 2005]

BERNARDO
VALDEVIESO, petitioner, vs.
CANDELARIO DAMALERIO AND AUREA C.
DAMALERIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review under Rule
45 of the Rules of Court, seeking to set aside the 25
September 1997 Decision and the 10 February 1998
Resolution of the Court of Appeals in CA-G.R. SP No.
43082
entitled, Candelario
Damalerio
and
Aurea
Damalerio v. Honorable Antonio S. Alano, et al.[1]
There is no dispute as to the following facts:

On 14 August 1996, petitioner filed a third-party

claim in Civil Case No. 5748 to discharge or annul the
attachment levied on the property covered by TCT No. T74439 on the ground that the said property belongs to
him and no longer to Lorenzo and Elenita Uy.[8]
In a resolution dated 21 October 1996, the trial
court ruled for the petitioner.[9] Citing Manliguez v. Court
of Appeals[10] and Santos v. Bayhon,[11] it held that the
levy of the property by virtue of attachment is lawful only
when the levied property indubitably belongs to the
defendant. Applying the rulings in the cited cases, it
opined that although defendant Lorenzo Uy remained the
registered owner of the property attached, yet the fact
was that he was no longer the owner thereof as it was
already sold earlier to petitioner, hence, the writ of
attachment was unlawful.
Respondents sought reconsideration thereof which
was denied by the trial court in a resolution dated 03
January 1997.[12]
From the unfavorable resolution of the trial court in
the third-party claim, respondents appealed to the Court
of Appeals. The appellate court reversed the resolution

Petitioner moved for reconsideration but this was

denied by the Court of Appeals in its Resolution of 10
February 1998.[14]

17
Page

and by judgment promulgated on 25 September 1997, it

declared that an attachment or levy of execution, though
posterior to the sale, but if registered before the sale is
registered, takes precedence over the sale. [13] The writ of
attachment in favor of the respondents, being recorded
ahead of the sale to petitioner, will therefore take
precedence.

Deeds. Furthermore, respondents argue that petitioner

cannot invoke equity in his favor unless the following
conditions are met: (a) the absence of specific provision
of a law on the matter; and (b) if the person who invokes
it is not guilty of delay. Both conditions have not been
met, however, since there is a law on the subject
matter, i.e., Section 51 of Presidential Decree No. 1529,
and that petitioner allegedly slept on his rights by not
immediately registering an adverse claim based on his
deed of sale.
We agree with the respondents.

Hence, this Petition for Review on Certiorari.

The sole issue in this case is whether or not a
registered writ of attachment on the land is a superior
lien over that of an earlier unregistered deed of sale.
Petitioner maintains that he has a superior right
over the questioned property because when the same
was attached on 23 April 1996, this property was no
longer owned by spouses Uy against whom attachment
was issued as it was already sold to petitioner on 05
December 1995. The ownership thereof was already
transferred to petitioner pursuant to Article 1477 [15] in
relation to Article 1498[16] of the Civil Code.
Dismissing the allegation that he slept on his rights
by not immediately registering at least an adverse claim
based on his deed of sale, petitioner avers that he
promptly worked out for the transfer of registration in his
name. The slight delay in the registration, he claims was
not due to his fault but attributable to the process
involved in the registration of property such as the
issuance of the Department of Agrarian Reform clearance
which was effected only after compliance with several
requirements.
Considering the peculiar facts and circumstances
obtaining in this case, petitioner submits it would be in
accord with justice and equity to declare him as having a
superior right to the disputed property than the
respondents.
Respondents maintain the contrary view. They aver
that registration of a deed of sale is the operative act
which binds the land and creates a lien thereon. Before
the registration of the deed, the property is not bound
insofar as third persons are concerned. Since the writ of
attachment in favor of respondents was registered earlier
than the deed of sale to petitioner, respondents were of
the belief that their registered writ of attachment on the
subject property enjoys preference and priority over
petitioners earlier unregistered deed of sale over the
same property. They also contend that Articles 1477 and
1498 of the Civil Code as cited by petitioner are not
applicable to the case because said provisions apply only
as between the parties to the deed of sale. These
provisions do not apply to, nor bind, third parties, like
respondents, because what affects or binds third parties
is the registration of the instrument in the Register of

The law applicable to the facts of this case is

Section 51 of P.D. No. 1529. Said Section provides:
Sec. 51. Conveyance and other dealings by registered
owner. - An owner of registered land may convey,
mortgage, lease, charge, or otherwise deal with the same
in accordance with existing laws. He may use such forms
of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed,
mortgage, lease, or other voluntary instrument, except a
will purporting to convey or affect registered land, shall
take effect as a conveyance or bind the land, but shall
operate only as a contract between the parties and as
evidence of authority to the Register of Deeds to make
registration.
The act of registration shall be the operative act to
convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of
Deeds for the province or city where the land lies.
It is to be noted that though the subject land was
deeded to petitioner as early as 05 December 1995, it
was not until 06 June 1996 that the conveyance was
registered, and, during that interregnum, the land was
subjected to a levy on attachment. It should also be
observed that, at the time of the attachment of the
property on 23 April 1996, the spouses Uy were still the
registered owners of said property. Under the cited law,
the execution of the deed of sale in favor of petitioner
was not enough as a succeeding step had to be taken,
which was the registration of the sale from the spouses
Uy to him. Insofar as third persons are concerned, what
validly transfers or conveys a persons interest in real
property is the registration of the deed. Thus, when
petitioner bought the property on 05 December 1995, it
was, at that point, no more than a private transaction
between him and the spouses Uy. It needed to be
registered before it could bind third parties, including
respondents. When the registration finally took place on
06 June 1996, it was already too late because, by then,
the levy in favor of respondents, pursuant to the
preliminary attachment ordered by the General Santos
City RTC, had already been annotated on the title.
The settled rule is that levy on attachment, duly
registered, takes preference over a prior unregistered

18
Page

sale.[17] This result is a necessary consequence of the fact

that the property involved was duly covered by the
Torrens system which works under the fundamental
principle that registration is the operative act which gives
validity to the transfer or creates a lien upon the land.[18]

WHEREFORE, the appealed Decision of the Court

of Appeals in CA-G.R. SP No. 43082 dated 25 September
1997, and its Resolution dated 10 February 1998, are
hereby AFFIRMED. No costs.
SO ORDERED.

The preference created by the levy on attachment is

not diminished even by the subsequent registration of the
prior sale. This is so because an attachment is a
proceeding in rem.[19] It is against the particular property,
enforceable against the whole world. The attaching
creditor acquires a specific lien on the attached property
which nothing can subsequently destroy except the very
dissolution of the attachment or levy itself.[20] Such a
proceeding, in effect, means that the property attached is
an indebted thing and a virtual condemnation of it to pay
the owners debt.[21] The lien continues until the debt is
paid, or sale is had under execution issued on the
judgment, or until the judgment is satisfied, or the
attachment discharged or vacated in some manner
provided by law.
Thus, in the registry, the attachment in favor of
respondents appeared in the nature of a real lien when
petitioner had his purchase recorded. The effect of the
notation of said lien was to subject and subordinate the
right of petitioner, as purchaser, to the lien. Petitioner
acquired ownership of the land only from the date of the
recording of his title in the register, and the right of
ownership which he inscribed was not absolute but a
limited right, subject to a prior registered lien of
respondents, a right which is preferred and superior to
that of petitioner.[22]
Anent petitioners reliance on the rulings laid down
in Manliguez v. Court of Appeals and Santos v. Bayhon,
we find the same to be misplaced. These cases did not
deal at all with the dilemma at hand, i.e. the question of
whether or not a registered writ of attachment on land is
superior to that of an earlier unregistered deed of sale.
In Santos, what was involved were machinery and pieces
of equipment which were executed upon pursuant to the
favorable ruling of the National Labor Relations
Commission. A third party claimed that the machinery
were already sold to her, but it does not appear in the
facts
of
the
case
if
such
sale
was
ever
registered. Manliguez is similar to Santos, except that the
former involved buildings and improvements on a piece
of land. To stress, in both cited cases, the registration of
the sale, if any, of the subject properties was never in
issue.
As to petitioners invocation of equity, we cannot, at
this instance, yield to such principle in the presence of a
law clearly applicable to the case. We reiterate that this
Court, while aware of its equity jurisdiction, is first and
foremost, a court of law.[23] While equity might tilt on the
side of one party, the same cannot be enforced so as to
overrule positive provisions of law in favor of the other.
[24]
Equity cannot supplant or contravene the law.[25] The
rule must stand no matter how harsh it may seem. Dura
lex sed lex.

G.R. No. L-5534 December 23, 1909

HERBERT S. WALKER and W. J. ROHDE,PlaintiffsAppellees, v.JOSE McMICKING,Defendant-Appellant.
O'Brien
and
De
Witt
Roman Lacson for appellees.

for

appellant.

JOHNSON, J.:
On the 5th day of February, 1909, the plaintiff
commenced an action in the Court of First Instance of the
city of Manila to recover the possession of certain
personal property mentioned in paragraph 1 of the
complaint, or in default thereof the sum of P1,500, its
value, and costs. The defendant filed a general
denial.chanroblesvirtualawlibrary chanrobles virtual law
library
After hearing the evidence adduced during the trial of the
cause, the lower court rendered a judgment adjudging to
Herbert S. Walker, the right to recover the articles
mentioned in paragraph 1 of the complaint, of the
defendant, or in default, the sum of P539, with interest at
the rate of 5 per cent per annum, from February 6,
1909.chanroblesvirtualawlibrary chanrobles virtual law
library
From this judgment the defendant appealed and made
the following assignments of error:

2.

The court erred in holding that the sale of June

16, 1908, was rescinded in a way affecting this
defendant.chanroblesvirtualawlibrary chanrobles
virtual law library

3.

The court erred in holding that the rescission

does not involve a precedent condition to return
the amounts paid on account of the purchase
price.chanroblesvirtualawlibrary chanrobles
virtual law library

4.

The court erred in making an

valuation of the goods in question.

excessive

Under the first above assignment of error, the appellant

contends that the lower court committed an error in
holding the attachment of the 17th of December, 1908,
was null and void. The appellant relies upon Exhibit 1
(the writ of attachment) for the purpose of showing that
said attachment was valid. Exhibit 1 was not made a part
of the record in this court. We can not, therefore,
examine it for the purpose of ascertaining just what its
contents were. The lower court, in discussing the validity
of said attachment and its effect upon the present action,
said:
The defendant is not sued in any official capacity, nor
does he, in answer, or elsewhere, claim any such status.
In fact his answer is only a general denial. He offers in
evidence, however, a writ of attachment (Exhibit 1)
issued by one of the judges of this court on December
16, 1908, on the back of which appears an indorsement
to the effect that the sheriff of Manila delivered a copy of
the writ and affidavit upon the which the same was
founded, to Arenas & Co. and that said sheriff attached
certain articles therein mentioned, some of which appear
to be similar to those in controversy, though the identity
does not seem to be clearly established. The indorsement
further recites that "the goods are found deposited . . . in
the possession of the same defendants according to a
stipulation signed by both parties which is attached to
this writ." The attached stipulation recites that all the
goods attached "shall remain in the possession of the
same defendants, relieving the sheriff of all responsibility
as regards the care and custody thereof." Plaintiff Rohde
further testifies (p. 13) that he never heard of the
attachment until about the 29th of January, that he
continued in possession from the time Arenas surrender
to him and that the latter was permitted to enter only for
the
purpose
of
preparing
the
articles
for
sale.chanroblesvirtualawlibrary chanrobles virtual law
library
Section 428 of the Code of Civil Procedure requires: "The
order of attachment shall be served by the officer of the

19

The court erred in holding that the attachment

of December 17, 1908, was null as to this
defendant.chanroblesvirtualawlibrary chanrobles
virtual law library

Page

1.

court by attaching, and safely keeping all the movable

property of the defendant." chanrobles virtual law library
It will be seem from the recitals above quoted that the
sheriff never claims to have taken into his "keeping" the
articles in controversy, but, on the contrary, left them
with the attachment defendants, expressly relieving
himself of all responsibility. This is clearly not a
compliance with the statute and did not effect a valid
attachment. A mere verbal declaration of seizure or
service of writ is insufficient. (Hollister vs. Goodale, 21
Am. Dec., 674; Jones vs. Howard, 59 Am. St. Rep., 231;
Miles vs. Brown, 38 N. Y. Supr. Ct., 400.) There must be
actual assumption of control (4 Cyc., 484, 485.) This is
not saying that a defendant may not be custodian; but
the possession and responsibility must be the sheriff's
and not the defendant's. If as stated in defendant's brief,
such an arrangement is an everyday occurrence in
attachment levies, here the vice of it can too soon be
declared.
The facts presented by a preponderance of the evidence
seem to be as follows: chanrobles virtual law library
The plaintiff, Walker, was the owner of a Filipino carriage
factory. The building in which the factory was operated
and its contents were, on the 30th of June, 1908, sold to
a partnership known as "Arenas & Co.," by plaintiff,
Walker, whose ownership, at the time of the sale, was not
disputed by any of the parties to this action. The contract
was evidenced by a writing (Exhibit A), from which it
appears that the said company was to pay for the said
factory and its contents the sum of P3,200, P600 of
which was paid at the time of the sale (June 30, 1908)
and the balance was to be paid in three installments,
due, respectively, P600 on the 15th of July, 1908, P1,000
due on the 15th of September, 1908, and P1,000 due on
the 31st of December, 1908. The said company paid the
installment due on the 15th of July, 1908, but failed to
pay said installments due in September and December.
Paragraph 4 of said contract (Exhibit A) contains the
following provision:
That, should the said firm of Arenas & Co. not pay me the
amounts agreed to on the dates stated in the previous
paragraph or within the thirty days following any of said
terms, the present sale shall be rescinded, and I, Herbert
S. Walker, shall be entitled to take possession of the
building as well as of the business and all the goods
constituting the same.
The said company having failed to pay the second and
third installments due respectively in September and
December, as above indicated, the plaintiff Walker, early
in the month of January, 1909, by virtue of the said
provision of the contract, rescinded said sale and took
possession of said factory with its contents. The factory
was located upon land belonging to the plaintiff Rohde.
The said company had failed for some months to pay the
rent for the land. The plaintiff Rohde claimed that by
virtue of the provisions of paragraph 7 of article 1922 of
the Civil Code that he had a preferred claim against the

It appears, however, that on or about the 16th of

December, 1908, the defendant, acting as sheriff of the
city of Manila, levied an attachment upon the said factory
and its contents, by virtue of a judgment theretofore
rendered against the said Arenas & Co. The record does
not disclose fully just what was done in effecting said
attachment. It appears, however, by an indorsement
upon said alleged writ of attachment, or perhaps by a
stipulation between the parties (to the attachment), that
the goods attached "shall remain in the possession of the
same defendants, relieving the sheriff of all responsibility
as regards the care and custody thereof." chanrobles
virtual law library
The plaintiff Rohde testified that he had never heard of
said attachment until about the 29th of January, 1909;
that he continued in possession from the time (about
January 1) that Arenas & Co. surrendered possession to
him, and that Arenas & Co. was only permitted to enter
the premises thereafter for the purpose of preparing the
contents
of
said
factory
for
sale.chanroblesvirtualawlibrary chanrobles virtual law
library
The evident theory of the defendant and appellant is that
the attachment had the effect of defeating the right of
the plaintiffs in said factory and its contents. It appears
in the record, that in some way the defendant obtained
possession of the articles mentioned in paragraph 1 of
the complaint, and that some time early in the month of
February, 1909, they were sold for the sum of P191, and
a few cents. It is not suggested in the record that the
defendant, McMicking, is sued as sheriff. The defendant
does not pretend that what he did was done as sheriff.
The plaintiff does not attempt to recover of the defendant
as sheriff. The pretension of the plaintiff is that the
defendant, Jose McMicking, took possession of certain
personal property, and retains the possession of the
same, which belongs to them. Even admitting that the
defendant did, by virtue of an attachment, as sheriff,
pretend to take possession of the property in question,
the plaintiffs contend that the attachment was void for
the reason that the defendant, as sheriff, did not comply
with
the
law
in
levying
the
said
attachment.chanroblesvirtualawlibrary chanrobles virtual
law library
The lower court, basing his conclusions upon the
provisions of section 428 of the Code of Procedure in Civil

20
Page

said factory and its contents for the payment of the rent.
The plaintiff Rohde, acting for himself and for the plaintiff
Walker, took possession of said factory and its contents,
on or about the first of January, 1909. Mr. Rohde testified
that at the time he took possession of said factory,
representing himself and the said Walker, there was no
one in possession of said property except the said Arenas
& Co., and that Arenas & Co. turned said property over to
himwithout any objection whatever, in fact, that the
delivery
was
made
by
mutual
consent
and
agreement.chanroblesvirtualawlibrary chanrobles virtual
law library

Actions, held that the attachment was null for the reason
that the defendant did not comply with said section.
Section 428 provides that The order of attachment shall be served by the officer of
the court by attaching and safely keeping all the movable
property of the defendant in the Philippine Islands, or so
much thereof as may be sufficient to satisfy the plaintiff's
demands, unless the defendants gives security by
obligation to the plaintiff, with sufficient surety, to be
approved by the judge who granted the order of
attachment, in an amount sufficient to satisfy such
demands besides costs, . . . . The property so attached
shall be held to await final judgment in execution, unless
released as provided in this section or section four
hundred and forty.
It will be noted, even admitting that the defendant is
here sued as sheriff, and that his responsibility in this
action is as sheriff, that he did not comply with said
section 428, in making said attachment. He did not
attach and safely keep the movable property attached. A
verbal declaration of seizure of service of a writ of
attachment is not sufficient. There must be an actual
taking of possession and placing the attached property
under the control of the officer or someone representing
him. (Hollister vs. Goodale, 8 Conn., 332, 21 Am. Dec.,
674; Jones vs. Howard, 99 Ga., 451, 59 Am. St. Rep.,
231.) chanrobles virtual law library
We believe that under said section 428 to constitute a
valid levy of an attachment, the officer levying it must
take actual possession of the property attached as far as
under the circumstances is practicable. He must put
himself in position to, and must assert and, in fact,
enforce a dominion over the property adverse to and
exclusive of the attachment debtor, and such property
must be in substantial presence and possession.
(Corniff vs.Cook, 95 Ga., 61, 51 Am. St. Rep., 55, 61.) Of
course, this does not mean that the attaching officer may
not, under an arrangement satisfactory to himself, put
anyone in possession of the property for the purpose of
guarding it, but he can not in this way relieve himself
from liability to the parties interested in said
attachment.chanroblesvirtualawlibrary chanrobles virtual
law library
We are of the opinion, and so hold, that the attachment
was not properly made in accordance with the provisions
of the Code of the Procedure in Civil Actions. There is no
pretension, however, in record, on the part of the
defendant, that he attached said property and held the
same by virtue of such attachment. Even thought this
defense had been made by the defendant, which is only
made by his attorney, it would be an admission of the
principal facts alleged by the plaintiffs in their complaint to wit, that he had taken possession of personal property
belonging to them. The defense made by the defendant is
new matter to which no reference whatever was made in
the pleadings, and it is, therefore, upon the whole,
inadmissible. Facts not alleged in the pleadings but
offered as evidence, which admit the facts alleged, but

Under the second assignment of error the appellant

contends that the original sale of said factory and its
contents had not been rescinded by the plaintiffs herein
in a manner which in any way affected the defendant.
The fourth clause of the contract of sale (Exhibit A)
quoted above, gave the vendor of said factory and
contents the right to rescind the sale for a failure to pay
any of the subsequent installments. The plaintiffs testified
during the trial that the second installment had not been
paid, in accordance with the terms of the contract and
that he, therefore, rescinded the contract of sale, to
which rescission, the said company (the purchaser)
acceded and delivered to the plaintiff Walker the said
carriage factory and its contents. No allegation is made
by the defendant that either the contract or the rescission
of the contract was corruptly made, or for the purpose of
defrauding any of the creditors. Exhibit A was the
contract between the said company and the plaintiff
Walker. It constituted that law covering the rights of the
respective parties to it. (Arts. 1254 and 1255, Civil
Code.) The plaintiff Walker did all that was necessary for
him
to
do
to
rescind
said
contract.chanroblesvirtualawlibrary chanrobles virtual law
library
Under the third assignment of error, the appellant insists
that the contract could not be rescinded by Walker
without returning to Arenas & Co. the amount of money
which Arenas & Co. had paid on said contract, and cities
several provisions of the Civil Code in support of his
contention, especially article 1295. Arenas & Co. are not
parties to this action. Arenas & Co. have made no claim
for the return of the money which they paid on said
contract. If they have a right to a return of the money
which they paid on said contract upon a rescission by
Walker, a question which we do not now decide, they are
the only ones which can insist upon it. No such claim is
here made. It is not a right which the defendant in this
action can insist upon. This question is not involved in the
present action for the reason that Arenas & Co. make no
such
claim.
They
are
not
parties
to
this
action.chanroblesvirtualawlibrary chanrobles virtual law
library
Under the fourth assignment of error, the defendant
insists or contends that the value allowed by the lower
court for the property in question was excessive. Upon an

21
Page

tend to confess and avoid the facts alleged are not

admissible in evidence. (Bliss on Code Pleadings, 3d ed.,
427, and cases cited.) For example: A sues B on a
promissory note, setting up the necessary facts in his
petition. B answered by a general denial. B's real defense
is prescription. B will not be permitted to prove
prescription for the reasons that (a) he denied the
existence of the debt, and (b) by his evidence tending to
show that the said debt is prescribed, he thereby admits
the existence of the debt, which is a confession of his
liability. In other words, the defense of prescriptions is a
confession
and
an
avoidance
of
the
obligation.chanroblesvirtualawlibrary chanrobles
virtual
law library

examination of the evidence brought to this court,

relating to the value of the property in question, we are
of the opinion, and so hold, that the lower court
committed no error in fixing the value of said property at
the sum of P539. The price obtained for property under a
forced sale is not a fair criterion for the purpose of
ascertaining
the
true
value
of
such
property.chanroblesvirtualawlibrary chanrobles virtual law
library
We have discussed at length assignments of error made
by the appellant, but in our opinion the whole case may
be stated briefly as follows: chanrobles virtual law library
First. The defendant attached certain property under a
writ of execution issued by one of the courts of the city of
Manila, which attachment, however, was levied upon the
property in question. This attachment, however, was
rendered invalid and of no effect for the reason that the
defendant did not maintain his control over the same,
either personally or by his representatives. The
attachment became invalid the moment the sheriff lost
either his actual or constructive control over the
property.chanroblesvirtualawlibrary chanrobles virtual law
library
Second. The plaintiffs herein, innocently and in good faith
and under a right, acquired possession of the property in
question.chanroblesvirtualawlibrary chanrobles virtual law
library
Third. That subsequent to the acquisition of the
possession by the plaintiffs, the defendant, in some way
which does not appear of record, acquired possession of
the property in question, and admits that he
subsequently
sold
it.chanroblesvirtualawlibrary chanrobles virtual law library
Fourth. The plaintiffs allege that the defendant is in
possession of property belonging to them, and prays that
the same may be returned or its value. The defendant
denies (general denial) that he has the possession of the
property. The evidence clearly shows that the defendant
did take possession of property which was rightfully in
possession of the plaintiffs. He is therefore liable, either
to
return
said
property
or
its
value.chanroblesvirtualawlibrary chanrobles virtual law
library
For all of the foregoing reasons, we are of the opinion
and so hold that the judgment of the lower court should
be affirmed, with costs. So ordered.

