G.R. No. 190106 Case Digest

G.R. No. 190106, January 15, 2014

Magdalena Villasi

vs Filomeno Garcia, substituted by his heirs

Ponente: Perez

Facts:

In 1990, Villasi engaged the services of Fil-Garcia Construction, Inc to construct a 7-storey condominium building in QC. For failure to fully pay, FGCI initiated a suit for collection of sum of money. Villasi filed an answer n=denying the lateral allegations of the complaint, averring that she delivered the total amount but FGCI accomplished only 28% of the construction. RTC ruled in favor of FGCI.

Villasi appealed with CA, CA reversed the judgment of RTC. FGCI filed a petition for review on Certiorari, but CA denied the appeal for being filed out of time. To satisfy the CA judgment, the sheriff levied on a building registered under Garcia, then later a public auction was scheduled.

To forestall the execution, Garcia filed an affidavit of 3rd party claim to set aside the sale execution for they are the lawful owners of the building levied by the sheriff. Garcia claimed that the city assessor made a mistake in the assessment of the property levied. RTC suspend the execution.

Villasi filed a motion for reconsideration, but it was denied by RTC. Thus this instant petition.

Issue:

Whether CA erred in granting Villasi ownership of the property.

Held:

It is a basic principle of law that money judgments are enforceable only against the property incontrovertibly belonging to the judgment debtor, and if the property belonging to any third person is mistakenly levied upon to answer for another man’s indebtedness, such person has all the right to challenge the levy through any of the remedies provided for under the Rules of Court. The duty of the sheriff is to levy the property of the judgment debtor not that of a third person.

The right of a third-party claimant to file a terceria is founded on his title or right of possession. Corollary thereto, before the court can exercise its supervisory power to direct the release of the property mistakenly levied and the restoration thereof to its rightful owner, the claimant must first unmistakably establish his ownership or right of possession thereon.

Spouses Garcia failed to prove that they have a bona fide title to the building in question. Aside from their postulation that as title holders of the land, the law presumes them to be owners of the improvements built thereon, the Spouses Garcia were unable to adduce credible evidence to prove their ownership of the property. In contrast, Villasi was able to satisfactorily establish the ownership of FGCI thru the pieces of evidence she appended to her opposition.

Although tax declarations or realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind would be paying taxes for a property that is not in his actual or at least constructive possession. They constitute at least proof that the holder has a claim of title over the property.

Finally, the issue regarding the piercing of the veil of corporate fiction is irrelevant in this case. The Spouses Garcia are trying to protect FGCI from liability by asserting that they, not FGCI, own the levied property. The Spouses Garcia are asserting their separation from FGCI. FGCI, the judgment debtor, is the proven owner of the building. Piercing FGCI’s corporate veil will not protect FGCI from its judgment debt. Piercing will result in the identification of the Spouses Garcia as FGCI itself and will make them liable for FGCI’s judgment debt.

Sheriff is directed to proceed with the sale on execution.