Philippine Supreme Court Jurisprudence


Philippine Supreme Court Jurisprudence > Year 1988 > October 1988 Decisions > G.R. No. L-78391 October 21, 1988 - REPUBLIC OF THE PHIL. v. RAMON G. ENRIQUEZ:




PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. L-78391. October 21, 1988.]

REPUBLIC OF THE PHILIPPINES, Petitioner, v. RAMON G. ENRIQUEZ, Deputy Sheriff of Manila, Respondent.

The Solicitor General for Petitioner.

Sison, Ortiz & Associates for Petitioner.


SYLLABUS


1. TAXATION; CLAIMS OF GOVERNMENT BASED ON A TAX LIEN; SUPERIOR OVER WRIT OF EXECUTION ISSUED BY THE TRIAL COURT. — It is settled that the claim of the government predicated on a tax lien is superior to the claim of a private litigant predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal property but from the time the tax became due and payable. 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, Branch 31.

2. REMEDIAL LAW; CIVIL PROCEDURE; EXECUTION OF JUDGMENTS; EXTENDS ONLY TO PROPERTIES BELONGING TO JUDGMENT DEBTOR. — The power of the court in execution of judgments extends only to properties unquestionably belonging to the judgment debtor. Execution sales affect the rights of the judgment debtor only, and the purchaser in an auction sale acquires only such right as the judgment debtor had at the time of sale. It is also well-settled that the sheriff is not authorized to attach or levy on property not belonging to the judgment debtor.

3. ID.; ID.; ID.; THIRD PARTY CLAIM; PURPOSE OF THE RULE. — While it is correct for the Court of Appeals to declare that there are other remedies available to the government in connection with its tax claims, yet, the filing of a separate action, in accordance with Section 17, Rule 39, of the Rules of Court would only delay final satisfaction of the tax liabilities of the Maritime Company of the Philippines. The purpose of said rule is to afford a claimant an opportunity to vindicate his ownership over the property levied upon by the sheriff.


D E C I S I O N


PADILLA, J.:


Appeal by way of certiorari from the decision ** of the Court of Appeals in CA-G.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.chanrobles lawlibrary : rednad

On 28 January 1985, the petitioner, through the Commissioner of Internal Revenue, served a Warrant of Distraint of Personal Property on the Maritime Company of the. Philippines to satisfy various deficiency taxes of said company in the total amount of P17,284,882.45, pursuant to unappealed and final tax assessments. 1 On 16 April 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 Commissioner of Internal Revenue of several barges, vehicles and two (2) bodegas of spare parts belonging to the taxpayer (Maritime Company of the Philippines). 2 On 4 October 1985, the corresponding Notice of Seizure of Personal Property, a copy of which was received by a representative of the Maritime Company of the Philippines, was issued by the Commissioner of Internal Revenue. 3 Among the properties seized were six (6) barges, Barge MCP-1 to Barge MCP-6.chanrobles.com.ph : virtual law library

On 11 June 1986, respondent sheriff levied on two (2) barges of the Maritime Company of the Philippines, pursuant to a writ of execution issued on 19 February 1986 by the Regional Trial Court of Manila, Branch 31, in Civil Case No. 85-30134, entitled "Genstar Container Corporation v. Maritime Company of the Philippines", in favor of the plaintiff therein. Respondent sheriff scheduled a public auction sale, of the levied barges on 23 June 1986. The barges, particularly Barge MCP-1 and Barge MCP-4, were among the aforementioned properties distrained and seized by petitioner, through the Commissioner of Internal Revenue.

On 18 June 1986, the Commissioner of Internal Revenue wrote respondent sheriff informing the latter that Barge MCP-1 and Barge MCP-4 were no longer owned by the Maritime Company of the Philippines as said barges had been distrained and seized by the Bureau of Internal Revenue in satisfaction of various deficiency taxes of Maritime Company of the Philippines, thereby registering its adverse claim over said barges. The letter, together with the affidavit of adverse claim and other supporting papers, was filed on 19 June 1986 at the office of respondent deputy sheriff and was received by one "Zenriquez, 6-19-86, Staff II." 4

On 23 June 1986, respondent deputy sheriff sold at public auction the two (2) barges, MCP-1 and MCP-4, and issued the corresponding sheriffs certificate of sale on the same date to the highest bidder which was the levying creditor.