22
Page
NATIONAL BUREAU OF INVESTIGATION and
SANTIAGO
N.
SALVADOR, complainants, vs.
RODOLFO G. TULIAO, Sheriff IV of the RTC of
Cauayan, Isabela, Branch 20, respondent.
DECISION
PANGANIBAN, J.:
Sheriffs play an important role in the administration
of justice. They form an integral part thereof because
they are called upon to serve court writs, execute all
processes, and carry into effect the orders of the court
with due care and utmost diligence. [1] As agents of the
law, high standards are expected of them. In the present
case, respondent sheriff failed to live up to these
standards.
A complaint against Respondent Deputy Provincial
Sheriff Rodolfo G. Tuliao of the Regional Trial Court of
Cauayan, Isabela , Branch 20 was filed by Santiago N.
Salvador before the Tuguegarao Sub-Office (TUGSO) of
the National Bureau of Investigation (NBI). [2] An
investigation was conducted by Agent-in-Charge Franklin
Javier and Agent Raul A. Ancheta. On November 24,
1994, complainant gave his statement [3] to Agent Paul
Gino Rivera. Invoking his right to remain silent,
respondent sheriff refused to submit himself to custodial
investigation before Agent Javier. Instead, he submitted a
Compliance[4] dated July 22, 1995 and an Answer [5] dated
August 4, 1995.
After the investigation, Agents Javier and Ancheta
recommended, inter alia, the filing of an administrative
case with the Office of the Court Administrator.[6] Atty.
Gerarda G. Galang, Chief of the NBI Legal and Evaluation
Division, concurred with said recommendation. [7] On
November 13, 1995, Director Mariano M. Mison of the
NBI transmitted to this Court a copy of the evaluation
with the recommendation that appropriate action be
taken against respondent.[8]
Hence, this administrative complaint now before us.
The Facts
Complainant Salvador bought a passenger jeep
from Lito G. Ignacio to be paid in monthly installments
of P7,000.00 with a down payment of P50,000.00. After
remitting the down payment, complainant diligently paid
all monthly amortizations until March 1994 when, in the
absence of Ignacio, the complainant was forced to pay to

an unnamed brother of the seller the amounts due for

the months of April and May 1994. However, the brother
failed to remit said amount to the seller; thus, the latter
filed with the Regional Trial Court of Cauayan, Isabela,
Branch 20[9] a suit for collection, docketed as Civil Case
No. 20-757, entitled Pisces Motor Works, Represented by
Lito D. Ignacio vs. Santiago Salvador.
Subsequently, an order was issued by the RTC
directing respondent sheriff to attach the passenger
jeep. Complainant, through counsel, filed a motion to
discharge attachment upon filing of a counterbond for the
release of the vehicle in his favor. Due to some defects in
the aforementioned motion, a second motion with
counterbond was filed. On July 13, 1994, the trial court
issued an order, the decretal portion of which reads, to
wit:[10]
WHEREFORE, and in view of the foregoing, the
counterbond of the defendant, is hereby approved. The
Sheriff is hereby ordered to release to the defendant the
attached vehicle bearing Motor No. 6D-57-51813 with
Plate No. UV BBR-127.
Respondent refused to comply with the said
order. Instead, he released the passenger jeep to Ignacio
after the latter had executed a receipt therefor together
with an undertaking that he would produce the jeep
whenever required by the court. Respondent justified
such release by saying that the court had no storage
building that would protect the jeep from damage or loss.
[11]

Despite
the
pendency
of
a
motion
for
contempt[12] filed by complainant against respondent, the
case was dismissed[13] on August 31, 1994 because
jurisdiction over the case had been transferred to the
municipal trial court as mandated by Republic Act No.
7691 which expanded said courts jurisdiction.
After receipt of respondents Comment dated April
20, 1996, the Court referred the case to the Office of the
Court
Administrator
for
evaluation,
report
and
recommendation. In a memorandum to the Chief Justice
dated August 29, 1996, Acting Court Administrator
Reynaldo L. Suarez recommended a finding of guilt and
suspension of respondent for six (6) months without pay.
[14]

Issue
The main issue in this case is whether respondent
sheriff is administratively liable for failing to release the
property under custodia legis to the complainant in
accordance with the order of the regional trial court.
Respondent sheriff contends that his act of not
taking into his official custody the attached property was
not unlawful but was in fact reasonable because the court
had no facility for its storage. That it could no longer be
returned to complainants possession in accordance with

The Courts Ruling

Respondents contentions are without merit. We
agree with the Court Administrator that respondent
should be held administratively liable.
First Issue: Manner of Attachment
This Court finds respondent sheriffs manner of
attachment irregular and his reason therefor totally
unacceptable.
Rule 57 of the Rules of Court provides:
Sec. 5. Manner of attaching property.-- The officer
executing the order shall without delay attach, to await
judgment and execution in the action, all the properties
of the party against whom the order is issued in the
province, x x x.

23
Page

the courts order was not his fault but that of the
attaching creditor who had violated his obligation to
produce the same whenever required by the court. He
offers to pay a fine in the discretion of the Honorable
Court as he has not benefited any pecuniary interest
(sic).[15]

674; Jones vs. Howard, 99 Ga., 451, 59 Am. St. Rep.,

231.)
We believe that x x x to constitute a valid levy of an
attachment, the officer levying it must take actual
possession of the property attached as far as x x x
practicable (under the circumstances). He must put
himself in (a) position to, and must assert and, in fact,
enforce a dominion over the property adverse to and
exclusive of the attachment debtor, and such property
must be in his substantial presence and possession.
(Corniff vs. Cook, 95 Ga., 61, 51 Am. St. Rep., 55,
61.) Of course, this does not mean that the attaching
officer may not, under an arrangement satisfactory to
himself, put anyone in possession of the property for the
purpose of guarding it, but he can not in this way relieve
himself from liability to the parties interested in said
attachment.
That Ignacio was able to move the passenger jeep
to an unknown location is further proof that respondent
sheriff had not taken and safely kept it in his substantial
presence, possession and control.
His claim that the regional trial court did not have
any storage facility to house said property is no
justification. He could have deposited it in a bonded
warehouse.[17]

xxx xxx xxx

Sec. 7. Attachment of real and personal property;
recording thereof.--Properties shall be attached by the
officer executing the order in the following manner:
xxx xxx xxx
(c) Personal property capable of manual delivery, by
taking and safely keeping it in his capacity, after issuing
the corresponding receipt therefor;
xxx xxx xxx
Clearly, respondents act of leaving the passenger
jeep in the possession and control of the creditor did not
satisfy the foregoing requirements of the Rules; neither
did it conform to the plainly worded RTC order. The note
in the receipt that imposed on Ignacio the obligation to
produce the same whenever required by the court was no
compliance either, because it did not establish that the
property was in respondent sheriffs substantial presence
and possession. Respondent fell short of his obligation to
take and safely keep the attached property in his
capacity. He cannot feign ignorance of this duty as he
himself correctly cited an early decision of this Court
explaining a sheriffs duty in attachment, as follows: [16]
x x x A verbal declaration of seizure or service of a writ of
attachment is not sufficient. There must be an actual
taking of possession and placing of the attached property
under the control of the officer or someone representing
him. (Hollister vs. Goodale, 8 Conn., 332, 21 Am. Dec.,

Contrary
to
respondent
sheriffs
contention,
compelling the attaching creditor to release the property
in question was not in order, because the proper remedy
provided by the Rules of Court was for the party whose
property had been attached to apply for the discharge of
the attachment by filing a counterbond. [18] The effect of
this remedy is the delivery of possession of the attached
property to the party giving the counterbond. The
attaching creditor was not authorized to have possession
of the attached property, contrary to the insistence of
respondent sheriff.
Second Issue: Liability of a Sheriff
A court employee should keep in mind that he is an
integral part of that organ of the government that is
involved in the sacred task of administering justice. His
conduct and behavior should perforce be circumscribed
with the heavy burden of responsibility and must at all
times be characterized by propriety and decorum.[19]
Section 4(c) of Republic Act No. 6713 requires of
every public official and employee justness and sincerity
in the discharge and execution of official duties. It exacts
from him at all times respect for the rights of others and
proscribes him from dispensing or extending undue
favors on account of his office.
The Court in Chan vs. Castillo held:[20]
Every officer or employee in the judiciary is duty
bound to obey the orders and processes of the court

Leaving the attached property in the possession of

the attaching creditor makes a farce of the
attachment. This is not compliance with the issuing
courts order. When a writ is placed in the hands of a
sheriff, it is his duty, in the absence of any instructions to
the contrary, to proceed with reasonable celerity and
promptness to execute it according to its mandate.[21] He
is supposed to execute the order of the court strictly to
the letter.[22] If he fails to comply, he is liable to the
person in whose favor the process or writ runs.[23]
Respondents pretense of having acted in utmost
good faith for the preservation of the attached property is
hardly credible because there was no reason for his
having acted thus. In sum, he is unable to satisfactorily
explain why he failed to take such movable in his control.
By acceding to the request of Ignacio, respondent
sheriff actually extended an undue favor which prejudiced
the complainant as well as the orderly administration of
justice. He exceeded his powers which were limited to
the faithful execution of the courts orders and service of
its processes.[24] His prerogatives did not give him any
discretion to determine who among the parties was
entitled to possession of the attached property.
That he exerted efforts in going to the creditors
residence in Tuguegarao, Cagayan to obtain possession of
the attached property was an act of compliance with the
writ of attachment.This action, belated as it was, did not
mitigate his liability. Much less did it exculpate him from
penalty.
IN VIEW OF THE FOREGOING, respondent sheriff
is hereby found administratively liable as charged and
is SUSPENDED for six (6) months without pay with a
warning that the commission of the same or similar acts
in the future shall be dealt with more severely by this
Court.
SO ORDERED.

[A.M. No. MTJ-04-1518. January 15, 2004]

Attys. VILMA HILDA D. VILLANUEVA-FABELLA and
WILMAR
T.
ARUGAY, complainants, vs.
Judge
RALPH
S.
LEE
and
Sheriff
JUSTINIANO C. DE LA CRUZ JR., both of the
Metropolitan
Trial
Court,
Branch
38, Quezon City, respondents.
DECISION
PANGANIBAN, J.:

24
Page

without the least delay (Pascual vs. Duncan, 216 SCRA

786 [1992]), x x x.

Once more, we remind members of the judicial

branch judges and judicial personnel alike -- to be
conscientious, diligent and thorough in the performance
of their functions. At all times they must observe the high
standards of public service required of them.
The Case and the Facts
In an administrative Complaint [1] dated November
12,
2002,
Attys. Vilma Hilda
D.
VillanuevaFabella and Wilmar T. Arugay charged Judge Ralph S. Lee
of
the
Metropolitan
Trial
Court
(MeTC)
of Quezon City (Branch 38) with manifest partiality,
incompetence and gross ignorance of the law; and
Sheriff Justiniano C. de la Cruz Jr. of the same MeTC, with
unjust, oppressive, irregular and excessive enforcement
of a writ of attachment. The factual antecedents of the
matters are summarized by the Office of the Court
Administrator (OCA) as follows:
The complainants are counsels for the defendants in Civil
Case No. [38]-28457 entitled Star Paper Corporation vs.
Society of St. Paul and Fr. Leonardo Eleazar for Sum of
Money with Prayer for Preliminary Attachment. They
narrated that on 19 June 2002, their clients were served
a copy of the complaint and a Writ of Attachment by
Sheriff Dela Cruz based on the plaintiffs allegation that
the defendants contracted a debt in bad faith with no
intention of paying the same.
On the aforementioned day, a printing machine was
levied and delivered to the plaintiffs warehouse, although
there was an offer by the defendants to pay right there
and then P223,457.75, the amount fixed in the order of
attachment, but the plaintiff denied the defendants plea
not to attach the machine, saying that [it] had already
set [its] mind on attaching the same.
Atty. Fabella, together with three (3) priests, asked the
sheriff to levy on a less expensive machine but to no
avail. She then told the sheriff that he [would]
unnecessarily levy on the machinery because a cash
deposit to discharge the attachment could be filed that
same afternoon but he just dismissed the same, saying
that it takes time before the court could approve
the counterbond.
The complainants claim[ed] that Sheriff Dela Cruz
violated x x x Rule 57, Section 7, 1997 Rules of Civil
Procedure which provide[d] that in the attachment of
personal property capable of manual delivery, [the
property should] be taken and safely kept in the sheriffs
custody. The machinery, according to complainants,
[was] brought to [the] plaintiffs warehouse in San
Francisco
del
Monte, Quezon City. The
foregoing
show[ed] that the implementation of the writ of
attachment was marred by excessiveness, irregularity
and oppressiveness.
xxxxxxxxx

A Motion for reconsideration of the 17 July 2002 Order

was filed on 30 August 2002. Defendants stressed that
the Motion to Withdraw Cash Deposit has no basis, shows
no urgency, lacks notice and hearing, and is already a
prejudgment of the case even before the pre-trial stage
which is tantamount to the taking of property without
due process of law.
For failure of the plaintiff to appear at the pre-trial
conference, the court granted the motion to declare the
plaintiff as non-suited as well as the prayer to allow the
ex parte presentation of the defenses evidence on its
counterclaim.
The plaintiff then filed a Verified Motion for
Reconsideration of the Order declaring it as non-suited[,]
which was set for hearing in the morning of 24 October
2002,
the
same
day
the
aforementioned
ex partepresentation of evidence was supposed to
commence.
Judge Lee was not around in the morning so the hearing
on the motion did not materialize with the exparte presentation of evidence in the afternoon because
the Clerk of Court refused to proceed for the reason that
a motion for reconsideration had been filed the day
before. The Clerk of Court then conferred with the
respondent Judge in his chambers who produced a
handwritten note granting the said motion.She explained
to complainant Atty. Arugay that she did not notice that
Judge Lee had already issued the Order granting such
motion[;] thus, the ex parte presentation of evidence
could not proceed.
According to complainants, the Clerk of Court could not
explain the irregularity in the granting of the plaintiffs
Motion for Reconsideration and the fact that the same
was swiftly resolved[,] while the defendants similar
motion [had] not been resolved for more than two (2)
months already.[2]
In
his
Comment[3] dated January
9,
2003,
respondent judge claimed that the Complaint was fatally
defective, because complainants did not have legal
personality to file it; neither did they present affidavits,
verified statements or any authority to represent their
clients. Further, the Complaint did not contain a
certification of non-forum shopping, but instead had a
handwritten verification not sworn to or subscribed
before an administering officer.

25
Page

On 3 July 2002, Judge Lee granted the defendants Urgent

Motion
to
Discharge
Attachment
filed 19
June
2002. Thereafter, on 9 July 2002, an Urgent ExParte Motion to Withdraw Cash Deposit was filed, without
notice to the defendants and despite failure of the
plaintiff to set such litigious motion for hearing and
contrary to existing laws and jurisprudence. Judge Lee
granted
the
same
in
his
Order
of 17
July
2002. Defendants only learned of the withdrawal when
they received a copy of the said Order.

He likewise assailed complainants allegations as

hearsay. As to what had allegedly transpired during the
implementation of the subject Writ of Attachment, he
adopted
the
averments
in
respondent
sheriffs
Comment[4] alleging the presumption of regularity in the
discharge of official functions.
Respondent judge admitted that he had committed
a procedural error when he released the counterbond[5] to the plaintiff in the said civil case. However,
when the defendants therein, through their Motion for
Reconsideration, called his attention to the mistake, he
immediately ordered[6] the return[7] of the counter-bond
to the custody of the Office of the Clerk of Court. He cited
jurisprudence to defend his acts and asserted his good
faith and lack of malice. Moreover, he averred that he
had not delayed the resolution of the Motion. Finally, he
urged the Court to dismiss the instant Complaint outright
for being instituted without basis and merely to harass
him.
In his Comment,[8] respondent sheriff claimed that
after receiving the Writ of Preliminary Attachment, he
sought its implementation through the assistance of the
clerk of court of the MTC-Makati, Sheriff Ernesto Adan,
and the Makati police. He allowed the parties in the civil
case to negotiate for a settlement, but when the
negotiations bogged down, he attached a printing
machine that was not in use at the time.
He denied that there was abuse in the levy, claiming
that the machine was an old 1970 model. Moreover, he
said that, contrary to complainants allegation that the
machine was valuable, no receipt to prove its true value
was ever shown.
Respondent sheriff added that it was in his own
belief and best judgment to temporarily place the delicate
printing machine in the warehouse of the plaintiff for
safekeeping. The machine was eventually returned to the
defendants by virtue of the Order discharging the Writ. In
fact, one of the complainants personally acknowledged
receipt of the machine.
As to the allegation that he was arrogant,
respondent sheriff claimed that he waited for more than
three
hours
before
exercising
his
ministerial
function. Lastly, he adopted the averments in the
Comment of respondent judge on other events that had
transpired during the pendency of the civil case, the
subject of the instant Complaint.
Evaluation and Recommendation of the OCA
The OCA opined that the provisions cited by
complainants -- those in Sections 12 and 18 of Rule 57 of
the 1997 Rules of Civil Procedure [9] -- did not require the
adverse party to be first notified and then heard before
an attachment bond may be released. Considering that
the bond posted by the attaching creditor would answer
for the damages and costs the court may award the

According to the OCA, the error was corrected when

respondent judge, on Motion for Reconsideration,
reversed himself before the adverse party incurred any
damage. The OCA emphasized that before the full
disciplinary powers of this Court could befall a judge, the
erroneous act should have been committed with fraud,
dishonesty, corruption, malice or bad faith. It opined that
such fact had not been clearly and convincingly shown in
the instant case.[10]
The OCA found that respondent sheriff had erred
when he deposited the plaintiffs levied property in the
warehouse and thereby lost actual or constructive
possession thereof. The OCA said that this legal violation
could not be justified by the weight and the condition of
the machine, which could have been deposited in a
rented private warehouse where it could have been
guarded under his strict supervision.
Consequently,
the
OCA
recommended
that
respondent judge be REMINDED to be more circumspect
in the performance of his duties and to keep abreast with
the law and jurisprudence; and that respondent sheriff be
SUSPENDED for one (1) month without pay for violation
of Rule 57, Section 7(b) of the 1997 Rules of Civil
Procedure with a WARNING that a repetition of the same
or similar act(s) shall be dealt with more severely in the
future.[11]
The Courts Ruling
We agree with the findings and the recommendation
of the OCA.
Administrative Liability
With respect to the charges against respondent
judge, we find that his grant of the withdrawal of the
cash deposit -- an Order he later reversed by ruling that
the deposit be returned to the clerk of court -- was a
mere error of judgment, not an act revealing gross
ignorance of the law or procedure.
Attachment is a juridical institution intended to
secure the outcome of a trial -- specifically, the
satisfaction of a pecuniary obligation. [12] Such order is
enforced through a writ that may be issued at the
commencement of an action,[13] commanding the sheriff
to attach property, rights, credits or effects of a
defendant to satisfy the plaintiffs demand.[14] Hence, the
property of a defendant, when taken, is put
in custodia legis.[15]
In order to prevent the sheriff from levying an
attachment on property, the defendant (also called the
adverse party) may make a deposit or give a counterbond in an amount equal to that fixed in the order of

26
Page

adverse party by reason of the attachment, the better

practice was for the latter to be notified and heard before
the motion to discharge attachment could be resolved.

attachment. Such deposit or counter-bound is intended

to secure the payment of any judgment that the plaintiff
(also called the attaching party or the applicant to the
writ) may recover in the action. [16] After a writ has been
enforced, however, the adverse party may still move for
the discharge of the attachment, wholly or in part, by
also making a deposit or giving a counter-bond to secure
the payment of any judgment[17] the attaching party may
recover in the action.[18] The property attached shall then
be released and delivered to the adverse party; and the
money deposited shall be applied under the direction of
the court to the satisfaction of any judgment that may be
rendered in favor of the prevailing party.[19]
In the instant case, respondent judge had
ordered[20] the withdrawal of the cash deposit of the
defendant and released it in favor of the plaintiff, even
before judgment was rendered.This action was clearly in
violation of the Rules mandating that after the discharge
of an attachment, the money deposited shall stand in
place of the property released.[21] However, the
inadvertence[22] of respondent judge was not gross
enough to merit sanction.
First, he rectified himself within the period given for
deciding motions. Section 15(1) of Article VIII of the
Constitution mandates all trial courts to resolve all
matters filed within three months from date of
submission.[23] The Motion for Reconsideration[24] of the
July 17, 2002 Order granting the withdrawal of the
deposit was filed on August 30, 2002, and submitted for
resolution on September 5, 2002, [25] the date of hearing.
[26]
The Order[27] granting this Motion was then issued
on November 4, 2002, well within the three-month
period. The money was returned, and no prejudice was
suffered by any of the parties.
Second, respondent judge owned up to his
mistake[28] in his Comment. This is an admirable
act. Under the Code of Judicial Conduct, judges should be
the embodiment of competence [29] and should so behave
at all times as to promote public confidence in the
integrity of the judiciary.[30] They must be faithful to the
law.[31] That respondent judge admitted his mistake
shows his recognition of his fallibility and his openness to
punishment, the imposition of which restores public
confidence in the judicial system. His July 17, 2002 Order
was merely an honest mistake of judgment -- an
innocent error in the exercise of discretion -- but not a
display of gross incompetence or unfaithfulness to the
law.
We have already ruled that as long as the judgment
remains unsatisfied, it would be erroneous to order the
cancellation of a bond filed for the discharge of a writ of
attachment.[32] In like manner, it would be erroneous to
order the withdrawal of a cash deposit before judgment is
rendered. Be that as it may, a [judge] may not be held
administratively accountable for every erroneous order
x x x he renders.[33] Otherwise, a judicial office would be
untenable,[34] for no one called upon to try the facts or
interpret the law in the administration of justice can be

Complainants alleged that respondent judge

committed another violation of the Rules of Court when
he granted[38] the plaintiffs Urgent Ex-Parte Motion to
Withdraw Cash Deposit.[39]The Rules mandate that,
except for motions that the court may act upon without
prejudicing the rights of the adverse party, every written
motion shall be set for hearing by the applicant.[40]The
notice of hearing shall be addressed to the defendants
therein and shall specify the time and date of the
hearing, which must not be later than ten (10) days after
the filing of the motion.[41] The motion and notice shall be
served at least three days before the date of hearing.
[42]
Without proof of its service, the court cannot act upon
it.[43]
Indeed, the plaintiffs Motion to withdraw the cash
deposit lacked notice of hearing and proof of
service. Respondent judge should not have acted upon
it. However, because he had erroneously thought that the
rights of the defendants would not be prejudiced thereby,
he took action. His poor judgment obviously resulted in
his issuance of the erroneous Order that granted the
release of the deposit.
Similarly, the verified Motion for Reconsideration of
the Order declaring plaintiff as non-suited and allowing
the ex-parte presentation of evidence by the defense
should have been heard in open court, not granted in
chamber. Respondent judge must have thought that this
Motion, which had been filed by the plaintiff, required
immediate action; and so the former granted it by
ordering -- through a handwritten note which we do not
approve of -- the deferment of the scheduled
presentation.[44] This Order should not have been issued,
because the Motion had been filed only a day before the
scheduled hearing.[45] The rules on notice of hearing and
proof of service should have been observed by both the
plaintiffs counsel and respondent judge.Unfortunately,
the latters poor judgment likewise prevailed, but still fell
short of gross ignorance of the law or procedure.
Specious is the argument of respondent judge that
complainants have no legal personality to file the instant
Administrative Complaint against him. His contention that
the allegations contained therein are hearsay[46] also
deserves scant consideration. Rule 140 allows the
institution of disciplinary proceedings against judges, not
only upon a verified complaint -- supported by affidavits
of persons who have personal knowledge of the facts
alleged therein or by documents substantiating the
allegations -- but even upon an anonymous one.
[47]
Complainants herein have the requisite personal
knowledge and have, in fact, executed a joint ComplaintAffidavit and substantiated their allegations with
pertinent documents.

