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78391

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RepublicofthePhilippines
SUPREMECOURT
Manila

SECONDDIVISION

G.R.No.78391October21,1988

REPUBLICOFTHEPHILIPPINES,petitioner,
vs.
RAMONG.ENRIQUEZ,DeputySheriffofManila,respondent.

TheSolicitorGeneralforpetitioner.

Sison,Ortiz&Associatesforpetitioner.

PADILLA,J.:

Appealbywayofcertiorarifromthedecision * of the Court of Appeals in CAG.R. SP. No. 09582, dated 30 April 1987, dismissing the
petition for prohibition with preliminary injunction, filed by petitioner Republic of the Philippines against respondent Ramon G. Enriquez, Deputy Sheriff of
Manila.

On28January1985,thepetitioner,throughtheCommissionerofInternalRevenue,servedaWarrantofDistraint
of Personal Property on the Maritime Company of the. Philippines to satisfy various deficiency taxes of said
companyinthetotalamountofP17,284,882.45,pursuanttounappealedandfinaltaxassessments. 1On16April
1985, a Receipt for Goods, and Things Seized Under Authority of the National Internal Revenue Code was executed,
wherein Headquarters, First Coast Guard District, Farola Compound, Binondo, Manila, acknowledged receipt from the
CommissionerofInternalRevenueofseveralbarges,vehiclesandtwo(2)bodegasofsparepartsbelongingtothetaxpayer
(MaritimeCompanyofthePhilippines). 2 On 4 October 1985, the corresponding Notice of Seizure of Personal Property, a
copy of which was received by a respresentative of the Maritime Company of the Philippines, was issued by the
CommissionerofInternalRevenue.3Amongthepropertiesseizedweresix(6)barges,BargeMCP1toBarge
MCP6.

On 11 June 1986, respondent sheriff levied on two (2) barges of the Maritime Company of the Philippines,
pursuanttoawritofexecutionissuedon19February1986bytheRegionalTrialCourtofManila,Branch31,in
Civil Case No. 8530134, entitled "Genstar Container Corporation vs. Maritime Company of the Philippines", in
favoroftheplaintifftherein.Respondentsheriffscheduledapublicauctionsale,oftheleviedbargeson23June
1986. The barges, particularly Barge MCP1 and Barge MCP4, were among the aforementioned properties
distrainedandseizedbypetitioner,throughtheCommissionerofInternalRevenue.

On18June1986,theCommissionerofInternalRevenuewroterespondentsheriffinformingthelatterthatBarge
MCP1andBargeMCP4werenolongerownedbytheMaritimeCompanyofthePhilippinesassaidbargeshad
been distrained and seized by the Bureau of Internal Revenue in satisfaction of various deficiency taxes of
MaritimeCompanyofthePhilippines,therebyregisteringitsadverseclaimoversaidbarges.Theletter,together
with the affidavit of adverse claim and other supporting papers, was filed on 19 June 1986 at the office of
respondentdeputysheriffandwasreceivedbyoneZenriquez,61986,StaffII."4

On23June1986,respondentdeputysheriffsoldatpublicauctionthetwo(2)barges,MCP1andMCP4,and
issuedthecorrespondingsheriffscertificateofsaleonthesamedatetothehighestbidderwhichwasthelevying
creditor.On24July1986,petitionerfiledbeforetheCourtofAppealstheaforementionedpetitionforprohibition
withpreliminaryinjunction,allegingthatrespondentsheriff,RamonG.Enriquez,actedinexcessofhisauthorityor
with grave abuse of discretion when he levied on execution and subsequently auctioned the abovesaid two (2)
barges which were the subject of a warrant of distraint and notice of seizure by the Commissioner of Internal
Revenue. Petitioner prayed that respondent be ordered to desist and refrain from further proceedings in
connectionwiththeexecutionandthatrespondent'snoticeoflevybedeclarednullandvoid.

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Initsdecision,dated30April1987,theCourtofAppealsdismissedthepetitionafterfindingthat"(H)eappearsto
have acted in accordance with law and in keeping with his duties. There is no perceived abuse of authority or
graveabuseofdiscretion."Hence,thisappeal.

The only issue to be resolved in this appeal is the validity and effectiveness of the BIR warrant of distraint and
noticeofseizureofpersonalpropertyasagainstthewritofexecutionissuedbytheRegionalTrialCourtandthe
levyonexecutionandauctionsaleofthebargesinquestion.