On 24 July 1986, petitioner filed before the Court of Appeals the aforementioned petition for prohibition with preliminary injunction, alleging that respondent sheriff, Ramon G. Enriquez, acted in excess of his authority or 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 connection with the execution and that respondent’s notice of levy be declared null and void.

In its decision, dated 30 April 1987, the Court of Appeals dismissed the petition after finding that" (H)e appears to have acted in accordance with law and in keeping with his duties. There is no perceived abuse of authority or grave abuse of discretion." Hence, this appeal.

The only issue to be resolved in this appeal is the validity and effectiveness of the BIR warrant of distraint and notice of seizure of personal property as against the writ of execution issued by the Regional Trial Court and the levy on execution and auction sale of the barges in question.

It is settled that the claim of the government predicated on a tax lien is superior to the claim of a private litigant predicated on a judgment. The tax lien attaches not only from the service of the warrant of distraint of personal 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, Branch 31. There is no question then that at the time the writ of execution was issued, the two (2) barges, MCP-1 and MCP-4, were no longer properties of the Maritime Company of the Philippines. The power of the court in execution of judgments extends only to properties unquestionably belonging to the judgment debtor. Execution sales affect the rights of the judgment debtor only, and the purchaser in an auction sale acquires only such right as the judgment debtor had at the time of sale. It is also well-settled that the sheriff is not authorized to attach or levy on property not belonging to the judgment debtor. 6

While it is correct for the Court of Appeals to declare that there are other remedies available to the government in connection with its tax claims, yet, the filing of a separate action, in accordance with Section 17, Rule 39, of the Rules of Court would only delay final satisfaction of the tax liabilities of the Maritime Company of the Philippines. The purpose of said rule is to afford a claimant an opportunity to vindicate his ownership over the property levied upon by the sheriff. In the case at bar, however, there is no further need for petitioner to establish its rights over the two (2) barges in question as the evidence on record clearly proves that the barges are under distraint and, in fact, seized by petitioner, through the Commissioner of Internal Revenue, in satisfaction of various final deficiency taxes of the Maritime Company of the Philippines.chanrobles law library : red

The Court of Appeals gave much weight to the claim of respondent sheriff that he was unaware of any adverse claim over the subject barges. This claim is belied by receipt in the office of respondent by one "Zenriquez, 6-19-86, Staff II" of the letter dated 18 June 1986, from the Commissioner of Internal Revenue informing respondent that the two (2) barges were under distraint and no longer owned by the Maritime Company of the Philippines. It was incumbent upon respondent to have reminded members of his staff to notify him immediately of important communications or papers affecting the discharge of his official duties. Proof of due receipt by respondent’s office of the petitioner’s adverse claim prevails over respondent’s denial thereof. It was not necessary that respondent’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 staff on 19 June 1986 when the BIR Commissioner’s letter registering the petitioner’s adverse claim to the subject barges, was received in respondent’s office.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

WHEREFORE, the instant petition is GRANTED. The appealed decision is SET ASIDE. The notice of levy upon as well as execution sale of Barges MCP-1 and MCP-4 are ANNULLED and the respondent is ENJOINED from further proceeding with their sale in Civil Case No. 85-30134 of the Regional Trial Court of Manila, Branch 31.

In the event that the execution sale, having been consummated, results in non-recovery of the aforesaid barges, respondent is ordered to remit to the Bureau of Internal Revenue the proceeds of the execution sale of said barges, to be applied in partial satisfaction of the tax liabilities of Maritime Company of the Philippines to the Philippine government.

SO ORDERED.

Melencio-Herrera, Paras, Sarmiento and Regalado, JJ., concur.

Endnotes:



* * Ponente: Justice Alfredo L. Benipayo; concurring; Justices Lorna S. Lombos-dela Fuente and Ricardo J. Francisco.