27
Page

infallible.[35] For liability to attach for ignorance of the law,

the assailed order of a judge must not only be erroneous;
more important, it must be motivated by bad faith,
dishonesty, hatred or some other similar motive.
[36]
Certainly, mere error of judgment is not a ground for
disciplinary proceedings.[37]

The
verification[48] in
their
Complaint,
albeit
handwritten after the jurat, is sufficient in form and
substance.[49] Such verification is a clear affirmation that
they are prepared to establish the truth of the facts
pleaded.[50] In fact, the lack of it is merely a formal defect
that is neither jurisdictional nor fatal. [51] This Court may
order the correction of a pleading, if the attending
circumstances are such that strict compliance with the
rule may be dispensed with in order to serve the ends of
justice.[52] The jurat that preceded the verification simply
evidences the fact that the Affidavit was properly made
and sworn to before the officer certifying it.
[53]
Furthermore, a certification against forum shopping is
not needed in this case; Rule 140 makes no such
requirement.
We find that the charges against respondent sheriff
have bases. Verily, he blatantly violated Section 7(b) of
Rule 57 of the Rules of Court when he deposited the
machine in the warehouse of the plaintiff. In enforcing a
writ of attachment, a sheriff who takes personal property
capable of manual delivery shall safely keep it in custody
after
issuing
the
corresponding
receipt therefor.
[54]
Respondent sheriff failed to do so.
To constitute a valid levy of attachment, the officer
levying it must have actual possession of the property
attached.[55] He must put himself in [a] position to, and
must assert and, in fact, enforce a dominion over the
property adverse to and exclusive of the attachment
debtor.[56] To this rule we add that the officer cannot even
deliver the property to the attachment creditor, as the
parties must await the judgment in the action. The levied
property must be in the substantial presence and
possession[57] of the levying officer, who cannot act as
special deputy sheriff of any party litigant.[58] The officer
may put someone in possession of the property for the
purpose of guarding it, but the former cannot be
relieve[d] x x x from liability to the parties interested in
said attachment.[59]
Sheriffs are officers of the court [60] who serve and
execute writs addressed to them by the court, and who
prepare and submit returns of their proceedings. [61] They
also keep custody of attached properties.[62] As officers of
the court, they must discharge their duties with great
care and diligence.[63] They have to perform faithfully and
accurately what is incumbent upon [them][64] and show at
all times a high degree of professionalism in the
performance of [their] duties.[65]
The duty of sheriffs to execute a writ issued by a
court is purely ministerial, [66] not discretionary.[67] Clearly,
they must keep the levied property safely in their
custody, not in that of any of the parties. They exercise
no discretion in this regard, for attachment is harsh,
extraordinary and summary in nature -- a rigorous
remedy which exposes the debtor to humiliation and
annoyance.[68] Contrary to the claim of respondent sheriff,
his unusual zeal and precipitate decision to give
possession of the machine to the plaintiff effectively
destroys, the presumption of regularity in his

In implementing the Writ, respondent sheriff cannot

afford to err without adversely affecting the proper
dispensation of justice.[71]
Sheriffs play an important role in the administration of
justice. As agents of the law, high standards are expected
of them. x x x His conduct, at all times, must not only be
characterized by propriety and decorum but must, and
above all else, be above suspicion.[72]
As a public officer who is a repository of public
trust, respondent sheriff has the obligation to perform
the duties of his office honestly, faithfully and to the best
of his ability.[73] He must be circumspect and proper in his
behavior.[74] Reasonable skill and diligence he must use in
the performance of official duties, especially when the
rights of individuals may be jeopardized by neglect.[75]
Sheriffs must always hold inviolate and invigorate
the tenet that a public office is a public trust. [76] As court
personnel, their conduct must be beyond reproach and
free from any suspicion that may taint the judiciary.[77] In
view of their exalted position as keepers of public faith,
court personnel are indeed saddled with a heavy burden
of responsibility[78] to the public.Hence, they must
thoroughly avoid any impression of impropriety, misdeed
or negligence in the performance of official duties.[79] We
have held thus:
x x x [T]his
Court
condemns
and
would
never
countenance such conduct, act or omission on the part of
all those involved in the administration of justice which
would violate the norm of public accountability and
diminish or even just tend to diminish the faith of the
people in the Judiciary.[80]
Once again we emphasize that [a]t the grassroots
of our judicial machinery, sheriffs x x x are indispensably
in close contact with the litigants, hence, their conduct
should be geared towards maintaining the prestige and
integrity of the court, for the image of a court of justice is
necessarily mirrored in the conduct, official or otherwise,
of the men and women who work thereat, from the judge
to the least and lowest of its personnel; [81] hence, it
becomes the imperative sacred duty of each and
everyone in the court to maintain its good name and
standing as a temple of justice. [82] Dismissed for lack of
basis, however, is the charge of excessive enforcement of
a writ filed against respondent sheriff.
Applying Section 8 of Rule 140 of the Rules of
Court, respondent judge is found wanting in the exercise
of good discretion only. His errors of judgment fall short
of gross ignorance of the law or procedure, yet reflect
poorly on his esteemed position as a public officer in a
court of justice. Judges must be conscientious, studious
and thorough,[83] observing utmost diligence in the

28
Page

performance of official duties.[69] Any method of execution

falling short of the requirement of the law deserves
reproach and should not be countenanced.[70]

performance of their judicial functions.[84] They have to

exhibit more than just cursory acquaintance with statutes
and procedural rules.[85] Moreover, they must require
court personnel to observe at all times high standards of
public service and fidelity.[86]
Applying the Uniform Rules on Administrative Cases
in the Civil Service,[87] we find respondent sheriff guilty of
simple neglect of duty for violating Section 7(b) of Rule
57 of the Rules of Court. Simple neglect of duty is the
failure x x x to give proper attention to a task
expected[88] of an employee, thus signifying a disregard of
a duty resulting from carelessness or indifference.
[89]
Classified as a less grave offense, it is punishable by a
suspension of one month and one day to six
months. Considering that the failure of respondent sheriff
to fulfill his duty seems to be his first infraction during his
stint in the judiciary, the Court considers the
recommended sanction appropriate.
WHEREFORE,
the
Court
reiterates
its REMINDER[90] to Judge Ralph S. Lee of the
Metropolitan Trial Court of Quezon City (Branch 38) to
evince due care in the exercise of his adjudicative
functions. On the other hand, Sheriff Justiniano C. de la
Cruz Jr. of the same branch is found GUILTY of simple
neglect of duty and is hereby SUSPENDED for one month
and one day without pay, with a warning that a repetition
of the same or of a similar act in the future shall be dealt
with more severely.
SO ORDERED.

REYNALDO
SEBASTIAN, complainant,
vs.
SHERIFF ALBERTO A. VALINO, respondent.
QUIASON, J.:
Marblecraft, Inc., represented by its Assistant General
Manager, Reynaldo Sebastian, charges Alberto A. Valino,
Senior Deputy Sheriff, Office of the Regional Sheriff,
Pasig, Metro Manila, with (1) gross abuse of authority
committed in connection with the implementation of the
writ issued by the Regional Trial Court, Makati, Metro
Manila, in Civil Case No. 89-3368, and (2) refusal to
enforce the trial court's for the return of the seized items.
Complainant alleges that:
1. On March 3, 1989, Private Development Corporation of
the Philippines (PDCP) filed a replevin suit against
Marblecraft, Inc., in Civil Case No. 89-3368, in order to
foreclose the chattels mortgaged by Marblecraft. On
March 30, 1989, the Regional Trial Court, Makati, issued
a writ of seizure directed against Marblecraft covering the
chattels sought to be replevied.
2. The enforcement of the writ of seizure was delayed
because of the writ of preliminary injunction enjoining
PDCP from proceeding with the foreclosure sale issued by
the Regional Trial Court, Pasig, Metro Manila in Civil Case
No. 58006, It was only on October 31,1990, when the
Regional Trial Court, Pasig, dissolved the writ of
preliminary injunction.
3. On November 9, 1990, at around 10:37 A.M.,
respondent, accompanied by several policemen and PDCP
employees, went to the office of Marblecraft at Barrio
Santolan, Pasig, to implement the writ of seizure.
Respondent and his companions forcibly opened the
lockers and desk drawers of the employees of
complainant and took their personal belongings, as well
as some office equipment issued to them. The employees
filed with the Office of the Provincial Prosecutor of Rizal
two criminal complaints for robbery against respondent
and his companions.
4. Respondent only showed to complainant's counsel a
copy of the writ but did not furnish him with a copy of the
application for the writ, the supporting affidavit and the
bond.
5. In the course of the implementation of the writ, which
lasted for four days, several pieces of machinery and
equipment were destroyed or taken away by respondent.

29
Page

A.M. No. P-91-549 July 5, 1993

6. Respondent turned over the seized articles to the

counsel of PDCP and allowed these items to be stored in
PDCP's warehouse in Taguig, Metro Manila.
7. On November 14, 1990, complainant posted a
counterbond. In an order issued on the same day, the
Regional Trial Court, Makati, approved the bond and
directed the immediate return of the seized items. After
denying PDCP's motion to set aside the November 14
Order, the trial court reiterated the directive for the
return of the seized items in its November 26 Order.
Respondent did not implement the orders.
8. PDCP filed a motion for reconsideration of the
November 26 Order, which was denied in an Order dated
December 11, 1990.
In his comment, respondent branded the administrative
complaint against him as pure harassment filed by
Marblecraft after he had refused to defer the
implementation of the writ of seizure. He said that if he
did not implement the writ, he would have been accused
by PDCP of non-performance of his duties as a sheriff. He
pointed out that the criminal complaints for theft filed
against him by the employees of complainant were
dismissed by the Provincial Prosecutor of Rizal.
The administrative complaint was referred to Judge
Martin S. Villarama Jr. of the Regional Trial Court, Pasig,
for investigation, report and recommendation.
In his report, Judge Villarama, found respondent guilty of
partiality when he immediately turned over the seized
items to PDCP, and of willful refusal to enforce the
November 14, 26 and December 11, 1990 Orders of the
Regional Trial Court, Makati.
Under the Revised Rules of Court, the property seized
under a writ of replevin is not to be delivered
immediately to the plaintiff. The sheriff must retain it in
his custody for five days and shall return it to the
defendant, If the latter, as in the case, requires its return
and files a counterbond (Sec. 4, Rule 60, Revised Rules
of Court). In violation of said Rule, respondent
immediately turned over the seized articles to PDCP. His
claim that the Office of the Regional Sheriff did not have
a place to store the seized items, cannot justify his
violation of the Rule. As aptly noted by the Investigating
Judge, the articles could have been deposited in a
bonded warehouse.
Respondent must serve on Marblecraft not only a copy of
the order of seizure but also a copy of the application,
affidavit and bond (Sec. 4, Rule 60, Revised Rules of
Court). Respondent did not furnish defendant with a copy
of the application, affidavit and bond. By his own
admission, he only served it with a copy of the order of
seizure (Rollo, p. 37).
The more serious infraction of respondent is his refusal to
implement the order of the Regional Trial Court, Makati

The Order dated November 14, 1990 directed him "to

immediately return to defendant all its properties seized
and taken from its premises pursuant to the writ of
seizure of March 30, 1989, from receipt of this Order
(sic)"
(Rollo,
p. 42)
The Order dated November 26, 1990 directed him "to
implement the Order of this Court dated November 14,
1990 and to immediately return to defendant all its
properties seized and taken from its premises pursuant to
the writ of seizure dated March 30, 1989 from receipt of
this
Order
(sic)"
(Rollo,
p. 44).
The Order dated December 11, 1990 directed him "to
implement the Order of this Court dated November 26,
1990, within three (3) days from the receipt hereof,
otherwise this Court will be constrained to appoint and
deputize another sheriff to implement the order dated
November 26, 1990" (Rollo, p. 47).
The only action taken by respondent to implement the
Order dated December 11, 1990 was to write a letter on
December 12, 1990, addressed to the counsel of PDCP,
requesting the turnover of seized articles. As expected,
PDCP's counsel refused to part with the possession of the
seized articles and to issue a letter of authorization to
withdraw the same from the warehouse. Instead of
taking possession of the articles, respondent merely
reported to the Regional Trial Court that "[i]t is now clear
that the undersigned cannot implement the Court order
dated December 11, 1990 by reason of the refusal of
PDCP to accept or to honor said Court order" (Rollo,
p.48).
The petition for certiorari of PDCP to question the orders
of the Regional Trial Court, Makati, was filed with the
Court of Appeals only on December 17, 1990. The Court
of Appeals issued a temporary restraining order only on
December 21, 1990. Respondent therefore had more
than seven days within which to enforce the orders of the
trial court if he was minded to do so.
Respondent could have avoided getting into his present
predicament had he not turned over the possession of
the seized goods prematurely to the PDCP.
The complainant cannot be blamed if it harbored the
suspicion that respondent was beholden to PDCP. The
zeal with which respondent enforced the order of seizure
in favor of PDCP was in sharp contrast with his inaction in
enforcing the three orders of the trial court directing him
to return the seized items to complainant.
It is not for respondent to question the validity of the
orders of the trial court. It is for him to execute them. As
observed by the Investigating Judge, "[t]here is therefore

30
Page

for him to return to complainant the articles seized

pursuant to the writ of seizure dated March 30, 1990.

no excuse for respondent's wilfull refusal to implement

the Order of the Court" (Report and Recommendation, p.
10). Disobedience by court employees of orders of the
court is not conducive to the orderly administration of
justice. The display of partially in favor of a party as
against the other party erodes public confidence in the
integrity of the courts.
IN VIEW OF THE FOREGOING, the Court finds respondent
guilty of serious misconduct and RESOLVED to impose
upon him the penalty of FOUR (4) MONTHS SUSPENSION
without pay, the period of which should not be charged to
his accumulated leave, with a WARNING that a repetition
of the same or of acts calling for disciplinary action will
be dealt with more severely. This resolution is
IMMEDIATELY EXECUTORY, and respondent is hereby
ordered to forthwith desist from performing any further
official functions appertaining to said office.
SO ORDERED.

A.M. No. P-94-1108 August 23, 1995

MARIANETTE
VILLAREAL, complainant,
vs.
ROLANDO T. RARAMA, RESTITUTO MADRAZO,
FIDEL
CASUYON,
and
AGUINALDO
DEL
CAMPO,respondents.

REGALADO, J.:
The present administrative case arose from a sworn
complaint 1 filed
by
Marianette
Villareal
against
respondents Rolando T. Rarama, Restituto Madrazo, Fidel
Casuyon, and Aguinaldo del Campo who are all serving as
Sheriff III in Branches V, VII, II, and III, respectively, of
the Municipal Trial Courts in cities (MTCC), Davao City, for
allegedly "conniving and confederating in maliciously
serving a writ of execution intended for another person
who is living in another place." Pursuant to the First
Indorsement of Deputy Court Administrator Reynaldo L.
Suarez dated August 24, 1994, 2 the complaint was
referred to respondent Sheriff Rolando T. Rarama,
through Judge Roberto Q. Canete, MTCC, Branch 5,
Davao City, for comment. Subsequently, respondents
submitted their joint counter-affidavit 3 to which a
reply 4 was filed by herein complainant. A rejoinder to
complainant's reply 5 was also submitted by respondents.
It appears that an action for collection of a sum of money
was filed by the Cooperative Rural Bank of Davao City
against the spouses Marianette (herein complainant) and
Roy Villareal, Lito Lacorda and Felimon Cangrejo before
the MTCC, Branch 5, of Davao City docketed as Civil Case

According to complainant, at around 1:30 P.M. of April

25, 1994, respondent Rarama arrived at her house in
Digos, Davao del Sur, together with the other
respondents and three employees of the Cooperative
Rural Bank of Davao City, Inc., including one Vic Belo who
is a collector of the bank. Respondent Rarama introduced
himself as a sheriff of Davao City and informed her that
they were going to attach her properties because she lost
in a case. Complainant denied having been charged in
court, much more of having lost in a case, and that she
did not owe anything to the bank. When respondent
Rarama persisted in getting her properties, she
demanded and was shown the writ of execution. She
objected thereto, claiming that the same was not
addressed to her but to Felimon Cangrejo and that the
writ was being served after more than five years from the
date the decision was rendered. The reply given her was
that she is the principal borrower and the only one who is
solvent.
Despite the pleas of complainant and a neighbor for the
postponement of the implementation of the writ until she
shall have consulted her lawyer, respondents immediately
proceeded to pull out from complainant's house the
following items, viz.: one VHS player, one Singer sewing
machine, one Chinese cabinet, and another Chinese
cabinet with glass shelves. Allegedly, complainant was
forced to sign an inventory receipt because she would
otherwise not be able to get back her things. She
hastened to add that when she signed the receipt, the
words "with my conformity" were not written thereon.
The following day, complainant and her husband went to
the bank to inquire about the status of her loan and she
was informed that, unless she settled her account, her
properties would not be released. Complainant avers that
because of this she was constrained to pay the amount of
P10,000.00 despite earlier representations made with the
bank that she had fully paid her loan to the bank
collector. She further asserts that she was thereafter
forced to write a promissory note as dictated by the
assistant manager of the bank, Gerry Alag, and the
bank's lawyer, Atty. Herbert Arteg. Eventually, after she
presented the receipt of payment and the promissory
note to respondent Rarama, the attached properties were
released to herein complainant.
On the other hand, respondent Rarama claims that on
April 25, 1994, he went to Digos, together with Vic Belo
and Bading dela Fuente, employees of the bank, to
coordinate with Provincial Sheriff Andres regarding the
implementation of the alias writ of execution issued in
the aforementioned Civil Case No. 548-E-M. However, he

31
Page

No. 548-E-M. The records show that summons was

served upon respondent Cangrejo who, however, failed to
file his answer, as a consequence of which he was
declared in default. On April 19, 1989, judgment 6 was
rendered against him in favor of the plaintiff bank without
prejudice to his right to proceed against his co-debtors.
On March 29, 1994, an alias writ of execution 7 was
issued by the trial court against Cangrejo.

was informed that he would have to implement the writ

on his own because the other sheriffs were not available.
On their way out of the Hall of Justice, they met
respondents Madrazo, Casuyon and del Campo who, upon
learning that Rarama's group was going to Digos where
they all lived, decided to join the group so they could get
a free ride.
Upon the suggestion of Vic Belo, the bank collector, the
group first went to the house of complainant purportedly
to ask for the exact address of Felimon Cangrejo against
whom the writ was issued. When they reached the house
of complainant, respondent Rarama introduced himself
and his other companions, and then inquired from the
former about the address of Cangrejo. When complainant
asked why they were asking her, Rarama showed her the
writ of execution and the court decision. It was then that
complainant stated that she was the principal defendant
in the case.
Respondents further allege that complainant requested
Rarama not to implement the writ against Cangrejo
because he was merely her co-maker who never
benefited from the loan extended to her by the Rural
Bank of Davao, after which she offered to pay her
obligations in monthly installments. Respondent Rarama
did not agree to the proposal since he was not authorized
to enter into that compromise but, at the same time, he
suggested that complainant deposit some of her personal
properties as security for the settlement of her obligation,
and the latter allegedly agreed. Much later, the properties
hereinbefore mentioned were released to complainant by
virtue of a letter from the creditor bank.
In addition, respondents controvert the claims of
complainant that they forcibly entered her house and
took possession of her personal properties without her
consent. On the contrary, they insist that complainant
deposited her personal properties voluntarily and of her
own free will. They likewise contend that it is not true
that complainant has never been charged in court for in
fact there was a pending criminal case for violation of the
law on bouncing checks, as well as a civil case for
collection of a sum of money, filed against her.
In her aforesaid reply to respondents' counter-affidavit,
complainant maintains her original stand that she did not
voluntarily deposit her personal properties with
respondents and declares as untrue respondents' claim
that they merely came to see her to ask for the address
of Felimon Cangrejo.
On January 16, 1995, this Court issued a resolution, 8 as
recommended by Deputy Court Administrator Reynaldo L.
Suarez, referring the case to Executive Judge Augusto B.
Breva of the Regional Trial Court of Davao City for
investigation, report and recommendation within sixty
(60) days from receipt of the records thereof.
Thereafter, Judge Breva submitted his report dated July
12, 1995, with the recommendation that respondent

We quote with approval the findings of the investigating

judge regarding the propriety of the respective claims of
the parties and the culpability, or absence thereof, with
respect to each of the respondents herein:
RATIONALIZATION: The defense of Sheriff
Rarama

that
he
along
with
the
representatives of the plaintiff bank went to the
house of the complainant only to ask for the
address of Felimon Cangrejo; that the four items
taken by them were offered as deposit by the
complainant after requesting Rarama not to
implement the alias writ against Cangrejo as it
was her loan and Cangrejo was only her comaker; and that two days after, she got the
items back upon making a partial payment of
P10,000.00 to said bank and promising in
writing to pay the balance within sixty days
cannot be accepted as true in view of the
followings points of the evidence:
(1) The alias writ of execution (Exh. "5"),
although directed against Felimon Cangrejo only,
was actually served by Sheriff Rarama on the
complainant as evidenced by her signature at
the bottom thereof along with the date "4-2594" (Exh. "5-A"), the date of the taking of the
four items. Service of the writ on her was
indicative of the intent to implement it against
her personal interests.
(2) The RECEIPT (Exh. "6") issued by Rarama to
the complainant, for the four items, positively
shows that it was prepared in advance. The
opening paragraph is typewritten and reads:
"Received from defendants MARIANETTE & ROY
VILLAREAL the personal properties mentioned
and particularly described below, to wit:" Thus
the fact that the names "MARIANETTE & ROY
VLLLAREAL" had already been typewritten
beforehand is a further indication of said intent,
otherwise their names would have been
handwritten like the descriptions of the four
items appearing therein.
(3) There is nothing in the RECEIPT showing
that the items were only deposited. On the
contrary, it contains a typewritten paragraph
which reads: "That the above-mentioned
personal property/ies was/were levied and
attached by virtue of the Writ of Execution
issued by Honorable ROBERTO Q. CANETE,
Presiding Judge, MTCC, Branch 5, Davao City,
dated March 29, 1994".