Itissettledthattheclaimofthegovernmentpredicatedonataxlienissuperiortotheclaimofaprivatelitigant
predicatedonajudgment.Thetaxlienattachesnotonlyfromtheserviceofthewarrantofdistraintofpersonal
property but from the time the tax became due and payable. 5 Besides, the distraint on the subject properties of
Maritime Company of the Philippines as well as the notice of their seizure were made by petitioner, through the
Commissioner of Internal Revenue, long before the writ of execution was issued by the Regional Trial Court of Manila,
Branch31.Thereisnoquestionthenthatatthetimethewritofexecutionwasissued,thetwo(2)barges,MCP1andMCP
4,werenolongerpropertiesoftheMaritimeCompanyofthePhilippines.Thepowerofthecourtinexecutionofjudgments
extends only to properties unquestionably belonging to the judgment debtor. Execution sales affect the rights of the
judgmentdebtoronly,andthepurchaserinanauctionsaleacquiresonlysuchrightasthejudgmentdebtorhadatthetime
of sale. It is also wellsettled that the sheriff is not authorized to attach or levy on property not belonging to the judgment
debtor.6

WhileitiscorrectfortheCourtofAppealstodeclarethatthereareotherremediesavailabletothegovernmentin
connectionwithitstaxclaims,yet,thefilingofaseparateaction,inaccordancewithSection17,Rule39,ofthe
RulesofCourtwouldonlydelayfinalsatisfactionofthetaxliabilitiesoftheMaritimeCompanyofthePhilippines.
Thepurposeofsaidruleistoaffordaclaimantanopportunitytovindicatehisownershipoverthepropertylevied
uponbythesheriff.Inthecaseatbar,however,thereisnofurtherneedforpetitionertoestablishitsrightsover
thetwo(2)bargesinquestionastheevidenceonrecordclearlyprovesthatthebargesareunderdistraintand,in
fact,seizedbypetitioner,throughtheCommissionerofInternalRevenue,insatisfactionofvariousfinaldeficiency
taxesoftheMaritimeCompanyofthePhilippines.

TheCourtofAppealsgavemuchweighttotheclaimofrespondentsheriffthathewasunawareofanyadverse
claimoverthesubjectbarges.Thisclaimisbeliedbyreceiptintheofficeofrespondentbyone"Zenriquez,619
86,StaffII"oftheletterdated18June1986,fromtheCommissionerofInternalRevenueinformingrespondent
thatthetwo(2)bargeswereunderdistraintandnolongerownedbytheMaritimeCompanyofthePhilippines.It
was incumbent upon respondent to have reminded members of his staff to notify him immediately of important
communicationsorpapersaffectingthedischargeofhisofficialduties.Proofofduereceiptbyrespondent'soffice
ofthepetitioner'sadverseclaimprevailsoverrespondent'sdenialthereof.Itwasnotnecessarythatrespondent's
personal receipt of the BIR Commissioner's letter be shown on the face of the letter. It is standard operating
procedure in government offices to maintain log books which record the inward and outward flow of official
documents and papers. Besides, respondent never denied that Zenriquez Staff II" was a member of his office
staffon19June1986whentheBIRCommissioner'sletterregisteringthepetitioner'sadverseclaimtothesubject
barges,wasreceivedinrespondent'soffice.

WHEREFORE,theinstantpetitionisGRANTED,TheappealeddecisionisSETASIDE.Thenoticeoflevyuponas
well as execution sale of Barges MCP1 and MCP4 are ANNULLED and the respondent is ENJOINED from
furtherproceedingwiththeirsaleinCivilCaseNo.8530134oftheRegionalTrialCourtofManila,Branch31.

Intheeventthattheexecutionsale,havingbeenconsummated,resultsin
nonrecovery of the aforesaid barges, respondent is ordered to remit to the Bureau of Internal Revenue the
proceedsoftheexecutionsaleofsaidbarges,tobeappliedinpartialsatisfactionofthetaxliabilitiesofMaritime
CompanyofthePhilippinestothePhilippinegovernment.

SOORDERED.

MelencioHerrera(Chairman),Paras,SarmientoandRegalado,JJ.,concur.

Footnotes

*Ponente:JusticeAlfredoL.BenipayoconcurringJusticesLornaS.LombosdelaFuenteand
RicardoJ.Francisco.

1Rollo,p.49.

2Id.,P.50.

3Id.,p.43.

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4Id.,pp.4648.

5Hongkong&ShanghaiBankingCorporationv.Raffety,39Phil.145Bucoyv.Torrejos,62Phil.831.

6SampaguitaPictures,Inc.v.JalwindorManufacturers,Inc.,93SCRA420BayerPhilippines,Inc.v.
Agana,63SCRA355.

TheLawphilProjectArellanoLawFoundation

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