1. Rollo, p. 49.

2. Id., p. 50.

3. Id., p. 43.

4. Id., pp. 46-48.

5. Hongkong & Shanghai Banking Corporation v. Rafferty, 39 Phil. 145; Bucoy v. Torrejos, 62 Phil. 831.

6. Sampaguita Pictures, Inc. v. Jalwindor Manufacturers, Inc., 93 SCRA 420; Bayer Philippines, Inc. v. Agana, 63 SCRA 355.




Back to Home | Back to Main


chanrobles.com



ChanRobles On-Line Bar Review

ChanRobles Internet Bar Review : www.chanroblesbar.com





October-1988 Jurisprudence                 

  • G.R. No. L-25350 October 4, 1988 - WILLIAM A. CHITTICK v. COURT OF APPEALS, ET AL.

  • G.R. No. L-38039 October 4, 1988 - GENEROSA CAWIT, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. L-67785 October 4, 1988 - PEOPLE OF THE PHIL. v. FEDERICO CAPINPIN, JR., ET AL.

  • A.M. No. 3005 October 5, 1988 - EMILIA P. FORNILDA-OLILI v. SERGIO I. AMONOY, ET AL.

  • A.M. No. 88-7-1861-RTC October 5, 1988 - IN RE: RODOLFO U. MANZANO

  • G.R. No. L-36549 October 5, 1988 - FAR EAST REALTY INVESTMENT, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. L-40324 October 5, 1988 - JOSE O. SIA v. COURT OF APPEALS, ET AL.

  • G.R. No. L-51625 October 5, 1988 - FRANCISCO DUMLAO v. COURT OF APPEALS, ET AL.

  • G.R. No. L-70458 October 5, 1988 - BENJAMIN SALVOSA, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-72306 October 5, 1988 - DAVID P. FORNILDA, ET AL. v. REGIONAL TRIAL COURT IVTH JUDICIAL REGION, PASIG, ET AL.

  • G.R. No. L-75927 October 5, 1988 - LAND AND HOUSING DEVELOPMENT CORP., ET AL. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. Nos. 79690-707 October 7, 1988 - ENRIQUE A. ZALDIVAR v. HON. SANDIGANBAYAN, ET AL.

  • G.R. No. L-32215 October 17, 1988 - PEOPLE OF THE PHIL. v. SANTIAGO O. TAÑADA

  • G.R. No. L-68117 October 17, 1988 - HEIRS OF FELINO T. SANTIAGO v. MANUEL M. LAZARO, ET AL.

  • G.R. No. L-39299 October 18, 1988 - ISAAC PANGAN, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. L-41380 October 18, 1988 - ORLANDO LAGAZON v. VISIA P. REYES

  • G.R. No. L-44696 October 18, 1988 - JULIAN ESPIRITU v. COURT OF FIRST INSTANCE OF CAVITE, ET AL.

  • G.R. No. L-46843 October 18, 1988 - VIRGILIA CABRESOS, ET AL. v. MEYNARDO A. TIRO, ET AL.

  • G.R. No. L-50872 October 18, 1988 - PEOPLE OF THE PHIL. v. ROBERTO PARAGOSO

  • G.R. No. L-53552 October 18, 1988 - PHILIPPINE LONG DISTANCE TELEPHONE COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. L-55377 October 18, 1988 - BENJAMIN DEL ROSARIO, ET AL. v. CECILIO F. BALAGOT, ET AL.

  • G.R. No. L-61961 October 18, 1988 - PEOPLE OF THE PHIL. v. NICOLAS MARCIALES, ET AL.

  • G.R. No. L-69679 October 18, 1988 - VIOLETA CABATBAT LIM, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-69723 October 18, 1988 - APEX INVESTMENT AND FINANCING CORP., ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-70836 October 18, 1988 - PEOPLE OF THE PHIL. v. TIMOTEO M. TOLENTINO

  • G.R. No. L-74675 October 18, 1988 - PEOPLE OF THE PHIL. v. JUAN REYES

  • G.R. No. 75198 October 18, 1988 - SCHMID & OBERLY, INC. v. RJL MARTINEZ FISHING CORP.

  • G.R. No. 75311 October 18, 1988 - ROSITA ZAFRA BANTILLO v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-75336 October 18, 1988 - ANTONIO BORNALES, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-76633 October 18, 1988 - EASTERN SHIPPING LINES, INC. v. PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, ET AL.