32
Page

sheriff Rolando T. Rarama be declared guilty of an

administrative offense and that he be suspended for
three months, with a stern warning that a repetition of a
similar offense will be dealt with more severely. He
further recommended that the three other respondents
be exonerated.

(4) The four items were not brought to the

plaintiff bank (which would have been the case if
they were merely deposited by private
arrangement) but to the MTCC which issued
the alias writ and from which the complainant
recovered them after paying P10,000.00 to the
bank.
(5) Vic Belo the collector of the bank, when
asked in the course of his testimony in this case
why he did not inquire before proceeding to
Digos on April 25, 1994, (about) the address of
Felimon Cangrejo from the NFA in Davao City,
where the latter had been employed
answered ". . . my perception is that since Mrs.
Villareal is the principal borrower I focused more
my attention on her" (TSN 6-7-95 p. 100).
On the other hand, the testimony of the
complainant cannot be entirely believed for the
following reasons:
(a) She claims to have already fully paid her
loan account with the plaintiff bank but has not
produced any receipt to substantiate it other
than the official receipt for the P10,000.00 she
paid on April 27, 1994, two days after the
incident complained of in this case happened
(Exh. "G").
(b) In her affidavit in support of her
administrative complaint she alleges that "I and
my husband have never been charged of (sic)
any criminal and/or civil case in Davao City." But
it turned out that she actually received the
summons issued in the same Civil Case No. 548E-M on September 27, 1990 as evidenced by her
signature thereon (Exh."2", "2-A" & TSN 6-5-95
pp. 29-30). The decision rendered in that case
against Cangrejo alone is dated April 19, 1989.
The alias writ directed against Cangrejo was
issued on March 29, 1994, which was within the
five-year period.
There appears to be no clear positive evidence
that respondents Casuyon, Madrazo and del
Campo really knew that the alias writ was
directed only against Cangrejo. And in her
testimony the complainant for the most part
only named Sheriff Rarama, and named sheriff
Casuyon only in the re-direct examination as the
one who wrote down the descriptions of the four
items taken from her house, writing as the
things were accordingly being pulled out "by the
other sheriffs" without naming them (TSN 6-595 pp. 46-47). She did not even identify them
during the hearing, and she got the names of
Madrazo and del Campo only days later from the
Court upon instruction of her adviser, then
Provincial Prosecutor Aves (same TSN p. 39).

Hence, we believe that the evidence only

warrants
a
finding
of
administrative
accountability on the part of Rolando Rarama.
While there is evidence to show that indeed complainant
Marianette Villareal is the principal debtor while Felimon
Cangrejo is merely a co-maker, the fact remains that
Cangrejo was the sole debtor adjuged liable for the loan
obtained from the Cooperative Rural Bank of Davao City,
Inc. and the alias writ of execution was directed only
against him. Hence, respondent Rarama had no authority
to implement the same against herein complainant
considering that, although she was named as a defendant
in the collection case, there was no judgment against her
as of the date of the incident.

33
Page

She did not particularize the participation of

each of the respondents except as to Rarama
and the writing of the RECEIPT by Casuyon,
referring to the respondents only as Rarama, or
as Rarama and the other sheriffs, or the sheriffs.
But Rarama was not only with the other
respondents sheriffs but with two employees of
the bank.

We find the recommended penalty of three month's

suspension proper and commensurate under the
circumstances obtaining in this case. However, the policy
adopted by the Court, a fine equivalent to the salary of
respondent for three months should instead be imposed,
but with some mitigation considering the nominal extent
of the damages sustained by complainant who, to a
certain extent, also contributed in bringing about the
situation which gave rise to the incident.
ACCORDINGLY, respondent Sheriff Rolando T. Rarama is
hereby declared GUILTY of serious misconduct in the
enforcement of the alias writ of execution in Civil Case
No. 548-E-M of the Municipal Trial Courts in Cities,
Branch 5, Davao City and he is hereby ordered to pay a
FINE of ten thousand pesos (P10,000.00). He is further
sternly warned that the commission of the same or a
similar offense hereafter will be punished with a more
severe sanction.
The complaint against respondents Restituto Madrazo,
Fidel Casuyon and Aguinaldo del Campo is hereby
DISMISSED for lack of merit.
SO ORDERED.

The sheriff, as an officer of the court upon whom the

execution of a final judgment depends, must necessarily
be circumspect and proper in his behavior. Execution is
the fruit and end of the suit and is the life of the
law. 9 Thus, when a writ is placed in the hands of a sheriff
it is his duty, in the absence of any instructions to the
contrary, to proceed with reasonable celerity and
promptness to execute it according to its mandate. He is
to execute the directives of the court therein strictly in
accordance with the letter thereof and without any
deviation therefrom.
Hence, a sheriff has no authority to levy on execution
upon the property of any person other than that of the
judgment debtor. If he does so, the writ of execution
affords him no justification, for such act is not in
obedience to the mandate of the writ. 10 As long as the
sheriff confines his acts to the authority of the process,
he is not liable, but all of his acts which are not justified
by the writ are without authority of law. This is so
because if an execution against one man would excuse
the sheriff for taking the property of another, every
citizen would be at his mercy and none could call his
estate his own. 11
Respondent Rarama's improvidence in enforcing a
judgment against complainant who is not the judgment
debtor in the case calls for disciplinary action.
Considering the ministerial nature of his duty in enforcing
writs of execution, it is incumbent upon him to ensure
that only that part of a decision ordained or decreed in
the dispositive portion should be the subject of execution,
no more and no less. That the title of the case specifically
names complainant as one of the defendants is of no
moment as execution must conform to that which is
directed in the dispositive portion and not what appears
in the title of the case. 12

34
VICTOR
ELIPE, complainant,
vs.
HONESTO FABRE, Deputy Sheriff, MTCC, Cagayan
de Oro City, respondent

Page

A.M. No. P-94-1068 February 13, 1995

Respondent Fabre denied the complainant's allegation.

He claimed that he levied on several properties of the
judgment debtors, but unfortunately the bid price paid
for them at the public auction was only P10,000.00. 4 He
justified his action in levying only on the personal
properties which he found at the business establishment
and in desisting from enforcing the writ with respect to
properties on the second floor of the residence of the
judgment debtors on two grounds: (1) the judgment
debtors refused to let him in; and (2) he did not have
any order from the MTCC to force open the door which
had been locked.

RESOLUTION

MENDOZA, J.:
This is an administrative complaint filed against
respondent Honesto G. Fabre, charging him with
nonfeasance and incompetence in the performance of his
duties as Deputy Sheriff of Branch 3 of the Municipal Trial
Court in the Cities (MTCC) at Cagayan de Oro City.
The complaint was referred to Judge Antonio A. Orcullo of
MTCC, Branch 3, Cagayan de Oro City who, in a report
dated November 15, 1993, found the charges to be true
and accordingly recommended that respondent be
reprimanded and given a stern warning that a repetition
of the same acts would be dealt with more severely.
In its memorandum dated August 29, 1994, the Office of
the Court Administrator concurs with the findings of the
investigating judge and recommends that respondent
deputy sheriff be fined P1,000.00 and given a stern
warning.
The record discloses that on June 19, 1992, the MTCC,
Branch 3, at Cagayan de Oro issued a writ of execution
for the enforcement of a barangay agreement in Case No.
91-144 for collection of unpaid rentals and construction
materials amounting to P100,000.00. Complainant
testified that on June 25, 1992, at nine o'clock in the
morning, respondent served the writ or judgment debtors
Michael dela Cerna and his wife but the respondent was
able to levy only upon a dilapidated vehicle and an old
piano. 1 Complainant stated that at ten o'clock in the
evening of the same day, the judgment debtors
surreptitiously removed several pieces of furniture from
the house which they rented. 2 On June 26 and 30 and
again on July 4, 11, 38 and 19, 1992, they removed
appliances and other personal properties and destroyed
building
fixtures
on
the
property
owned
by
complainant. 3 On these occasions, according to the
complainant, respondent did not make any effort to
prevent the judgment debtors from removing leviable
properties to implement the writ, despite the fact that he
had been told by complainant of the judgment debtors'
activities.

The records show that on July 10, 1992, respondent sold

to the complainant, as the highest bidder at public
auction, personal properties of the judgment debtors for
P10,000.00. On July 13, 1992, respondent levied on a
parcel of land owned by the judgment debtors which on
August 14, 1992 was also sold to complainant for
P15,006.00. 5 On
December
17,
1992,
personal
properties of the judgment debtors which had been levied
upon were sold, also to the complainant as the highest
bidder, for P2,001.00. 6 The result is that the judgment
debt of P100,000.00 was only partially satisfied to the
extent of P27,007.00.
In his memorandum report, Deputy Court Administrator
Juanito A. Bernad found that, because of respondent's
inaction and lack of diligence in enforcing the writ of
execution, the judgment debtors were able to cart away
properties which he could have levied upon execution.
There is merit in the following observations contained in
his memorandum:
Respondent Deputy Sheriff correctly
argued that he was not directed by any
Judge by court orders to stop the
carting away of properties or the
demolition
of
the
fixtures.
But
respondent Sheriff should understand
that by virtue of the writ of execution
issued in favor of herein complainant,
he (respondent Sheriff) was mandated
to levy upon properties of judgment
debtor
to
satisfy
an
obligation
amounting to P100,000.00. However, in
disregard of this Order, respondent
Sheriff chose to levy the properties of
the judgment debtor which amounted
only to P27,000.00.
If
indeed
respondent
Sheriff
is
dedicated in his work, respondent
Sheriff could have chosen to stop the
carting away of the valuable properties
of judgment debtor for the very
purpose of levying it and for the
purpose of complying with the Order.
If the arguments of respondent Sheriff
will be sustained, all judgment debtors
can easily circumvent the orders of the

Furthermore,
respondent
Sheriff
exhibited an utter disregard of what is
incumbent upon him when he failed to
inform the complainant that in order to
levy properties of the defendant on the
second floor of the establishment, a
special order of the court is necessary
to force or break-open the closed door
in accordance with Section 14, Rule 39
of the Rules of Court. The respondent
Sheriff's duty was apparent but he did
not comply with it as he should have.
The attack on the complainant's moral
character was not necessary in this
case, as it would not justify the nonperformance of his duties.
When a writ is placed in the hands of a
sheriff, it is his duty, in the absence of
instructions, to proceed with reasonable
celerity and promptness to execute it
according to its mandate. He has no
discretion whether to execute it or not
(Young vs. Momblan, A.M. No. P89-367,
9 January 1992, Second Division,
Melencio-Herrera, J.).
Indeed, as clearly stated in the Manual for Clerks of
Court, a sheriff, to whom a valid writ or process is
delivered to be levied upon a property within his
jurisdiction, is liable to the person in whose favor the
process or writ runs if he fails to make a levy upon
property owned by the judgment debtor within his
jurisdiction and by reason thereof the judgment creditor
is injured. It is omission not dependent upon intentional
wrong or negligent omission to seize property of
judgment debtor. 7
In Eduarte v. Ramos 8 we said:
Respondent ought to have known the correct procedure
to be followed in order to ensure proper administration of
justice, especially in its concluding stage. He failed
observe that degree of dedication to the duties and
responsibilities required of him as a sheriff. He is bound
to discharge his duties with prudence, caution and
attention which careful men usually exercise in the
management of their affairs. The sheriff, an officer of the
court upon whom the execution of a final judgment
depends, must be circumspect and proper in his behavior.
Execution is the fruit and end of the suit and is the life of
the law.

35
Page

court by carting away their properties

thinking that sheriffs have no authority
to stop them. This line of thinking and
reasoning will create chaos and
instability in the administration of
justice.

In the case at bar, it is not that respondent did not know

what he should do, given the problem that he was
confronted with. In his answer 9 respondent tried to
excuse himself from what was his duty, claiming that he
did not force his way into the second floor where the
judgment debtors resided because a special court order
was needed to enable him to do this. Knowing this to be
the case, it was his duty to see to it that such an order
was secured from the court.
The fact is that he has shown himself to be less than
energetic and zealous in the performance of his duty. His
lackadaisical attitude betrays his inefficiency and
incompetence which in accordance with sec. 46(b)(8) of
the Civil Service Law is a ground for disciplinary action. 10
WHEREFORE, a FINE of P2,000.00 is hereby imposed on
Deputy Sheriff Honesto G. Fabre, with a STERN WARNING
that a repetition of the same or of any act calling for
disciplinary action will be dealt with more severely.
SO ORDERED.

G.R. No. L-60038 March 18, 1985

SUMMIT
TRADING
AND
DEVELOPMENT
CORPORATION, petitioner,
vs.
JUDGE HERMINIO A. AVENDANO, Court of First
Instance of Laguna, Binan Branch I, SEGUNDO
PILIPINIA and EDGARDO MINDO, represented by
ERNESTO PILIPINIA, respondents.

AQUINO, J.:
This case is about the summons intended for defendant
Summit Trading and Development Corporation. As
background, it should be stated that Segundo Pilipinia
and Edgardo Mindo in 1973 acquired under Land
Authority Administrative Order No. 4 two registered lots
with a total area of 2 hectares located at Barrio San
Vicente, San Pedro, Laguna.
The titles of the lots contain the annotation that should
Pilipinia and Mindo sell the same, they have the right to
redeem the lots within five years from the date of the
sale (Exh. H and I).
Pilipinia and Mindo sold the lots for P16,000 and P12,000
to Gavino Ortega on February 14 and April 19, 1977.
They have retained possession of the lots which are
ricelands. They became tenants thereof.

In a letter dated October 16, 1979, Ortega advised

Ernesto Pilipinia (attorney-in-fact of Segundo and Mindo)
that he and his father would have the right of first refusal
in case the lots were sold (Exh. E and O).
Ortega resold the two lots on November 14, 1979 for
P16,000 and P11,000 to Summit Trading through its
president, Virgilio P. Balaguer (Exh. N and N-1).
On August 10, 1981, or within the five-year period,
Pilipinia and Mindo filed a complaint against Ortega and
Summit Trading for the redemption or repurchase of the
two lots. They deposited P100,000 with the Royal Savings
and Loan Association for that purpose.
Ortega was duly summoned. He failed to answer the
complaint. He was declared in default. Summit Trading
was also declared in default. In his judgment by default
dated October 29, 1981, Judge Avendano (the same
judge who ordered the cancellation of the annotation)
gave plaintiffs Pilipinia and Mindo 15 days from notice
within which to redeem the lots for P16,000 and P12,000
and
ordered
Summit
Trading
to
execute
the
corresponding deeds of sale and surrender the Torrens
titles. If it failed to do so, the clerk of court was directed
to perform that task. The register of deeds was ordered
to issue new titles to Pilipinia and Mindo.

36
Page

At the instance of Ortega, the said annotation was

cancelled by Judge Avendao in his order of September
24, 1979 ostensibly because the lots would be converted
into commercial, industrial or residential sites (Exh. M).
That conversion has not taken place. At present the two
lots are still ricelands.

president, manager, secretary, cashier,

agent, or any of its directors.
It is true that Saquilayan is not among the persons
mentioned in section 13. However, she, being under the
control of Summit Trading, has not explained what she
has done with the summons and complaint. The logical
assumption is that she delivered it to her boss, the
president of Summit Trading. As already stated, she
received a copy of the decision and Summit Trading
became aware of it. Summit Trading's motion for
reconsideration was denied.
While Summit Trading is technically correct in contending
that there was no strict compliance with section 13, we
cannot close our eyes to the realities of the situation.
Under the facts of this case, Saquilayan, being the
secretary of the president (whose contact with the
outside world is normally through his secretary), may be
regarded as an "agent" within the meaning of section 13.
(See Villa Rey Transit, Inc. vs. Far East Motor
Corporation, L-31339, January 31, 1978, 81 SCRA 298;
Filoil Marketing Corporation vs. Marine Development
Corporation of the Phil., L-29636, September 30, 1982,
117 SCRA 86.)
Hence summons was validly served upon Summit
Trading. Its negligence in not answering the complaint
was inexcusable. In fact, up to this time, Summit Trading
has not bothered to state its defenses to the action nor
stated whether it has a meritorious case warranting the
setting aside of the default judgment.

The default judgment was rendered on the assumption

that Summit Trading was duly summoned through Marina
Saquilayan as secretary of Summit Trading. She received
the summons on August 28, 1981. A copy of the
judgment was also served on her on November 13, 1981
(Exh. B, pp. 31-32, 64, Record).

The cases of Delta Motor Sales Corporation vs.

Mangosing, L-41667, April 30,1976, 70 SCRA 598 and
ATM Trucking Inc. vs. Buencamino, G.R. No. 62445,
August 31, 1983, 124 SCRA 434 are not in point because
the summons in the two cases was served upon mere
clerks or employees of the corporations who cannot be
relied upon to know what to do with the legal papers
served upon them.

Actually, Saquilayan received the summons as secretary

of Balaguer, already mentioned as the president of
Summit Trading which purchased the lots from Ortega.
Bonifacio Tiongson was the corporate secretary.

In the instant case, service was made on the president's

secretary who could have easily notified the president
that an action was filed against the corporation just as
she had apprised him of the judgment in this case.

Nineteen days after Saquilayan received a copy of the

decision,
Summit
Trading
filed
a
motion
for
reconsideration on the ground that the trial court did not
acquire jurisdiction over it because summons was not
served upon it in accordance with Rule 14 of the Rules of
Court which provides:

The instant petition for certiorari, treated as an appeal

under Republic Act No. 5440, was filed out of time.
Considered as a special civil action under Rule 65 of the
Rules of Court, it is baseless because the trial court had
acquired jurisdiction over Summit Trading. As already
shown, summons was properly served on the president's
secretary.

SEC.
13.
Service
upon
private
domestic corporation or partnership.-If
the
defendant
is
a
corporation
organized under the laws of the
Philippines or a partnership duly
registered, service may be made on the

We are not saying that service on such a secretary is

always proper. Generally, it is improper. The president
himself must be served personally with the summons if it
is desired to effect the service on that particular officer.
But, as already stated, under the facts of this case, the
president's secretary may be regarded as the "agent"

WHEREFORE, the petition is dismissed. The trial court's

judgment is affirmed. Its implementation is now in order.
The restraining order is dissolved. Costs against the
petitioner.

37
Page

within the meaning of section 13 since service upon her

of the judgment itself came to the notice of Summit
Trading.

G.R. No. 113394 December 12, 1995

PHILIPPINE COMMERCIAL INDUSTRIAL BANK (AND
ITS ASSIGNEE JAIME Y. GONZALES) petitioner,
vs.
HONORABLE COURT OR APPEALS and CHEMPHIL
EXPORT
AND
IMPORT
CORPORATION
(CEIC),respondents.

SO ORDERED.
KAPUNAN, J.:
Before us is a legal tug-of-war between the Chemphil
Export and Import Corporation (hereinafter referred to as
CEIC), on one side, and the PISO and Jaime Gonzales as
assignee of the Bank of the Philippine Islands (BPI), Rizal
Commercial Banking Corporation (RCBC), Land Bank of
the Philippines (LBP) and Philippine Commercial
International Bank (PCIB), on the other (hereinafter
referred to as the consortium), over 1,717,678 shares of
stock (hereinafter referred to as the "disputed shares") in
the
Chemical
Industries
of
the
Philippines
(Chemphil/CIP).
Our task is to determine who is the rightful owner of the
disputed shares.
Pursuant to our resolution dated 30 May 1994, the
instant case is a consolidation of two petitions for review
filed before us as follows:
In G.R. Nos. 112438-39, CEIC seeks the reversal of the
decision of the Court of Appeals (former Twelfth Division)
promulgated on 30 June 1993 and its resolution of 29
October
1993,
denying
petitioner's
motion
for
reconsideration in the consolidated cases entitled
"Dynetics, Inc., et al. v. PISO, et al." (CA-G.R. No.
20467) and "Dynetics, Inc., et al. v. PISO, et al.; CEIC,
Intervenor-Appellee" (CA-G.R. CV No. 26511).
The dispositive portion of the assailed decision reads,
thus:
WHEREFORE, this Court resolves in
these consolidated cases as follows:

G.R. Nos. 112438-39 December 12, 1995

CHEMPHIL EXPORT & IMPORT CORPORATION
(CEIC), petitioner,
vs.
THE HONORABLE COURT OF APPEALS JAIME Y.
GONZALES, as Assignee of the Bank of the
Philippine Islands (BPI), RIZAL COMMERCIAL
BANKING CORPORATION (RCBC), LAND BANK OF
THE PHILIPPINES (LBP), PHILIPPINE COMMERCIAL
&
INTERNATIONAL
BANK
(PCIB)
and
THE
PHILIPPINE INVESTMENT SYSTEM ORGANIZATION
(PISO), respondents.

1. The Orders of the Regional Trial

Court, dated March 25, 1988, and May
20, 1988, subject of CA-G.R. CV No.
10467, are SET ASIDE and judgment is
hereby rendered in favor of the
consortium
and
against
appellee
Dynetics, Inc., the amount of the
judgment, to be determined by
Regional Trial Court, taking into account
the value of assets that the consortium
may have already recovered and shall
have recovered in accordance with the
other portions of this decision.

No pronouncement as to costs.
SO ORDERED.

In G.R. No. 113394, PCIB and its assignee, Jaime

Gonzales, ask for the annulment of the Court of Appeals'
decision (former Special Ninth Division) promulgated on
26 March 1993 in "PCIB v. Hon. Job B. Madayag & CEIC"
(CA-G.R. SP NO. 20474) dismissing the petition
for certiorari, prohibition and mandamus filed by PCIB
and of said court's resolution dated 11 January 1994
denying their motion for reconsideration of its decision. 2
The antecedent facts leading to the aforementioned
controversies are as follows:
On September 25, 1984, Dynetics, Inc. and Antonio M.
Garcia filed a complaint for declaratory relief and/or
injunction against the PISO, BPI, LBP, PCIB and RCBC or
the consortium with the Regional Trial Court of Makati,
Branch 45 (Civil Case No. 8527), seeking judicial
declaration, construction and interpretation of the validity
of the surety agreement that Dynetics and Garcia had
entered into with the consortium and to perpetually
enjoin the latter from claiming, collecting and enforcing
any purported obligations which Dynetics and Garcia
might have undertaken in said agreement. 3
The consortium filed their respective answers with
counterclaims alleging that the surety agreement in
question was valid and binding and that Dynetics and
Garcia were liable under the terms of the said
agreement. It likewise applied for the issuance of a writ
of preliminary attachment against Dynetics and Garcia. 4
Seven months later, or on 23 April 1985, Dynetics,
Antonio Garcia and Matrix Management & Trading
Corporation filed a complaint for declaratory relief and/or
injunction against the Security Bank & Trust Co. (SBTC
case) before the Regional Trial Court of Makati, Branch
135 docketed as Civil Case No. 10398. 5
On 2 July 1985, the trial court granted SBTC's prayer for
the issuance of a writ of preliminary attachment and on 9
July 1985, a notice of garnishment covering Garcia's
shares in CIP/Chemphil (including the disputed shares)
was served on Chemphil through its then President. The
notice of garnishment was duly annotated in the stock
and transfer books of Chemphil on the same date. 6

38
Page

2. The Orders of the Regional Trial

Court dated December 19, 1989 and
March 5, 1990 are hereby REVERSED
and SET ASIDE and judgment is hereby
rendered confirming the ownership of
the consortium over the Chemphil
shares of stock, subject of CA-G.R. CV
No. 26511, and the Order dated
September 4, 1989, is reinstated.

On 6 September 1985, the writ of attachment in favor of

SBTC was lifted. However, the same was reinstated on 30
October 1985. 7
In the meantime, on 12 July 1985, the Regional Trial
Court in Civil Case No. 8527 (the consortium case)
denied the application of Dynetics and Garcia for
preliminary
injunction
and
instead
granted
the
consortium's prayer for a consolidated writ of preliminary
attachment. Hence, on 19 July 1985, after the
consortium had filed the required bond, a writ of
attachment was issued and various real and personal
properties of Dynetics and Garcia were garnished,
including the disputed shares. 8 This garnishment,
however, was not annotated in Chemphil's stock and
transfer book.
On 8 September 1987, PCIB filed a motion to dismiss the
complaint of Dynetics and Garcia for lack of interest to
prosecute and to submit its counterclaims for decision,
adopting the evidence it had adduced at the hearing of its
application for preliminary attachment. 9
On 25 March 1988, the Regional Trial Court dismissed the
complaint of Dynetics and Garcia in Civil Case No. 8527,
as well as the counterclaims of the consortium, thus:
Resolving
defendant's,
Philippine
Commercial
International
Bank,
MOTION TO DISMISS WITH MOTION TO
SUBMIT
DEFENDANT
PCIBANK's
COUNTERCLAIM FOR DECISION, dated
September 7, 1987:
(1) The motion to dismiss is granted;
and the instant case is hereby ordered
dismissed pursuant to Sec. 3, Rule 17
of the Revised Rules of Court, plaintiff
having failed to comply with the order
dated July 16, 1987, and having not
taken further steps to prosecute the
case; and
(2) The motion to submit said
defendant's counterclaim for decision is
denied; there is no need; said
counterclaim is likewise dismissed
under the authority of Dalman vs. City
Court of Dipolog City, L-63194, January
21, 1985, wherein the Supreme Court
stated that if the civil case is dismissed,
so also is the counterclaim filed therein.
"A person cannot eat his cake and have
it at the same time" (p. 645, record,
Vol. I). 10
The motions for reconsideration filed by the consortium
were, likewise, denied by the trial court in its order dated
20 May 1988:

WHEREFORE , the order issued on

March 25, 1988, is hereby modified in
the sense that the dismissal of the
complaint
as
well
as
of
the
counterclaims of defendants RCBC, LBP,
PCIB and BPI shall be considered as
without prejudice (p. 675, record, Vol.
I). 11
Unsatisfied
with
the
aforementioned
order, the
consortium appealed to the Court of Appeals, docketed as
CA-G.R. CV No. 20467.
On 17 January 1989 during the pendency of consortium's
appeal in CA-G.R. CV No. 20467, Antonio Garcia and the
consortium entered into a Compromise Agreement which
the Court of Appeals approved on 22 May 1989 and
became the basis of its judgment by compromise.
Antonio Garcia was dropped as a party to the appeal
leaving the consortium to proceed solely against
Dynetics, Inc. 12 On 27 June 1989, entry of judgment was
made by the Clerk of Court. 13
Hereunder quoted are the salient portions of said
compromise agreement:

39
Page

The Court could have stood pat on its

order dated 25 March 1988, in regard
to
which
the
defendants-banks
concerned
filed
motions
for
reconsideration. However, inasmuch as
plaintiffs commented on said motions
that: "3). In any event, so as not to
unduly foreclose on the rights of the
respective
parties
to
refile
and
prosecute their respective causes of
action,
plaintiffs
manifest
their
conformity to the modification of this
Honorable Court's order to indicate that
the dismissal of the complaint and the
counterclaims is without prejudice." (p.
2, plaintiffs' COMMENT etc. dated May
20, 1988). The Court is inclined to so
modify the said order.

4. Plaintiff Antonio M. Garcia and herein

defendants have no further claims
against each other.
5. This Compromise shall be without
prejudice to such claims as the parties
herein may have against plaintiff
Dynetics, Inc.
6. Plaintiff Antonio M. Garcia shall have
two (2) months from date of this
Compromise within which to work for
the entry and participation of his other
creditor, Security Bank and Trust Co.,
into this Compromise. Upon the
expiration of this period, without
Security Bank and Trust Co. having
joined, this Compromise shall be
submitted to the Court for its
information and approval (pp. 27, 2831, rollo, CA-G.R. CV No. 10467). 14
It appears that on 15 July 1988, Antonio Garcia under a
Deed of Sale transferred to Ferro Chemicals, Inc. (FCI)
the
disputed
shares
and
other properties
for
P79,207,331.28. It was agreed upon that part of the
purchase price shall be paid by FCI directly to SBTC for
whatever judgment credits that may be adjudged in the
latter's favor and against Antonio Garcia in the
aforementioned SBTC case. 15
On 6 March 1989, FCI, through its President Antonio M.
Garcia, issued a Bank of America Check No. 860114 in
favor of SBTC in the amount of P35,462,869.62. 16 SBTC
refused to accept the check claiming that the amount was
not sufficient to discharge the debt. The check was thus
consigned by Antonio Garcia and Dynetics with the
Regional Trial Court as payment of their judgment debt in
the SBTC case. 17
On 26 June 1989, FCI assigned its 4,119,614 shares in
Chemphil, which included the disputed shares, to
petitioner CEIC. The shares were registered and recorded
in the corporate books of Chemphil in CEIC's name and
the corresponding stock certificates were issued to it. 18

xxx xxx xxx

3. Defendants, in consideration of
avoiding an extended litigation, having
agreed to limit their claim against
plaintiff Antonio M. Garcia to a principal
sum of P145 Million immediately
demandable and to waive all other
claims to interest, penalties, attorney's
fees and other charges. The aforesaid
compromise amount of indebtedness of
P145 Million shall earn interest of
eighteen percent (18%) from the date
of this Compromise.

Meanwhile, Antonio Garcia, in the consortium case, failed

to comply with the terms of the compromise agreement
he entered into with the consortium on 17 January 1989.
As a result, on 18 July 1989, the consortium filed a
motion for execution which was granted by the trial court
on 11 August 1989. Among Garcia's properties that were
levied upon on execution were his 1,717,678 shares in
Chemphil (the disputed shares) previously garnished on
19 July 1985. 19
On 22 August 1989, the consortium acquired the
disputed shares of stock at the public auction sale
conducted by the sheriff for P85,000,000.00. 20 On same
day, a Certificate of Sale covering the disputed shares
was issued to it.

For being legally proper, defendant's

MOTION TO ORDER THE CORPORATE
SECRETARY OF CHEMICAL INDUSTRIES
OF THE PHILS., INC. (CHEMPIL) TO
ENTER IN THE STOCK AND TRANSFER
BOOKS OF CHEMPHIL THE SHERIFF'S
CERTIFICATE OF SALE DATED AUGUST
22, 1989 AND TO ISSUE NEW
CERTIFICATES OF STOCK IN THE NAME
OF THE DEFENDANT BANKS, dated
August 29, 1989, is hereby granted.
WHEREFORE, the corporate secretary of
the aforesaid corporation, or whoever is
acting for and in his behalf, is hereby
ordered to (1) record and/or register
the Certificate of Sale dated August 22,
1989 issued by Deputy Sheriff Cristobal
S. Jabson of this Court; (2) to cancel
the certificates of stock of plaintiff
Antonio M. Garcia and all those which
may have subsequently been issued in
replacement and/or in substitution
thereof; and (3) to issue in lieu of the
said shares new shares of stock in the
name of the defendant Banks, namely,
PCIB, BPI, RCBC, LBP and PISO bank in
such proportion as their respective
claims would appear in this suit (p. 82,
record, Vol. II). 22
On 26 September 1989, CEIC filed a motion to intervene
(dated 25 September 1989) in the consortium case
seeking the recall of the abovementioned order on
grounds that it is the rightful owner of the disputed
shares. 23 It further alleged that the disputed shares were
previously owned by Antonio M. Garcia but subsequently
sold by him on 15 July 1988 to Ferro Chemicals, Inc.
(FCI) which in turn assigned the same to CEIC in an
agreement dated 26 June 1989.

40
Page

On 30 August 1989, 21 the consortium filed a motion

(dated 29 August 1989) to order the corporate secretary
of Chemphil to enter in its stock and transfer books the
sheriff's certificate of sale dated 22 August 1989, and to
issue new certificates of stock in the name of the banks
concerned. The trial court granted said motion in its order
dated 4 September 1989, thus:

considering that said shares of stock were garnished in

the consortium's favor as early as 19 July 1985. 25
On 4 October 1989, the consortium filed their opposition
to CEIC's motion to set aside the 4 September 1989
order and moved to lift the 27 September 1989 order. 26
On 12 October 1989, the consortium filed a manifestation
and motion to lift the 27 September 1989 order, to
reinstate the 4 September 1989 order and to direct CEIC
to surrender the disputed stock certificates of Chemphil
in its possession within twenty-four (24) hours, failing in
which the President, Corporate Secretary and stock and
transfer agent of Chemphil be directed to register the
names of the banks making up the consortium as owners
of said shares, sign the new certificates of stocks
evidencing their ownership over said shares and to
immediately deliver the stock certificates to them. 27
Resolving the foregoing motions, the trial court rendered
an order dated 19 December 1989, the dispositive
portion of which reads as follows:
WHEREFORE, premises considered, the
Urgent Motion dated September 25,
1989 filed by CEIC is hereby GRANTED.
Accordingly, the Order of September 4,
1989, is hereby SET ASIDE, and any
and all acts of the Corporate Secretary
of CHEMPHIL and/or whoever is acting
for and in his behalf, as may have
already been done, carried out or
implemented pursuant to the Order of
September 4, 1989, are hereby
nullified.
PERFORCE, the CONSORTIUM'S Motions
dated October 3, 1989 and October 11,
1989, are both hereby denied for lack
of merit.
The Cease and Desist Order dated
September 27, 1989, is hereby
AFFIRMED and made PERMANENT.
SO ORDERED. 28
In so ruling, the trial court ratiocinated in this wise:

On 27 September 1989, the trial court granted CEIC's

motion allowing it to intervene, but limited only to the
incidents covered by the order dated 4 September 1989.
In the same order, the trial court directed Chemphil's
corporate secretary to temporarily refrain from
implementing
the
4
September
1989
order. 24
On 2 October 1989, the consortium filed their opposition
to CEIC's motion for intervention alleging that their
attachment lien over the disputed shares of stocks must
prevail over the private sale in favor of the CEIC

xxx xxx xxx

After
careful
and
assiduous
consideration
of
the
facts
and
applicable law and jurisprudence, the
Court holds that CEIC's Urgent Motion
to Set Aside the Order of September 4,
1989 is impressed with merit. The
CONSORTIUM has admitted that the
writ of attachment/garnishment issued
on July 19, 1985 on the shares of stock

The Court holds that a levy on the

shares of corporate stock to be valid
and binding on third persons, the notice
of attachment or garnishment must be
registered and annotated in the stock
and transfer books of the corporation,
more so when the shares of the
corporation are listed and traded in the
stock exchange, as in this case. As a
matter of fact, in the CONSORTIUM's
motion of August 30, 1989, they
specifically
move
to
"order
the
Corporate Secretary of CHEMPHIL
to enter in the stock and transfer books
of CHEMPHIL the Sheriff's Certificate of
Sale dated August 22, 1989." This goes
to show that, contrary to
the
arguments of the CONSORTIUM, in
order that attachment, garnishment
and/or encumbrances affecting rights
and ownership on shares of a
corporation to be valid and binding, the

41
Page

belonging to plaintiff Antonio M. Garcia

was not annotated and registered in the
stock and transfer books of CHEMPHIL.
On
the
other
hand,
the
prior
attachment issued in favor of SBTC on
July 2, 1985 by Branch 135 of this
Court in Civil Case No. 10398, against
the same CHEMPHIL shares of Antonio
M. Garcia, was duly registered and
annotated in the stock and transfer
books of CHEMPHIL. The matter of nonrecording
of
the
Consortium's
attachment in Chemphil's stock and
transfer book on the shares of Antonio
M.
Garcia
assumes
significance
considering CEIC's position that FCI and
later CEIC acquired the CHEMPHIL
shares of Antonio M. Garcia without
knowledge of the attachment of the
CONSORTIUM. This is also important as
CEIC
claims
that
it
has
been
subrogated to the rights of SBTC since
CEIC's predecessor-in-interest, the FCI,
had paid SBTC the amount of
P35,462,869.12 pursuant to the Deed
of Sale and Purchase of Shares of Stock
executed by Antonio M. Garcia on July
15, 1988. By reason of such payment,
sale with the knowledge and consent of
Antonio M. Garcia, FCI and CEIC, as
party-in-interest to FCI, are subrogated
by operation of law to the rights of
SBTC. The Court is not unaware of the
citation in CEIC's reply that "as
between two (2) attaching creditors,
the one whose claims was first
registered on the books of the
corporation enjoy priority." (Samahang
Magsasaka, Inc. vs. Chua Gan, 96 Phil.
974.)

same has to be recorded in the stock

and transfer books.
Since neither CEIC nor FCI had notice
of the CONSORTIUM's attachment of
July 19, 1985, CEIC's shares of stock in
CHEMPHIL,
legally
acquired
from
Antonio M. Garcia, cannot be levied
upon in execution to satisfy his
judgment debts. At the time of the
Sheriff's levy on execution, Antonio M.
Garcia has no more in CHEMPHIL which
could be levied upon. 29
xxx xxx xxx
On 23 January 1990, the consortium and PCIB filed
separate motions for reconsideration of the aforestated
order
which
were
opposed
by
petitioner
CEIC. 30
On 5 March 1990, the trial court denied the motions for
reconsideration. 31
On 16 March 1990, the consortium appealed to the Court
of Appeals (CA-G.R. No. 26511). In its Resolution dated 9
August 1990, the Court of Appeals consolidated CA-G.R.
No. 26511 with CA-G.R. No. 20467. 32
The issues raised in the two cases, as formulated by the
Court of Appeals, are as follows:
I
WHETHER OR NOT, UNDER THE
PECULIAR CIRCUMSTANCES OF THE
CASE, THE TRIAL COURT ERRED IN
DISMISSING THE COUNTERCLAIMS OF
THE CONSORTIUM IN CIVIL CASE NO.
8527;
II
WHETHER OR NOT THE DISMISSAL OF
CIVIL CASE NO. 8527 RESULTED IN
THE DISCHARGE OF THE WRIT OF
ATTACHMENT ISSUED THEREIN EVEN
AS THE CONSORTIUM APPEALED THE
ORDER DISMISSING CIVIL CASE NO.
8527;
III
WHETHER OR NOT THE JUDGMENT
BASED ON COMPROMISE RENDERED
BY THIS COURT ON MAY 22, 1989 HAD
THE EFFECT OF DISCHARGING THE
ATTACHMENTS ISSUED IN CIVIL CASE
NO. 8527;

V
WHETHER OR NOT FERRO CHEMICALS,
INC. (FCI), AND ITS SUCCESSOR-ININTEREST, CEIC, WERE SUBROGATED
TO THE RIGHTS OF SECURITY BANK &
TRUST
COMPANY
(SBTC)
IN
A
SEPARATE CIVIL ACTION. (This issue
appears to be material as SBTC is
alleged to have obtained an earlier
attachment over the same Chemphil
shares that the consortium seeks to
recover in the case at bar). 33
On 6 April 1990, the PCIB separately filed with the Court
of
Appeals
a
petition
for certiorari,
prohibition
andmandamus with a prayer for the issuance of a writ of
preliminary injunction (CA-G.R. No. SP-20474), likewise,
assailing the very same orders dated 19 December 1989
and 5 March 1990, subject of CA-G.R. No. 26511. 34
On 30 June 1993, the Court of Appeals (Twelfth Division)
in CA-G.R. No. 26511 and CA-G.R. No. 20467 rendered a
decision reversing the orders of the trial court and
confirming the ownership of the consortium over the
disputed shares. CEIC's motion for reconsideration was
denied on 29 October 1993. 35
In ruling for the consortium, the Court of Appeals made
the following ratiocination: 36
On the first issue, it ruled that the
evidence offered by the consortium in
support of its counterclaims, coupled
with the failure of Dynetics and Garcia
to prosecute their case, was sufficient
basis for the RTC to pass upon and
determine
the
consortium's
counterclaims.
The Court of Appeals found no
application for the ruling in Dalman
v. City Court of Dipolog, 134 SCRA 243
(1985) that "a person cannot eat his
cake and have it at the same time. If
the civil case is dismissed, so also is the
counterclaim filed therein" because the
factual background of the present
action is different. In the instant case,
both Dynetics and Garcia and the
consortium presented testimonial and
documentary evidence which clearly

42

WHETHER OR NOT THE ATTACHMENT

OF SHARES OF STOCK, IN ORDER TO
BIND THIRD PERSONS, MUST BE
RECORDED IN THE STOCK AND
TRANSFER
BOOK
OF
THE
CORPORATION; AND

Page

IV

should have supported a judgment on

the merits in favor of the consortium.
As the consortium correctly argued, the
net atrocious effect of the Regional Trial
Court's ruling is that it allows a
situation where a party litigant is forced
to
plead
and
prove
compulsory
counterclaims only to be denied those
counterclaims on account of the
adverse party's failure to prosecute his
case. Verily, the consortium had no
alternative
but
to
present
its
counterclaims in Civil Case No. 8527
since its counterclaims are compulsory
in nature.
On the second issue, the Court of
Appeals opined that unless a writ of
attachment is lifted by a special order
specifically providing for the discharge
thereof, or unless a case has been
finally dismissed against the party in
whose favor the attachment has been
issued, the attachment lien subsists.
When the consortium, therefore, took
an appeal from the Regional Trial
Court's orders of March 25, 1988 and
May 20, 1988, such appeal had the
effect of preserving the consortium's
attachment liens secured at the
inception of Civil Case No. 8527,
invoking the rule in Olib v. Pastoral,188
SCRA 692 (1988) that where the main
action is appealed, the attachment
issued in the said main case is also
considered appealed.
Anent the third issue, the compromise
agreement between the consortium and
Garcia dated 17 January 1989 did not
result in the abandonment of its
attachment lien over his properties.
Said agreement was approved by the
Court of Appeals in a Resolution dated
22 May 1989. The judgment based on
the compromise agreement had the
effect of preserving the said attachment
lien as security for the satisfaction of
said judgment (citing BF Homes, Inc. v.
CA, 190 SCRA 262, [1990]).
As to the fourth issue, the Court of
Appeals agreed with the consortium's
position that the attachment of shares
of stock in a corporation need not be
recorded in the corporation's stock and
transfer book in order to bind third
persons.
Section 7(d), Rule 57 of the Rules of
Court was complied with by the
consortium (through the Sheriff of the

Therefore, ruled the Court of Appeals,

the
attachment
made
over
the
Chemphil shares in the name of Garcia
on July 19, 1985 was made in
accordance with law and the lien
created thereby remained valid and
subsisting at the time Garcia sold those
shares to FCI (predecessor-in-interest
of appellee CEIC) in 1988.
Anent the last issue, the Court of
Appeals rejected CEIC's subrogation
theory based on Art. 1302 (2) of the
New Civil Code stating that the
obligation to SBTC was paid by Garcia
himself and not by a third party (FCI).
The Court of Appeals further opined
that while the check used to pay SBTC
was a FCI corporate check, it was funds
of Garcia in FCI that was used to pay
off SBTC. That the funds used to pay off
SBTC were funds of Garcia has not
been refuted by FCI or CEIC. It is clear,
therefore, that there was an attempt on
the part of Garcia to use FCI and CEIC
as convenient vehicles to deny the
consortium its right to make itself
whole through an execution sale of the
Chemphil shares attached by the
consortium at the inception of Civil
Case No. 8527. The consortium,
therefore, is entitled to the issuance of
the Chemphil shares of stock in its
favor. The Regional Trial Court's order
of
September
4,
1989,
should,
therefore, be reinstated in toto.
Accordingly, the question of whether or
not the attachment lien in favor of
SBTC in the SBTC case is superior to

43
Page

trial court) when the notice of

garnishment over the Chemphil shares
of Garcia was served on the president
of Chemphil on July 19, 1985. Indeed,
to bind third persons, no law requires
that an attachment of shares of stock
be recorded in the stock and transfer
book of a corporation. The statement
attributed by the Regional Trial Court to
the
Supreme
Court
in Samahang
Magsasaka,
Inc.vs. Gonzalo
Chua
Guan, G.R. No. L-7252, February 25,
1955 (unreported), to the effect that
"as between two attaching creditors,
the one whose claim was registered
first on the books of the corporation
enjoys priority," is an obiter dictum that
does not modify the procedure laid
down in Section 7(d), Rule 57 of the
Rules of Court.

the attachment lien in favor of the

consortium in Civil Case No. 8527
becomes immaterial with respect to the
right of intervenor-appellee CEIC. The
said issue would have been relevant
had CEIC established its subrogation to
the rights of SBTC.
On 26 March 1993, the Court of Appeals (Special Ninth
Division) in CA-G.R. No. SP 20474 rendered a decision
denying due course to and dismissing PCIB's petition
for certiorari on grounds that PCIB violated the rule
against forum-shopping and that no grave abuse of
discretion was committed by respondent Regional Trial
Court in issuing its assailed orders dated 19 December
1989 and 5 March 1990. PCIB's motion for
reconsideration was denied on 11 January 1994. 37
On 7 July 1993, the consortium, with the exception of
PISO, assigned without recourse all its rights and
interests in the disputed shares to Jaime Gonzales. 38
On 3 January 1994, CEIC filed the instant petition for
review docketed as G.R. Nos. 112438-39 and assigned
the following errors:
I.
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN SETTING ASIDE
AND REVERSING THE ORDERS OF THE
REGIONAL
TRIAL
COURT
DATED
DECEMBER 5, 1989 AND MARCH 5,
1990 AND IN NOT CONFIRMING
PETITIONER'S OWNERSHIP OVER THE
DISPUTED
CHEMPHIL
SHARES
AGAINST
THE
FRIVOLOUS
AND
UNFOUNDED
CLAIMS
OF
THE
CONSORTIUM.
II.
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED:
(1) In not holding
that the Consortium's
attachment over the
disputed
Chemphil
shares did not vest
any priority right in
its favor and cannot
bind
third
parties
since admittedly its
attachment
on
19
July 1985 was not
recorded in the stock
and transfer books of
Chemphil,
and
subordinate to the
attachment of SBTC

(2) In not applying

the
case
law
enunciated by this
Honorable
Supreme
Court
inSamahang
Magsasaka,
Inc. vs. Gonzalo Chua
Guan, 96 Phil. 974
that as between two
attaching
creditors,
the one whose claim
was registered first in
the books of the
corporation
enjoys
priority, and which
respondent
Court
erroneously
characterized
as
mere obiter dictum;
(3) In not holding
that the dismissal of
the appeal of the
Consortium from the
order of the trial court
dismissing
its
counterclaim against
Antonio M. Garcia and
the finality of the
compromise
agreement
which
ended the litigation
between
the
Consortium
and
Antonio M. Garcia in
the Dynetics
case had ipso jure dis
charged
the
Consortium's

purported attachment
over
the
disputed
shares.