  • G.R. No. L-77242 October 18, 1988 - ROMEO ZOLETA v. FRANKLIN DRILON, ET AL.

  • G.R. No. L-77278 October 18, 1988 - IN RE: FELLY LEE FONG SHENG v. REPUBLIC OF THE PHIL.

  • G.R. No. L-78133 October 18, 1988 - MARIANO P. PASCUAL, ET AL. v. COMMISSIONER OF INTERNAL REVENUE, ET AL.

  • G.R. No. L-79237 October 18, 1988 - UNIVERSITY OF SAN CARLOS, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. L-80231 October 18, 1988 - CELSO A. FERNANDEZ v. COURT OF APPEALS, ET AL.

  • G.R. No. L-82811 October 18, 1988 - CONSOLIDATED PLYWOOD INDUSTRIES, INC. v. AUGUSTO B. BREVA, ET AL.

  • G.R. No. L-57937 October 21, 1988 - WILFREDO R. ANTONIO v. SANDIGANBAYAN

  • G.R. No. L-64673 October 21, 1988 - A. CONSTEEL CONSTRUCTION COMPANY, INC. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-78391 October 21, 1988 - REPUBLIC OF THE PHIL. v. RAMON G. ENRIQUEZ

  • G.R. No. L-83996 October 21, 1988 - CITY FISCAL OF TACLOBAN v. PEDRO S. ESPINA, ET AL.

  • G.R. Nos. L-71404-09 October 26, 1988 - HERMILO RODIS, SR. v. SANDIGANBAYAN, ET AL.

  • G.R. No. L-73199 October 26, 1988 - RENATO SARA, ET AL. v. CERILA AGARRADO, ET AL.

  • G.R. No. L-76737 October 27, 1988 - PANFILO OLIVA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. L-81470 October 27, 1988 - PEOPLE OF THE PHIL. v. VIRGILIO TUNHAWAN

  • G.R. No. L-83767 October 27, 1988 - FIRDAUSI SMAIL ABBAS, ET AL. v. SENATE ELECTORAL TRIBUNAL

  • G.R. No. L-84592 October 27, 1988 - ESTHER E. CUERDO v. COMMISSION ON AUDIT

  • G.R. No. L-39008 October 28, 1988 - PEDRO BAUTISTA, ET AL. v. MUNICIPALITY OF SAN JACINTO, ET AL.

  • G.R. No. L-49535 October 28, 1988 - ROMANA M. CRUZ v. FRANCISCO TANTUICO, ET AL.

  • G.R. No. L-51745 October 28, 1988 - RAMON F. SAYSON v. PEOPLE OF THE PHIL., ET AL.

  • G.R. No. L-55188 October 28, 1988 - JESUS LONTOC v. MINISTRY OF LABOR, ET AL.

  • G.R. No. L-60674 October 28, 1988 - PEOPLE OF THE PHIL. v. PUTITO CAFE

  • G.R. No. L-62341 October 28, 1988 - JORGE WEE SIT, ET AL. v. OMAR U. AMIN, ET AL.

  • G.R. No. L-69875 October 28, 1988 - BATANGAS LAGUNA TAYABAS BUS COMPANY v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. L-71177 October 28, 1988 - ERECTORS, INC. v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. L-72281 October 28, 1988 - MACARIO LAGMAN, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-72622 October 28, 1988 - VICTOR TORNO, ET AL. v. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. L-75955 October 28, 1988 - MARIA LINDA FUENTES v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. L-76991 October 28, 1988 - HERMENEGILDO L. SANTOS v. NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. L-77206 October 28, 1988 - PEOPLE OF THE PHIL. v. RAMON M. SOLOMON, ET AL.

  • G.R. No. L-79043 October 28, 1988 - DOMINGO T. ARCEGA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. L-79369-70 October 28, 1988 - PEOPLE OF THE PHIL. v. ALEXANDER A. QUIDILLA

  • G.R. No. L-79958 October 28, 1988 - EMILIANA BAUTISTA, ET AL. v. CAROLINA C. GRIÑO-AQUINO, ET AL.