44
Page

which
SBTC
registered
and
annotated
in
the
stock and transfer
books of Chemphil on
2 July 1985, and that
the
Consortium's
attachment failed to
comply
with
Sec.
7(d), Rule 57 of the
Rules as evidenced by
the
notice
of
garnishment of the
deputy sheriff of the
trial court dated 19
July 1985 (annex "D")
which
the
sheriff
served on a certain
Thelly Ruiz who was
neither President nor
managing agent of
Chemphil;

III.
THE RESPONDENT COURT OF APPEALS
GRAVELY ERRED IN NOT HOLDING
THAT CEIC HAD BEEN SUBROGATED TO
THE RIGHTS OF SBTC SINCE CEIC'S
PREDECESSOR IN INTEREST HAD PAID
SBTC PURSUANT TO THE DEED OF
SALE AND PURCHASE OF STOCK
EXECUTED BY ANTONIO M. GARCIA ON
JULY 15, 1988, AND THAT BY REASON
OF
SUCH
PAYMENT,
WITH
THE
CONSENT
AND
KNOWLEDGE
OF
ANTONIO M. GARCIA, FCI AND CEIC,
AS PARTY IN INTEREST TO FCI, WERE
SUBROGATED BY OPERATION OF LAW
TO THE RIGHTS OF SBTC.
IV.
THE RESPONDENT COURT OF APPEALS
GRAVELY
ERRED
AND
MADE
UNWARRANTED
INFERENCES
AND
CONCLUSIONS,
WITHOUT
ANY
SUPPORTING EVIDENCE, THAT THERE
WAS AN ATTEMPT ON THE PART OF
ANTONIO M. GARCIA TO USE FCI AND
CEIC AS CONVENIENT VEHICLES TO
DENY THE CONSORTIUM ITS RIGHTS
TO MAKE ITSELF WHOLE THROUGH AN
EXECUTION OF THE CHEMPHIL SHARES
PURPORTEDLY ATTACHED BY THE
CONSORTIUM ON 19 JULY 1985. 39
On 2 March 1994, PCIB filed its own petition for review
docketed as G.R. No. 113394 wherein it raised the
following issues:
I. RESPONDENT COURT OF APPEALS
COMMITTED
SERIOUS
ERROR
IN
RENDERING
THE
DECISION
AND
RESOLUTION IN QUESTION (ANNEXES
A AND B) IN DEFIANCE OF LAW AND
JURISPRUDENCE
BY
FINDING
RESPONDENT CEIC AS HAVING BEEN
SUBROGATED TO THE RIGHTS OF SBTC
BY THE PAYMENT BY FCI OF GARCIA'S
DEBTS TO THE LATTER DESPITE THE
FACT THAT
A. FCI PAID THE SBTC
DEBT BY VIRTUE OF A
CONTRACT BETWEEN
FCI
AND
GARCIA,
THUS,
LEGAL
SUBROGATION DOES
NOT ARISE;

C. FCI DID NOT

ACQUIRE ANY RIGHT
OVER THE DISPUTED
SHARES
AS
SBTC
HAD NOT YET LEVIED
UPON NOR BOUGHT
THOSE SHARES ON
EXECUTION.
ACCORDINGLY, WHAT
FCI ACQUIRED FROM
SBTC WAS SIMPLY A
JUDGMENT
CREDIT
AND AN ATTACHMENT
LIEN TO SECURE ITS
SATISFACTION.
II. RESPONDENT COURT OF APPEALS
COMMITTED
SERIOUS
ERROR
IN
SUSTAINING THE ORDERS OF THE
TRIAL COURT DATED DECEMBER 19,
1989 AND MARCH 5, 1990 WHICH
DENIED PETITIONER'S OWNERSHIP
OVER
THE
DISPUTED
SHARES
NOTWITHSTANDING PROVISIONS OF
LAW AND EXTANT JURISPRUDENCE ON
THE MATTER THAT PETITIONER AND
THE CONSORTIUM HAVE PREFERRED
SENIOR RIGHTS THEREOVER.
III. RESPONDENT COURT OF APPEAL
COMMITTED
SERIOUS
ERROR
IN
CONCLUDING THAT THE DISMISSAL OF
THE
COMPLAINT
AND
THE
COUNTERCLAIM IN CIVIL CASE NO.
8527
ALSO
RESULTED
IN
THE
DISCHARGE
OF
THE
WRIT
OF
ATTACHMENT DESPITE THE RULINGS
OF THIS HONORABLE COURT IN BF
HOMES VS. COURT OF APPEALS, G.R.
NOS. 76879 AND 77143, OCTOBER 3,
1990, 190 SCRA 262, AND IN OLIB
VS. PASTORAL,
G.R.
NO.
81120,
AUGUST 20, 1990, 188 SCRA 692 TO
THE CONTRARY.
IV. RESPONDENT COURT OF APPEALS
EXCEEDED ITS JURISDICTION IN
RULING ON THE MERITS OF THE MAIN
CASE NOTWITHSTANDING THAT THOSE
MATTERS WERE NOT ON APPEAL
BEFORE IT.
V. RESPONDENT COURT OF APPEALS
COMMITTED
SERIOUS
ERROR
IN

45
Page

B. THE SBTC DEBT

WAS PAID BY GARCIA
HIMSELF AND NOT BY
FCI,
HENCE,
SUBROGATION
BY
PAYMENT COULD NOT
HAVE OCCURRED;

HOLDING THAT PETITIONER IS GUILTY

OF FORUM SHOPPING DESPITE THE
FACT THAT SC CIRCULAR NO. 28-91
WAS NOT YET IN FORCE AND EFFECT
AT THE TIME THE PETITION WAS FILED
BEFORE
RESPONDENT
APPELLATE
COURT, AND THAT ITS COUNSEL AT
THAT TIME HAD ADEQUATE BASIS TO
BELIEVE THAT CERTIORARI AND NOT
AN APPEAL OF THE TRIAL COURT'S
ORDERS
WAS
THE
APPROPRIATE
RELIEF. 40
As previously stated, the issue boils down to who is
legally entitled to the disputed shares of Chemphil. We
shall resolve this controversy by examining the validity of
the claims of each party and, thus, determine whose
claim has priority.
CEIC's claim
CEIC traces its claim over the disputed shares to the
attachment lien obtained by SBTC on 2 July 1985 against
Antonio Garcia in Civil Case No. 10398. It avers that
when FCI, CEIC's predecessor-in-interest, paid SBTC the
due obligations of Garcia to the said bank pursuant to the
Deed of Absolute Sale and Purchase of Shares of
Stock, 41 FCI, and later CEIC, was subrogated to the
rights of SBTC, particularly to the latter's aforementioned
attachment lien over the disputed shares.
CEIC argues that SBTC's attachment lien is superior as it
was obtained on 2 July 1985, ahead of the consortium's
purported attachment on 19 July 1985. More importantly,
said CEIC lien was duly recorded in the stock and transfer
books of Chemphil.
CEIC's subrogation theory is unavailing.
By definition, subrogation is "the transfer of all the rights
of the creditor to a third person, who substitutes him in
all his rights. It may either be legal or conventional. Legal
subrogation is that which takes place without agreement
but by operation of law because of certain acts; this is
the subrogation referred to in article 1302. Conventional
subrogation is that which takes place by agreement of
the parties . . ." 42
CEIC's theory is premised on Art. 1302 (2) of the Civil
Code which states:
Art. 1302. It is presumed that there is
legal subrogation:
(1) When a creditor pays another
creditor who is preferred, even without
the debtor's knowledge;

(3) When, even without the knowledge

of the debtor, a person interested in the
fulfillment of the obligation pays,
without prejudice to the effects of
confusion as to the latter's share.
(Emphasis ours.)
Despite, however, its multitudinous arguments, CEIC
presents an erroneous interpretation of the concept of
subrogation. An analysis of the situations involved would
reveal the clear inapplicability of Art. 1302 (2).
Antonio Garcia sold the disputed shares to FCI for a
consideration of P79,207,331.28. FCI, however, did not
pay the entire amount to Garcia as it was obligated to
deliver part of the purchase price directly to SBTC
pursuant to the following stipulation in the Deed of Sale:
Manner of Payment
Payment of the Purchase Price shall be
made in accordance with the following
order of preferenceprovided that in no
instance shall the total amount paid by
the Buyer exceed the Purchase Price:
a. Buyer shall pay directly to the
Security Bank and Trust Co. the
amount determined by the Supreme
Court as due and owing in favor of the
said bank by the Seller.
The foregoing amount shall be paid
within fifteen (15) days from the date
the decision of the Supreme Court in
the case entitled "Antonio M. Garcia, et
al. vs. Court of Appeals, et al." G.R.
Nos. 82282-83 becomes final and
executory. 43 (Emphasis ours.)
Hence, when FCI issued the BA check to SBTC in the
amount of P35,462,869.62 to pay Garcia's indebtedness
to the said bank, it was in effect paying with Garcia's
money, no longer with its own, because said amount was
part of the purchase price which FCI owed Garcia in
payment for the sale of the disputed shares by the latter
to the former. The money "paid" by FCI to SBTC, thus
properly belonged to Garcia. It is as if Garcia himself paid
his own debt to SBTC but through a third party FCI.
It is, therefore, of no consequence that what was used to
pay SBTC was a corporate check of FCI. As we have
earlier stated, said check no longer represented FCI
funds but Garcia's money, being as it was part of FCI's
payment for the acquisition of the disputed shares. The
FCI check should not be taken at face value, the
attendant circumstances must also be considered.

46
Page

(2) When a third person, not interested

in the obligation, pays with the express
or tacit approval of the debtor;

The aforequoted contractual stipulation in the Deed of

Sale dated 15 July 1988 between Antonio Garcia and FCI
is nothing more but an arrangement for the sake of
convenience. Payment was to be effected in the aforesaid
manner so as to prevent money from changing hands
needlessly. Besides, the very purpose of Garcia in selling
the disputed shares and his other properties was to
"settle certain civil suits filed against him." 44
Since the money used to discharge Garcia's debt
rightfully belonged to him, FCI cannot be considered a
third party payor under Art. 1302 (2). It was but a
conduit, or as aptly categorized by respondents, merely
an agent as defined in Art. 1868 of the Civil Code:
Art. 1868. By the contract of agency a
person binds himself to render some
service or to do something in
representation or on behalf of another,
with the consent or authority of the
latter.
FCI was merely fulfilling its
aforementioned Deed of Sale.

obligation

under

the

Additionally, FCI is not a disinterested party as required

by Art. 1302 (2) since the benefits of the extinguishment
of the obligation would redound to none other but
itself. 45 Payment of the judgment debt to SBTC resulted
in the discharge of the attachment lien on the disputed
shares purchased by FCI. The latter would then have a
free and "clean" title to said shares.
In sum, CEIC, for its failure to fulfill the requirements of
Art. 1302 (2), was not subrogated to the rights of SBTC
against Antonio Garcia and did not acquire SBTC's
attachment lien over the disputed shares which, in turn,
had already been lifted or discharged upon satisfaction by
Garcia, through FCI, of his debt to the said bank. 46
The rule laid down in the case of Samahang Magsasaka,
Inc. v. Chua Guan, 47 that as between two attaching
creditors the one whose claim was registered ahead on
the books of the corporation enjoys priority, clearly has
no application in the case at bench. As we have amply
discussed, since CEIC was not subrogated to SBTC's right
as attaching creditor, which right in turn, had already
terminated after Garcia paid his debt to SBTC, it cannot,
therefore, be categorized as an attaching creditor in the
present controversy. CEIC cannot resurrect and claim a
right which no longer exists. The issue in the instant
case, then, is priority between an attaching creditor (the
consortium) and a purchaser (FCI/CEIC) of the disputed
shares of stock and not between two attaching creditors
the subject matter of the aforestated Samahang
Magsasaka case.
CEIC, likewise, argues that the consortium's attachment
lien over the disputed Chemphil shares is null and void
and not binding on third parties due to the latter's failure
to register said lien in the stock and transfer books of

The attachment lien acquired by the consortium is valid

and effective. Both the Revised Rules of Court and the
Corporation Code do not require annotation in the
corporation's stock and transfer books for the attachment
of shares of stock to be valid and binding on the
corporation and third party.
Section 74 of the Corporation Code which enumerates the
instances where registration in the stock and transfer
books of a corporation provides:
Sec. 74. Books to be
transfer agent.

kept; stock

xxx xxx xxx

Stock corporations must also keep a
book to be known as the stock and
transfer book, in which must be kept a
record of all stocks in the names of the
stockholders alphabetically arranged;
the installments paid and unpaid on all
stock for which subscription has been
made, and the date of payment of any
settlement; a
statement
of every
alienation, sale or transfer of stock
made, the date thereof, and by and to
whom made; and such other entries as
the by-laws may prescribe. The stock
and transfer book shall be kept in the
principal office of the corporation or in
the office of its stock transfer agent and
shall be open for inspection by any
director
or
stockholder
of
the
corporation at reasonable hours on
business days. (Emphasis ours.)
xxx xxx xxx
Section 63 of the same Code states:
Sec. 63. Certificate of stock and
transfer of shares. The capital stock
of stock corporations shall be divided
into shares for which certificates signed
by the president or vice-president,
countersigned by the secretary or
assistant secretary, and sealed with the
seal of the corporation shall be issued
in accordance with the by-laws. Shares
of stock so issued are personal
property and may be transferred by
delivery of the certificate or certificates
indorsed by the owner or his attorneyin-fact
or
other
person
legally
authorized to make the transfer. No
transfer, however, shall be valid,
except as between the parties, until the

47

down by

Page

Chemphil as mandated by the rule laid

the Samahang Magsasaka v. Chua Guan. 48

transfer is recorded in the books of the

corporation so as to show the names of
the parties to the transaction, the date
of the transfer, the number of the
certificate or certificates and the
number of shares transferred.
No shares of stock against which the
corporation holds any unpaid claim
shall be transferable in the books of the
corporation. (Emphasis ours.)
Are attachments of shares of stock included in the term
"transfer" as provided in Sec. 63 of the Corporation
Code? We rule in the negative. As succinctly declared in
the case of Monserrat v. Ceron, 49 "chattel mortgage over
shares of stock need not be registered in the
corporation's stock and transfer book inasmuch as chattel
mortgage over shares of stock does not involve a
"transfer of shares," and that only absolute transfers of
shares of stock are required to be recorded in the
corporation's stock and transfer book in order to have
"force and effect as against third persons."
xxx xxx xxx
The word "transferencia" (transfer) is
defined by the "Diccionario de la
Academia de la Lengua Castellana" as
"accion y efecto de transfeir" (the act
and effect of transferring); and the verb
"transferir", as "ceder or renunciar en
otro el derecho o dominio que se tiene
sobre una cosa, haciendole dueno de
ella" (to assign or waive the right in, or
absolute ownership of, a thing in favor
of another, making him the owner
thereof).
In the Law Dictionary of "Words and
Phrases", third series, volume 7, p.
5867, the word "transfer" is defined as
follows:
"Transfer" means any
act by which property
of one person is
vested in another, and
"transfer of shares",
as used in Uniform
Stock Transfer Act
(Comp.
St.
Supp.
690),
implies
any
means whereby one
may be divested of
and another acquire
ownership of stock.
(Wallach vs. Stein
[N.J.], 136 A., 209,
210.)

A "transfer" is the act

by which the owner of
a thing delivers it to
another
with
the
intent of passing the
rights which he has in
it to the latter, and a
chattel mortgage is
not
within
the
meaning
of
such
term.
xxx xxx xxx. 50
Although the Monserrat case refers to a chattel mortgage
over shares of stock, the same may be applied to the
attachment of the disputed shares of stock in the present
controversy since an attachment does not constitute an
absolute conveyance of property but is primarily used as
a means "to seize the debtor's property in order to
secure the debt or claim of the creditor in the event that
a judgment is rendered." 51
Known commentators on the Corporation Code expound,
thus:
xxx xxx xxx
Shares
of
stock
being
personal
property, may be the subject matter of
pledge
and
chattel
mortgage.
Such collateral transfers are however
not
covered
by
the
registration
requirement of Section 63, since our
Supreme Court has held that such
provision applies only to absolute
transfers thus, the registration in the
corporate books of pledges and chattel
mortgages of shares cannot have any
legal effect. 52 (Emphasis ours.)
xxx xxx xxx
The requirement that the transfer shall
be recorded in the books of the
corporation to be valid as against third
persons has reference only to absolute
transfers or absolute conveyance of the
ownership or title to a share.

48

In the case of Noble vs. Ft. Smith

Wholesale Grocery Co. (127 Pac., 14,
17; 34 Okl., 662; 46 L.R.A. [N.S.],
455), cited in Words and Phrases,
second series, vol. 4, p. 978, the
following appears:

Page

xxx xxx xxx

Consequently, the entry or notation on

the books of the corporation of pledges
and chattel mortgages on shares is not
necessary to their validity (although it
is advisable to do so) since they do not
involve absolute alienation of ownership
of stock (Monserrat vs. Ceron, 58 Phil.
469 [1933]; Chua Guan vs. Samahang
Magsasaka, Inc., 62 Phil. 472 [1935].)
To affect third persons, it is enough that
the date and description of the shares
pledged appear in a public instrument.
(Art. 2096, Civil Code.) With respect to
a chattel mortgage constituted on
shares of stock, what is necessary is its
registration in the Chattel Mortgage
Registry. (Act No. 1508 and Art. 2140,
Civil Code.) 53
CEIC's reliance on the Samahang Magsasaka case is
misplaced. Nowhere in the said decision was it
categorically stated that annotation of the attachment in
the corporate books is mandatory for its validity and for
the purpose of giving notice to third persons.
The only basis, then, for petitioner CEIC's claim is the
Deed of Sale under which it purchased the disputed
shares. It is, however, a settled rule that a purchaser of
attached property acquires it subject to an attachment
legally and validly levied thereon. 54
Our corollary inquiry is whether or not the consortium
has indeed a prior valid and existing attachment lien over
the disputed shares.
Jaime Gonzales' /Consortium's Claim
Is the consortium's attachment lien over the disputed
shares valid?
CEIC vigorously argues that the consortium's writ of
attachment over the disputed shares of Chemphil is null
and void, insisting as it does, that the notice of
garnishment was not validly served on the designated
officers on 19 July 1985.
To support its contention, CEIC presented the sheriff's
notice of garnishment 55 dated 19 July 1985 which
showed on its face that said notice was received by one
Thelly Ruiz who was neither the president nor managing
agent of Chemphil. It makes no difference, CEIC further
avers, that Thelly Ruiz was the secretary of the President
of Chemphil, for under the above-quoted provision she is
not among the officers so authorized or designated to be
served with the notice of garnishment.
We cannot subscribe to such a narrow view of the rule on
proper service of writs of attachment.
A secretary's major function is to assist his or her
superior. He/she is in effect an extension of the latter.

Moreover, the service and receipt of the notice of

garnishment on 19 July 1985 was duly acknowledged and
confirmed by the corporate secretary of Chemphil,
Rolando Navarro and his successor Avelino Cruz through
their
respective
certifications
dated
15
August
1989 57 and 21 August 1989. 58
We rule, therefore, that there was substantial compliance
with Sec. 7(d), Rule 57 of the Rules of Court.
Did the compromise agreement between Antonio Garcia
and the consortium discharge the latter's attachment lien
over the disputed shares?
CEIC argues that a writ of attachment is a mere auxiliary
remedy which, upon the dismissal of the case, dies a
natural death. Thus, when the consortium entered into a
compromise
agreement, 59 which
resulted
in
the
termination of their case, the disputed shares were
released from garnishment.
We disagree. To subscribe to CEIC's contentions would be
to totally disregard the concept and purpose of a
preliminary attachment.
A writ of preliminary attachment is a
provisional remedy issued upon order
of the court where an action is pending
to be levied upon the property or
properties of the defendant therein, the
same to be held thereafter by the
Sheriff as security for the satisfaction
of whatever judgment might be
secured in said action by the attaching
creditor
against
the
defendant. 60 (Emphasis ours.)
Attachment
is
a
juridical
institution which has for its purpose to
secure the outcome of the trial, that is,
the satisfaction of the pecuniary
obligation really contracted by a person
or believed to have been contracted by
him, either by virtue of a civil obligation
emanating from contract or from law,
or by virtue of some crime or
misdemeanor that he might have
committed, and the writ issued,
granted it, is executed by attaching and
safely keeping all the movable property
of the defendant, or so much thereof

49
Page

Obviously, as such, one of her duties is to receive letters

and notices for and in behalf of her superior, as in the
case at bench. The notice of garnishment was addressed
to and was actually received by Chemphil's president
through his secretary who formally received it for him.
Thus, in one case, 56 we ruled that the secretary of the
president may be considered an "agent" of the
corporation and held that service of summons on him is
binding on the corporation.

may be sufficient to satisfy the

plaintiff's demands . . . 61 (Emphasis
ours.)
The chief purpose of the remedy of
attachment is to secure a contingent
lien on defendant's property until
plaintiff
can,
by
appropriate
proceedings, obtain a judgment and
have such property applied to its
satisfaction, or to make some provision
for unsecured debts in cases where the
means of satisfaction thereof are liable
to be removed beyond the jurisdiction,
or improperly disposed of or concealed,
or otherwise placed beyond the reach
of creditors. 62 (Emphasis ours.)
We reiterate the rule laid down in BF Homes,
Inc. v. CA 63 that an attachment lien continues until the
debt is paid, or sale is had under execution issued on the
judgment or until judgment is satisfied, or the
attachment discharged or vacated in the same manner
provided by law. We expounded in said case that:
The appointment of a rehabilitation
receiver who took control and custody
of BF has not necessarily secured the
claims of Roa and Mendoza. In the
event
that
the
receivership
is
terminated with such claims not having
been satisfied, the creditors may also
find
themselves
without
security
therefor in the civil action because of
the dissolution of the attachment. This
should not be permitted. Having
previously obtained the issuance of the
writ in good faith, they should not be
deprived of its protection if the
rehabilitation plan does not succeed
and the civil action is resumed.
xxx xxx xxx
As we ruled in Government of the
Philippine Islands v. Mercado:
Attachment is in the
nature
of
a
proceeding in rem. It
is
against
the
particular
property.
The attaching creditor
thereby
acquires
specific lien upon the
attached
property
which ripens into a
judgment
against
the res when
the
order of sale is made.
Such a proceeding is

It has been held that

the lien obtained by
attachment
stands
upon
as
high
equitable grounds as
a mortgage lien:
The lien or security
obtained
by
an
attachment
even
before judgment, is a
fixed
and
positive
security, a specific
lien, and, although
whether it will ever be
made available to the
creditor depends on
contingencies,
its
existence is in no way
contingent,
conditioned
or
inchoate. It is a
vested interest, an
actual and substantial
security,
affording
specific security for
satisfaction of the
debt put in suit,
which constitutes a
cloud on the legal
title, and is as specific
as if created by virtue
of a voluntary act of
the debtor and stands
upon
as
high
equitable grounds as
a mortgage. (Corpus
Juris Secundum, 433,

and
authorities
therein cited.)

50
Page

in effect a finding that

the property attached
is an indebted thing
and
a
virtual
condemnation of it to
pay the owner's debt.
The law does not
provide the length of
time an attachment
lien shall continue
after the rendition of
judgment,
and
it
must
therefore
necessarily continue
until the debt is paid,
or sale is had under
execution issued on
the judgment or until
judgment is satisfied,
or the attachment
discharged or vacated
in
some
manner
provided by law.

xxx xxx xxx

The case at bench admits of a peculiar character in the
sense that it involves a compromise agreement.
Nonetheless, the rule established in the aforequoted
cases still applies, even more so since the terms of the
agreement have to be complied with in full by the parties
thereto. The parties to the compromise agreement should
not be deprived of the protection provided by an
attachment lien especially in an instance where one
reneges on his obligations under the agreement, as in the
case at bench, where Antonio Garcia failed to hold up his
own end of the deal, so to speak.
Moreover, a violation of the terms and conditions of a
compromise agreement entitles the aggrieved party to a
writ of execution.
In Abenojar & Tana v. CA, et al.,

64

we held:

The non-fulfillment of the terms and

conditions of a compromise agreement
approved
by
the
Court
justifies
execution thereof and the issuance of
the writ for said purpose is the Court's
ministerial
duty
enforceable
by mandamus.
Likewise we ruled in Canonizado v. Benitez: 65
A judicial compromise may be enforced
by a writ of execution. If a party fails or
refuses to abide by the compromise,
the other party may enforce the
compromise or regard it as rescinded
and insist upon his original demand.
If we were to rule otherwise, we would in effect create a
back door by which a debtor can easily escape his
creditors. Consequently, we would be faced with an
anomalous situation where a debtor, in order to buy time
to dispose of his properties, would enter into a
compromise agreement he has no intention of honoring
in the first place. The purpose of the provisional remedy
of attachment would thus be lost. It would become, in
analogy, a declawed and toothless tiger.
From the foregoing, it is clear that the consortium and/or
its assignee Jaime Gonzales have the better right over
the disputed shares. When CEIC purchased the disputed
shares from Antonio Garcia on 15 July 1988, it took the
shares subject to the prior, valid and existing attachment
lien in favor of and obtained by the consortium.
Forum Shopping in G.R. No. 113394

The Court of Appeals opined:

True it is, that petitioner PCIB was not a
party to the appeal made by the four
other
banks
belonging
to
the
consortium, but equally true is the rule
that where the rights and liabilities of
the parties appealing are so interwoven
and dependent on each other as to be
inseparable, a reversal of the appealed
decision as to those who appealed,
operates as a reversal to all and will
inure to the benefit of those who did
not join the appeal (Tropical Homes vs.
Fortun,
169
SCRA
80,
p.
90, citing Alling vs. Wenzel, 133 111.
264-278; 4 C.J. 1206). Such principal,
premised upon communality of interest
of the parties, is recognized in this
jurisdiction (Director of Lands vs.
Reyes, 69 SCRA 415). The four other
banks which were part of the
consortium, filed their notice of appeal
under date of March 16, 1990,
furnishing a copy thereof upon the
lawyers of petitioner. The petition
for certiorari in the present case was
filed on April 10, 1990, long after the
other members of the consortium had
appealed from the assailed order of
December 19, 1989.

51
Page

We uphold the decision of the Court of Appeals finding

PCIB guilty of forum-shopping. 66

Forum-shopping or the act of a party against whom an

adverse judgment has been rendered in one forum, of
seeking another (and possibly favorable) opinion in
another forum (other than by appeal or the special civil
action of certiorari), or the institution of two (2) or more
actions or proceedings grounded on the same cause on
the supposition that one or the other court would make a
favorable disposition, 70 has been characterized as an act
of malpractice that is prohibited and condemned as
trifling with the Courts and abusing their processes. It
constitutes improper conduct which tends to degrade the
administration of justice. It has also been aptly described
as deplorable because it adds to the congestion of the
already
heavily
burdened
dockets
of
the
courts. 71
WHEREFORE, premises considered the appealed decision
in G.R. Nos. 112438-39 is hereby AFFIRMED and the
appealed decision in G.R. No. 113394, insofar as it
adjudged the CEIC the rightful owner of the disputed
shares, is hereby REVERSED. Moreover, for wantonly
resorting
to
forum-shopping,
PCIB
is
hereby
REPRIMANDED and WARNED that a repetition of the
same or similar acts in the future shall be dealt with
more severely.
SO ORDERED.

We view with skepticism PCIB's contention that it did not

join the consortium because it "honestly believed
thatcertiorari was the more efficacious and speedy relief
available under the circumstances." 67 Rule 65 of the
Revised
Rules
of
Court
is
not
difficult
to
understand. Certiorari is available only if there is no
appeal or other plain, speedy and adequate remedy in
the ordinary course of law. Hence, in instituting a
separate petition for certiorari, PCIB has deliberately
resorted to forum-shopping.
PCIB cannot hide behind the subterfuge that Supreme
Court Circular 28-91 was not yet in force when it filed
thecertiorari proceedings in the Court of Appeals. The
rule
against
forum-shopping
has
long
been
established. 68Supreme Court Circular 28-91 merely
formalized the prohibition and provided the appropriate
penalties against transgressors.
It alarms us to realize that we have to constantly repeat
our warning against forum-shopping. We cannot overemphasize its ill-effects, one of which is aptly
demonstrated in the case at bench where we are
confronted with two divisions of the Court of Appeals
issuing contradictory decisions 69 one in favor of CEIC and
the other in favor of the consortium/Jaime Gonzales.

G.R. No. L-15499

February 9, 1921

STREET, J.:
On December 10, 1914, one Salvador Farre recovered a
joint and several judgment against Salomon M. Sharruf
and Farham M. Sharruf in the Court of First Instance of
the city of Manila for the sum of P1,300, with legal
interest from September 5, 1914, and with costs. This
judgment having remained unsatisfied, and execution
was upon April 3, 1916, issued thereon at the instance of
the plaintiff.
Meanwhile on March 27, 1915, Salomon M. Sharruf had
himself recovered a judgment, also in the Court of First
Instance of the city of Manila, against the Tayabas Land
Company and A.M. Ginainati, for the sum of P6,841.36,
with interest and costs; and as there seems to have been
no visible property belonging to Salomon M. Sharruf and
Farham M. Sharruf subject to seizure by the sheriff to
satisfy the execution in favor of Salvador Farre, it became
important for Farre to subject the judgment in favor of
Salomon M. Sharruf against the Tayabas Land Company
and A.M. Ginainati to the payment of his own claim.
To this end process of garnishment (notification de
embargo) was, on April 6, 1916, issued at the instance of
Salvador Farre in aid of his execution against the
Sharrufs and was on the same or succeeding day duly
served upon the Tayabas Land Company. By this process
the Tayabas Land Company was informed that levy had,
by virtue of the execution aforesaid, been made upon all
the property of S. M. Sharruf in the possession of said
Tayabas Land Company and upon all debts owing by the
latter to said Sharruf, and in particular upon all
participation and interest of S. M. Sharruf in the
judgment rendered in his favor in the action prosecuted
by him against the Tayabas Land Company and others.
In pursuance of the levy thus effected upon the judgment
in favor of Salomon M. Sharruf against the Tayabas Land
Company, the sheriff of the city of Manila, as in ordinary
cases of levy upon chattels of real property, proceeded
upon April 15, 1916, to expose to sale all right, title, and
interest of said Sharruf in the judgment aforesaid. At this
sale Salvador Farre, the execution creditor himself,
became the purchaser of the judgment in question for
the sum of P200; but the Tayabas Land Company, with a
legitimate view to its own protection, afterwards stepped
in, and acting through Mr. Francisco Alvarez, as attorney
and intermediary, purchased from Farre, on October 6,
1917, the judgment of Salomon M. Sharruf against itself,
paying to Farre the full amount due him, to wit, the sum
of P1,588.24.

52
Page

THE TAYABAS LAND COMPANY, plaintiff-appellee,

vs.
SALOMON SHARRUF, CANUTO BARTOLOME, sheriff
of
Tayabas,
SALVADOR
FARRE
and
FRANCISCO
ALVAREZ, defendants.
SALOMON SHARRUF, appellant.

At this point it should be stated that when levy of

execution was made in the manner above stated, upon
the judgment in favor of Sharruf against the Tayabas
Land Company and others, the time allowed by law for an
appeal in that case of the Supreme Court had not
passed; and said cause was in fact subsequently
appealed to the Supreme Court, where final judgment
was rendered, affirming the decision of the lower court,
on February 15, 1918.1
It may also be stated that on April 4, 1916, Salomon M.
Sharruf, by a public document, which was duly
incorporated in the record in his case against the Tayabas
Land Company, et al., sold and transferred unto O'Brien &
Company, a corporation, his right, title, and interest in
the judgment aforesaid to the extent necessary to satisfy
a debt for P988.14, owing to O'Brien & Company, for
merchandise purchased from said entity by Sharruf; and
upon the same date Messrs. Crossfield & O'Brien, as
attorneys, filed a memorandum of an attorney's lien in
their favor to the extent of 25 per cent of the amount of
the judgment. These transactions, as will be seen, had
the result of reducing in a considerable degree the
apparent beneficial interest of Salomon M. Sharruf in the
result of the litigation, but they do not affect the
fundamentals of the case.
As a consequence of the facts above narrated the
Tayabas Land Company supposes that the judgment
obtained by Salomon M. Sharruf against it and A.M.
Ginainati has been wholly satisfied, while Salomon M.
Sharruf and those interested under him claim that the
execution sale of the judgment in question was void and
that as a consequence said judgment remains wholly
unsatisfied. Proceeding upon this conception of the case,
Messrs. Crossfield and O'Brien, as attorneys for the
plaintiff in that action, procured an execution to be issued
on August 30, 1918, upon said judgment for the entire
amount of the recovery, including accrued interest and
costs, less the sum of P13.21, which had been secured in
a garnishment proceeding against one of the local banks.
Being thus menaced with the levy of an execution upon
its property, the Tayabas Land Company instituted the
present action in the Court of First Instance of the city of
Manila, Against Salomon M. Sharruf and others, including
the sheriff of the Province of Tayabas, to obtain an order
restraining the threatened levy of execution and
perpetually enjoining all proceedings for the enforcement
of the judgment against it. Upon hearing the cause the
trial court, while recognizing the validity of the claims of
O'Brien & Company and of Crossfield and O'Brien, held
that all other interest in said judgment pertaining to
Salomon M. Sharruf had passed by virtue of the
execution sale to Salvador Farre and thence by transfer
through Francisco Alvarez to the Tayabas Land Company.
As a consequence the court declared the preliminary
injunction perpetual. From said judgment Salomon M.
Sharruf appealed to this court.
The principal question in the case relates to the validity of
the proceedings whereby the judgment against the

53
Page

Tayabas Land Company and A.M. Ginainati in favor of

Salomon M. Sharruf was, on April 15, 1916, exposed to
sale by the sheriff under the execution issued in the
action of Salvador Farre against the two Sharrufs; and we
believe it will be conducive to clarity in the discussion for
us to proceed at once to consider the manner in which,
under the provisions of our Code of Civil Procedure, a
judgment for a sum of money entered in favor of the
plaintiff in one case can be reached and applied to the
payment of a judgment in another case against the party
who occupies the position of creditor in the former.

To proceed a little further with the barest details of the

process of garnishment, we note that a citation issues
from the court having jurisdiction of the principal
litigations, notifying the garnishee that the property and
credits of the judgment debtor have been levied upon or
attached in the hands of such garnishee, and enjoining
him not to deliver, transfer, or otherwise dispose of any
effects or credits belonging to that person, and requiring
him furthermore to make a statement to the court of the
property of the judgment debtor in his hands and of the
debts owing by the garnishee to such debtor.

In the first place, we have no hesitancy in saying that a

judgment for a sum of money, that is, the interest of the
plaintiff in such a judgment, is liable to execution. A
judgment for a sum of money is, as to the party entitled
to payment, a credit; and as to the party who ought to
pay the money, a debt. Furthermore, the interest of the
creditor in such a judgment is clearly property, though
not capable of manual delivery. All of these elements of
value "debts." "credits," and "all other property not
capable of manual delivery" are expressly declared, in
section 450 of the Code of Civil Procedure, to be liable to
execution. It will be noted, however, that under the
section just cited, debts, credits, and other property not
capable of manual delivery are to be dealt with in a
different manner from that prescribed in case of the
execution of tangible property; for while tangible
property is proceeded with by seizure and sale under
execution, debts and credits are to be attached by the
citation of the debtor. The provisions governing the
execution of tangible property are found in sections 453
to 457, inclusive, of the Code of Civil Procedure; while
the provisions prescribing the method of reaching debts
and credits are found chiefly in the chapter relating to
attachment, consisting principally of sections 431 to 436,
inclusive, of the Code of Civil Procedure.

In cases where indebtedness is admitted, as not

infrequently occurs, the payment of the money by the
garnishee to the judgment creditor or into court, brings
the proceeding to a close, so far as the garnishee is
concerned; but if the garnishee fails to answer, or does
not admit the indebtedness, he may be required to
attend before the court in which the action is pending to
be examined on oath respecting the same. Finally, if the
liability of the garnishee is made manifest, the officer of
the court may, under paragraph No. 3 of section 436 of
the Code of Civil Procedure, collect the money and pay it
to the person entitled.

The proceeding thus indicated as proper, in order to

subject a debt or credit is known in American civil
procedure as the process of garnishment; and it may be
truly said that garnishment is one of the simplest
processes, and the least involved in technicalities, of any
proceeding known to the law. It consists in the citation of
some stranger to the litigation, who is debtor to one of
the parties to the action. By this means such debtor
stranger becomes a forced intervenor; and the court,
having acquired jurisdiction over his person by means of
the citation, requires him to pay his debt, not to his
former creditor, but to the new creditor, who is creditor in
the main litigation. It is merely a case of involuntary
novation by the substitution of one creditor for another.
Upon principle the remedy is a species of attachment or
execution for reaching any property pertaining to a
judgment debtor which may be found owing to such
debtor by a third person.

Enough has now been said to show clearly that the action
of the sheriff in exposing to public sale the judgment
which had been procured by Salomon M. Sharruf in the
action against the Tayabas Land Company, et al., was
wholly unauthorized, and said sale must be considered
void. The proper step would have been for the court to
require the Tayabas Land Company, after the judgment
against it had become final, to pay into court, in the
cause wherein Salvador Farre was plaintiff, a sufficient
amount of money to satisfy Farre's claim against Sharruf;
and if the judgment against the Tayabas Land Company
had been permitted to go to the stage of execution, the
proceeds in the hands of the sheriff would have been
applied, under the direction of the court, to the payment
of Farre's claim before any part would have been payable
to Sharruf.

The situation involved supposes the existence of at least

three persons, to wit, a judgment creditor, a judgment
debtor, and the garnishee, or person cited, who in turn is
supposed to be indebted to the first debtor (i.e.,
judgment debtor).

The circumstances that garnishment has not been made

the subject of independent treatment in our Code of Civil
Procedure and that the rules relating thereto are only
brought out inferentially in connection with the subject of
attachment has undoubtedly contributed to obscure a
matter which upon principle is simple enough. Additional
light on the subject may, however, be acquired by
referring to sections 476, 481, and 486 of the Code of
Civil
Procedures, which
treat of supplementary
proceedings. It will be found that those proceedings are
identical in principle with the proceeding for the citation
of debtors explained in the chapter on attachment.

In dealing with the problems which have from time to

time arisen in connection with garnishment proceedings,
courts have sometimes been perplexed over the matter
of protecting the garnishee from the danger of having to
pay his debt twice; and it goes without saying that the
procedure must be so adjusted as not to subject the
garnishee to this risk. Otherwise it is a fatal obstacle to

Our conclusion that the sale of the judgment in question

under process of execution was void is supported by the
decisions of the Supreme Court of California, construing
the very section of the California Code of Civil Procedure
from which section 450 of the Code of Civil Procedure of
the Philippine Islands was taken. Thus, in McBride vs.
Fallon (65 Cal., 301, 303), the Supreme Court of that
State said:
After enumerating the kinds of property of a
judgment debtor liable to execution, the Code
provides that "shares and interests in any
corporation or company" and debts and
credits . . . and all other property not capable of
manual delivery, may be attached on execution
in like manner as upon writs of attachments.
"Debts and credits and property not capable of
manual delivery must be attached in the mode
pointed out by subdivision 5, sec. 542."
(Corresponding to section 431 of the Philippine
Code of Civil Procedure.) "That is "by leaving
with the person owing the debt or having in
possession or under his control such credits and
other personal property" or with his agent, a
copy of the writ, and a notice that the debts
owing by him to the defendant, or the credits
and other personal property' in his possession or
under his control, belonging to the defendant
are attached in pursuance of such writ.
"The fact that a debt is evidenced by a judgment
does not, in our opinion, make it anything more
or less than a debt, or more capable of manual
delivery than it would be if not so evidenced. No
provision is made for attaching or levying
on evidences of debt. It is the debt itself which
may be attached by writ of attachment, or on
execution in like manner as upon writs of
attachment." This we think to be the meaning of
the Code, and the mode prescribed by it is
exclusively . . .
In order to avoid misunderstanding, we wish to say that
we make no question as to the propriety of the
proceedings up to the time when the judgment in
question was advertised and exposed to sale by the
sheriff. The issuance of the execution and the service of
the garnishment were appropriate; and the garnishment
was effective for the purpose of preventing the
garnishee, the Tayabas Land Company, from paying the
judgment to Salomon M. Sharruf.
Moreover, the garnishment was effective for the purpose
of conferring upon the Tayabas Land Company the right
to pay off the judgment which Farre had obtained against

54
Page

the garnishment. No such difficulty would arise in a case

like this, where the two judgments are both of record in
the same court, and where consequently that court has
control over the process in both cases.

Sharruf. This right is not only recognized in section 481 of

the Code of Civil Procedure but also in subsection 3 of
article 1210 of the Civil Code; and by satisfying Farre's
claim, regardless of the manner in which it was
accomplished, the Tayabas Land Company absolved itself
pro tanto from its indebtedness to Sharruf. It results
that, although the judgment against the Tayabas Land
Company has not yet been satisfied in full, said company
is entitled to be credited with the sum of P1,588.24, said
by it, through Francisco Alvarez, to Farre on October 6,
1917, with interest.
In the view we take of the case it becomes unnecessary
to consider at length the fact that Sharruf's judgment
against the Tayabas Land Company was appealed to the
Supreme Court after the process of garnishment had
been served on the company. Suffice is to say that this
circumstance would at most merely postpone the
realization of the results without defeating the
garnishment.
Reflection upon this feature of the case, however,
confirms the opinion that our lawmakers acted wisely in
requiring that debts and credits should be executed by
means of the process of garnishment rather than by
exposing them to public sale. In the case before us a
judgment for a large amount was sold for a merely
nominal sum, and such would generally be the case at a
sale under similar conditions. This cannot fail to be highly
prejudicial to the debtor who is under immediate
execution. The proceeding by garnishment, on the
contrary, enables all parties to realize their rights without
unduly disturbing the position of any.
The judgment must be reserved, and the defendants will
be absolved from the complaint. It is so ordered, without
express pronouncement as to costs of either instance.

G.R. No. L-39596

March 23, 1934

"CONSULTA" No. 1013 OF THE REGISTER OF DEEDS

OF TAYABAS. GOTAUCO & CO., applicant-appellant,
vs.
THE REGISTER OF DEEDS OF TAYABAS, oppositorappellee.
Godofredo
Reyes
for
appellant.
Office of the Solicitor-General Hilado for appellee.
BUTTE, J.:
This is an appeal from a judgment of the Fourth Branch
of the Court of First Instance of Manila in
a consultasubmitted by the register of deeds of Tayabas.

55

On August 12, 1932, when Exhibits A and B were

presented to the register, by which a levy of execution
against the judgment debtor, Rafael Vilar was made on
fifteen contracts of land described in Exhibit B and
registered in the name of Florentino Vilar, the register
properly denied the inscription of said levy of execution
because the title to the lands was in the name of
Florentino Vilar and no evidence was submitted that
Rafael Vilar had any present or possible future interest in
the land. On September 17, 1932, there was presented
to him a copy of a petition filed in the Court of First
Instance of the province, entitled, "Intestado del Finado
Florentino Vilar", from which he could properly infer that
Florentino Vilar was dead and that the judgment debtor
Rafael Vilar is one of the heirs of the deceased Florentino
Vilar. Although the value of the participation of Rafael
Vilar in the estate of Florentino Vilar was indeterminable
before the final liquidation of the estate, nevertheless,
the right of participation in the estate and the lands
thereof may be attached and sold. The real test was laid
down by this court in the case ofReyes vs. Grey (21 Phil.,
73, 76), namely: Does the judgment debtor hold such a
beneficial interest in the property that he can sell or
otherwise dispose of it for value? Nothing appears in this
record to indicate that Rafael Vilar being sui juris could
not dispose of his interest or share as heir in the estate
of Florentina Vilar. Having this right, he could by a
conveyance defeat pro tanto the provisions of section 450
of the Code of Civil Procedure and thus deprive the
judgment creditor of the benefit of a lawful execution.
(See also Consulta No. 441 de los Abogados de Smith,
Bell & Co., 48 Phil., 656, 664, 665.)
On October 12, 1932, with the knowledge which he them
had, the register should have accepted and inscribed
Exhibit A, B and D.
The judgment in this consulta is reversed without special
pronouncement as to costs.1vvphi1.ne+

RURAL BANK OF STA. BARBARA [PANGASINAN],

INC.,
Petitioner,
- versus THE MANILA MISSION OF
THECHURCH OF JESUS
CHRIST OF LATTER DAY SAINTS, INC.,
Respondent.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

Page

Our decision upon this appeal has been facilitated

because both the appellant and the appellee, the latter
being represented by the Solicitor-General, agreed that
the judgment should be reversed.

DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under
Rule 45 of the Rules of Court seeking to set aside the
Decision[1] dated 29 July 1997 of the Court of Appeals in
CA-G.R. SP No. 41042 affirming the Orders dated 9
October 1995 and 27 February 1996 of the Regional Trial
Court (RTC), Branch 43, of Dagupan City, in Civil Case
No. D-10583.
Spouses Tomas and Maria Soliven (spouses
Soliven) were the registered owners, under Transfer
Certificate of Title (TCT) No. T-125213, of a parcel of land
located in Barangay Maninding, Sta. Barbara, Pangasinan
(subject property). On 18 May 1992, the spouses Soliven
sold the subject property to respondent Manila Mission of
the Church of Jesus Christ of Latter Day Saints, Inc.
(Manila Mission). However, it was only on 28 April 1994
when TCT No. T-125213 in the name of the spouses
Soliven was cancelled, and TCT No. 195616 was issued in
the name of respondent.
In the meantime, on 15 April 1993, petitioner
Rural Bank of Sta. Barbara (Pangasinan), Inc. filed with
the RTC a Complaint against the spouses Soliven for a
sum of money, docketed as Civil Case No. D-10583. The
Complaint of petitioner included a prayer for the issuance
of a Writ of Preliminary Attachment.
In an Order dated 7 May 1993, the RTC ordered
the issuance of the Writ of Attachment petitioner prayed
for, to wit:
WHEREFORE, let a Writ of
Attachment be issued against all the
properties of [Spouses Soliven] not
exempt from execution or so much
thereof as may be sufficient to satisfy
the [herein petitioners] principal claim
of P338,000.00
upon
filing
of
[petitioners] bond in the amount
of P100,000.00.[2]
Upon the filing by petitioner of the required
bond, the RTC issued the Writ of Attachment on 21 May
1993. Acting on the authority of said Writ, Sheriff
Reynaldo C. Daray attached the subject property, which
was then still covered by TCT No. T-125213 in the name
of the spouses Soliven. The Writ of Attachment was
annotated on TCT No. T-125213 on 24 May 1993. Thus,
when TCT No. T-125213 of the spouses Soliven was
cancelled and TCT No. 195616 of petitioner was issued
on 28 April 1994, the annotation on the Writ of
Attachment was carried from the former to the latter.
While Civil Case No. D-10583 was still pending
before the RTC, respondent executed an Affidavit
claiming title and ownership over the subject property,
and requested the Ex-Officio Provincial and City Sheriff to
release the said property from attachment. The Sheriff,
however, advised respondent to file a motion directly with
the RTC.
On 16 March 1995, respondent filed with the
RTC, in Civil Case No. D-10583, a Motion to Release
Property from Attachment, to which petitioner, in turn,
filed an Opposition. After hearing, the RTC issued an

WHEREFORE,
the
Court
hereby directs the Ex-Officio Provincial
Sheriff of Pangasinan and City Sheriff of
Dagupan to discharge and release the
subject land from attachment and
orders the notice of attachment on
T.C.T. No. 195616 of the Register of
Deeds of Pangasinan be cancelled.[3]
Petitioner filed a Motion for Reconsideration of
the 9 October 1995 Order of the RTC, arguing that it had
a better right over the subject property and that the filing
by respondent with the RTC, in Civil Case No. D-10583,
of a Motion to Release Property from Attachment, was
the improper remedy. In an Order dated 27 February
1996, the RTC denied the Motion for Reconsideration of
petitioner for lack of merit.
On 12 April 1997, petitioner filed a Petition
for Certiorari with this Court, alleging that the RTC
committed grave abuse of discretion, amounting to lack
or excess of jurisdiction, in canceling the Writ of
Attachment and ordering the release of the subject
property. The Petition was docketed as G.R. No.
124343. In a Resolution dated 27 May 1997, this Court
referred the case to the Court of Appeals for appropriate
action.
The Court of Appeals docketed the Petition
for Certiorari as CA-G.R. SP No. 41042. On 29 July 1997,
the Court of Appeals issued the assailed Decision
dismissing the Petition.
Hence, petitioner again comes before this
Court via the present Petition for Review, contending that
the Court of Appeals erred in not finding grave abuse of
discretion on the part of the RTC when the latter directed
the
release
of
the
subject
property
from
attachment. Petitioner insists that it has a better right to
the subject property considering that: (1) the attachment
of the subject property in favor of petitioner was made
prior to the registration of the sale of the same property
to respondent; and (2) respondent availed itself of the
wrong remedy in filing with the RTC, in Civil Case No. D10583,
a
Motion
to
Release
Property
from
Attachment. We shall discuss ahead the second ground
for the instant Petition, a matter of procedure, since its
outcome will determine whether we still need to address
the first ground, on the substantive rights of the parties
to the subject property.
Propriety of the Motion to
Release
Property
from
Attachment
According to petitioner, the Motion to Release
Property from Attachment filed by respondent before the
RTC, in Civil Case No. D-10583, is not the proper remedy
under Section 14, Rule 57 of the Rules of Court, [4] which
provides:
SEC.
14. Proceedings where property
claimed by third person.If the property
attached is claimed by any person other
than
the
party
against
whom

56
Page

Order on 9 October 1995 discharging the subject

property from attachment. The RTC decreed in said
Order:

attachment had been issued or his

agent, and such person makes an
affidavit of his title thereto, or right to
the possession thereof, stating the
grounds of such right or title, and
serves such affidavit upon the sheriff
while the latter has possession of the
attached property, and a copy thereof
upon the attaching party, the sheriff
shall not be bound to keep the property
under attachment, unless the attaching
party or his agent, on demand of the
sheriff, shall file a bond approved by
the court to indemnify the third-party
claimant in a sum not less than the
value of the property levied upon. In
case of disagreement as to such value,
the same shall be decided by the court
issuing the writ of attachment. No claim
for damages for the taking or keeping
of the property may be enforced
against the bond unless the action
therefor is filed within one hundred
twenty (120) days from the date of the
filing of the bond.
The sheriff shall not be liable
for damages for the taking or keeping
of such property, to any such thirdparty claimant, if such bond shall be
filed. Nothing herein contained shall
prevent such claimant or any third
person from vindicating his claim to the
property, or prevent the attaching party
from claiming damages against a thirdparty claimant who filed a frivolous or
plainly spurious claim, in the same or a
separate action.
When the writ of attachment
is issued in favor of the Republic of the
Philippines,
or
any
officer
duly
representing it, the filing of such bond
shall not be required, and in case the
sheriff is sued for damages as a result
of the attachment, he shall be
represented by the Solicitor General,
and if held liable therefor, the actual
damages adjudged by the court shall
be paid by the National Treasurer out of
the funds to be appropriated for the
purpose.
Petitioner argues that, pursuant to the
aforequoted section, the remedy of a third person
claiming to be the owner of an attached property are
limited to the following: (1) filing with the Sheriff a thirdparty claim, in the form of an affidavit, per the first
paragraph of Section 14; (2) intervening in the main
action, with prior leave of court, per the second paragraph
of Section 14, which allows a third person to vindicate
his/her claim to the attached property in the same x x x
action; and (3) filing a separate and independent
action, per the second paragraph of Section 14, which
allows a third person to vindicate his/her claim to the
attached property in a separate action.
Respondent explains that it tried to pursue the
first remedy, i.e., filing a third-party claim with the
Sheriff. Respondent did file an Affidavit of Title and
Ownership with the Sheriff, but said officer advised

We agree with the Court of Appeals on this

score. The filing by respondent of the Motion to Release
Property from Attachment was made on the advice of the
Sheriff upon whom respondent served its Affidavit of Title
and Ownership. Respondent should not be faulted for
merely heeding the Sheriffs advice. Apparently, the
Sheriff, instead of acting upon the third-party claim of
respondent on his own, would rather have some direction
from the RTC. Indeed, the Sheriff is an officer of the RTC
and may be directed by the said court to allow the thirdparty claim of respondent. Therefore, the filing of the
Motion in question can be deemed as a mere continuation
of the third-party claim of respondent, in the form of its
Affidavit of Title and Ownership, served upon the Sheriff,
in accord with the first paragraph of Section 14, Rule 57
of the Rules of Court.
Alternatively, we may also consider the Motion
to Release Property from Attachment, filed by respondent
before the RTC, as a Motion for Intervention in Civil Case
No. D-10583, pursuant to the second paragraph of
Section 14, Rule 56, in relation to Rule 19 of the Rules of
Court. Respondent, to vindicate its claim to the subject
property, may intervene in the same case, i.e., Civil Case
No. D-10583, instituted by petitioner against the spouses
Soliven,
in
which
the
said
property
was
attached. Respondent has the personality to intervene, as
it is so situated as to be adversely affected by a
distribution or other disposition of property in the custody
of the court or of an officer thereof.[5] The RTC, in acting
upon and granting the Motion to Release Property from
Attachment in its Order dated 9 October 1995, is deemed
to have allowed respondent to intervene in Civil Case No.
D-10583.
Moreover, it may do petitioner well to remember
that rules of procedure are merely tools designed to
facilitate the attainment of justice. They were conceived
and promulgated to effectively aid the court in the
dispensation of justice. Courts are not slaves to or robots
of technical rules, shorn of judicial discretion. In
rendering justice, courts have always been, as they ought
to be, conscientiously guided by the norm that on the
balance, technicalities take a backseat to substantive
rights, and not the other way around.Thus, if the
application of the Rules would tend to frustrate rather
than promote justice, it is always within the power of the
Court to suspend the rules, or except a particular case
from its operation.[6] Hence, even if the Motion to Release
Property from Attachment does not strictly comply with
Section 14, Rule 56 of the Rules of Court, the RTC may
still allow and act upon said Motion to render substantive
justice.
This leads us to the substantive issue in this
case, on which between the two transactions should be
given priority: the previous yet unregistered sale of the
subject property by the spouses Soliven to respondent,
or the subsequent but duly annotated attachment of the
same property by petitioner.

57
Page

respondent to file a motion directly with the RTC in the

main case. Respondent heeded the Sheriffs advice by
filing with the RTC, in Civil Case No. D-10583, a Motion to
Release Property from Attachment. The Court of Appeals
recognized and allowed said Motion, construing the same
as an invocation by respondent of the power of control
and supervision of the RTC over its officers, which
includes the Sheriff.

Previous yet unregistered sale

versus subsequent but duly
annotated attachment
Petitioner does not dispute the allegation of
respondent that the subject property was sold by the
spouses Soliven to respondent on 18 May 1992, before
petitioner instituted Civil Case No. D-10583 against the
spouses Soliven on 15 April 1993; the RTC ordered the
issuance of the Writ of Attachment on 7 May 1993; and
the attachment of the subject property pursuant to the
Writ on 27 May 1993.
Neither did petitioner offer evidence to counter
the following documents presented by respondent
establishing the fact of the sale of the subject property to
the latter by the spouses Soliven: (1) the notarized Deed
of Sale dated 18 May 1992; (2) BPI Managers Check No.
010685 dated 8 May 1992 in the sum of P42,500.00 to
represent the tender of payment of capital gains tax; (3)
BIR Official Receipt No. 0431320 dated 18 May 1992 of
BPI Check No. 010625 for the payment of the sum
of P8,5000.00; and (4) a letter dated 11 August 1992 of
Manila Missions former counsel, Lim Duran & Associates,
to the Revenue District Officer, District 7, Bureau of
Internal Revenue, relative to its request for the
reconsideration/condonation of the assessment of the
capital gains tax on its purchase of the subject property.
Petitioner, however, invokes jurisprudence
wherein this Court in a number of instances allegedly
upheld a subsequent but duly annotated attachment, as
opposed to a previous yet unregistered sale of the same
property. Petitioner particularly calls our attention to the
following paragraph in Ruiz, Sr. v. Court of Appeals[7]:
[I]n case of a conflict between a
vendee and an attaching creditor, an
attaching creditor who registers the
order of attachment and the sale of the
property to him as the highest bidder
acquires a valid title to the property, as
against a vendee who had previously
bought the same property from the
registered owner but who failed to
register his deed of sale. This is
because registration is the operative act
that binds or affects the land insofar as
third persons are concerned. It is upon
registration that there is notice to the
whole world.
In the more recent case Valdevieso v.
Damalerio,[8] we have expounded on our foregoing
pronouncement in Ruiz.
On 5 December 1995, therein petitioner
Bernardo Valdevieso (Valdevieso) bought a parcel of land
from spouses Lorenzo and Elenita Uy (spouses Uy), the
registered owners thereof. On 19 April 1996, therein
respondents, spouses Candelario and Aurea Damalerio
(spouses Damalario), filed a Complaint against the
spouses Uy for a sum of money before the RTC of
General Santos City. On 23 April 1996, the RTC issued a
Writ of Preliminary Attachment by virtue of which the
subject parcel of land was levied. The levy was duly
recorded in the Register of Deeds, and annotated on the
TCT of the spouses Uy over the subject parcel of land. It
was only on 6 June 1996 that the TCT in the name of the
spouses Uy was cancelled, and a new one issued in the

The sole issue in this case is

whether or not a registered writ of
attachment on the land is a superior
lien over that of an earlier unregistered
deed of sale.
xxxx
The settled rule is that levy on
attachment, duly registered, takes
preference over a prior unregistered
sale.
This result is a necessary
consequence of the fact that the
property involved was duly covered by
the Torrens system which works under
the
fundamental
principle
that
registration is the operative act which
gives validity to the transfer or creates
a lien upon the land.
The preference created by the
levy on attachment is not diminished
even by the subsequent registration of
the prior sale. This is so because an
attachment is a proceeding in rem. It is
against
the
particular
property,
enforceable against the whole world.
The attaching creditor acquires a
specific lien on the attached property
which nothing can subsequently destroy
except the very dissolution of the
attachment or levy itself. Such a
proceeding, in effect, means that the
property attached is an indebted thing
and a virtual condemnation of it to pay
the owners debt. The lien continues
until the debt is paid, or sale is had
under
execution
issued
on
the
judgment, or until the judgment is
satisfied, or the attachment discharged
or vacated in some manner provided by
law.
Thus, in the registry, the
attachment in favor of respondents
appeared in the nature of a real lien
when petitioner had his purchase
recorded. The effect of the notation of
said
lien
was
to
subject
and
subordinate the right of petitioner, as
purchaser, to the lien.
Petitioner
acquired ownership of the land only
from the date of the recording of his
title in the register, and the right of
ownership which he inscribed was not
absolute but a limited right, subject to
a prior registered lien of respondents, a
right which is preferred and superior to
that of petitioner.[9]
It is settled, therefore, that a duly registered
levy on attachment takes preference over a prior
unregistered sale.

58
Page

name of Valdevieso. As in the case at bar, the annotation

on the attachment was carried over to Valdeviesos
TCT.Valdevieso filed a third-party claim before the RTC
seeking to annul the attachment. In a resolution, the RTC
ruled in Valdeviesos favor, but the Court of Appeals
reversed said RTC resolution. On appeal, we adjudged:

Nonetheless, respondent argues that there is a

special circumstance in the case at bar, which should be
deemed a constructive registration of the sale of the
subject property in its favor, preceding the attachment of
the same property by petitioner.
Knowledge
of
unregistered sale

previous

yet

In Ruiz, the very case cited by petitioner, we

made a qualification of the general rule that a duly
annotated attachment is superior to an unregistered prior
sale. In fact, we resolved Ruiz in favor of the vendee in
the unregistered prior sale, because knowledge of the
unregistered sale by the attaching creditor is deemed
equivalent to registration. We explained in Ruiz:
But
where a party has
knowledge of a prior existing interest
which is unregistered at that time he
acquired a right to the same land, his
knowledge
of
that
prior
unregistered interest has the effect
of registration as to him. Knowledge
of an unregistered sale is equivalent to
registration. As held in Fernandez v.
Court of Appeals [189 SCRA 780
(1990)],
Section 50 of
Act No. 496 (now Sec.
51 of P.D. 1529),
provides
that
the
registration
of
the
deed is the operative
act to bind or affect
the land insofar as
third
persons
are
concerned. But where
the
party
has
knowledge of a prior
existing interest which
is unregistered at the
time he acquired a
right to the same
land, his knowledge of
that
prior
unregistered interest
has the effect of
registration
as
to
him. The
torrens
system
cannot
be
used as a shield for
the commission of
fraud
(Gustillo
v.
Maravilla,
48
Phil.
442). As far as private
respondent
Zenaida
Angeles
and
her
husband
Justiniano
are concerned, the
non-registration
of
the affidavit admitting
their sale of a portion
of 110 square meters
of the subject land to
petitioners cannot be
invoked as a defense
because (K)nowledge
of an unregistered
sale is equivalent to

This
knowledge
of
the
conveyance to Honorato Hong can not
be denied. The records disclose that
after the sale, private respondent was
able to introduce improvements on the
land such as a concrete two-door
commercial building, a concrete fence
around the property, concrete floor of
the whole area and G.I. roofing. Acts of
ownership
and
possession
were
exercised by the private respondent
over the land. By these overt acts, it
can not therefore be gainsaid that
petitioner was not aware that private
respondent had a prior existing interest
over the land.[10]
In the case at bar, respondent averred in its
Motion to Release Property from Attachment that the
construction of a church edifice on the subject property
was about to be finished at the time the Writ of
Preliminary Attachment was implemented on 24 May
1993, and that the construction of the church was
actually completed by mid-1993.Respondent asserts that
since petitioner did not deny these allegations, much less
adduce evidence to the contrary, then the latter tacitly
recognized the construction of the church.
Petitioner contends, on the other hand, that
respondent failed to present evidence to prove the fact
that a church had already been constructed on the
subject property by the time the said property was
attached, thus, constituting notice to petitioner of the
claim or right of respondent to the same.
Was there, at the time of the attachment,
knowledge on the part of petitioner Rural Bank of the
interest of respondent Manila Mission on the subject
property?
If the allegation of respondent Manila Mission
anent the building of the chapel even before the issuance
of the writ of attachment is true, this case would be
similar to Ruizwhere the vendee of the subject property
was
able
to
introduce
improvements. However,
respondent Manila Mission presented no evidence of the
building of the chapel other than its bare allegation
thereof. More importantly, even assuming for the sake of
argument that the chapel was indeed being built at the
time of the attachment of the property, we cannot simply
apply Ruiz and conclude that this confirms knowledge of
a previous conveyance of the property at that
time. In Ruiz, the attaching party was the wife of the
vendor of the subject property, whom she sued for
support. It was thus very probable that she knew of the
sale of the property to the vendee therein, considering
that the vendee had already introduced improvements
thereon. In the case at bar, there is no special
relationship between petitioner Rural Bank and the

59
Page

registration
(Winkleman v. Veluz,
43 Phil. 604).

spouses Soliven sufficient to charge the former with an

implied knowledge of the state of the latters
properties. Unlike in the sale of real property, an
attaching creditor is not expected to inspect the property
being attached, as it is the sheriff who does the actual
act of attaching the property.
Neither did respondent Manila Mission present
any evidence of knowledge on the part of petitioner Rural
Bank of the prior existing interest of the former at the
time of the attachment. Respondent Manila Mission
merely argues that there was a tacit recognition on the
part of petitioner Rural Bank of the construction of the
chapel when the latter did not deny this allegation in its
Opposition to the Motion to Discharge Property from
Attachment.
The Motion, however, merely mentions the
construction of the chapel and does not charge petitioner
Rural Bank with knowledge of the construction. There
was, therefore, nothing to deny on the part of petitioner
Rural Bank, as the mere existence of such construction at
that time would not affect the right of petitioner Rural
Bank to its lien over the subject property. Also, the
mention in the Motion of the construction of the chapel
would have the effect of being a notice of an adverse
third-party claim only at the time of such Motion. Since
such notice, which was deemed in Ruiz as constructive
registration of the sale, was effected only after the
attachment of the subject property, it could not affect the
validity of the attachment lien.
In sum, our decisions in Ruiz v. Court of
Appeals and Valdevieso v. Damalerio oblige us to rule
that the duly registered levy on attachment by petitioner
Rural Bank takes preference over the prior but then
unregistered sale of respondent Manila Mission. There
was likewise no evidence of knowledge on the part of
petitioner Rural Bank of any third-party interest in the
subject property at the time of the attachment. We are,
therefore, constrained to grant the instant Petition for
Review and nullify the Orders of the RTC discharging the
subject property from attachment.
Nevertheless, respondent Manila Mission would
not be left without remedy. It could file a counter-bond
pursuant to Section 12, Rule 57 [11] of the Rules of Court
in order to discharge the attachment. If respondent
Manila Mission fails to do the same and the property ends
up being subjected to execution, respondent can redeem
the property and seek reimbursement from the spouses
Soliven.
WHEREFORE, the instant Petition for Review
on Certiorari is hereby GRANTED. The Decision dated 29
July 1997 of the Court of Appeals in CA-G.R. SP No.
41042
affirming
the
Orders
of
the Regional Trial Court of Dagupan City dated 9 October
1995 and 27 February 1996 issued in Civil Case No. D10583
is
hereby REVERSED and SET
ASIDE. No
pronouncement as to costs.
SO ORDERED.