G.R. No.

215933

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION

RULING:
The power of the court in executing judgments extends only to properties
unquestionably belonging to the judgment debtor alone. An execution can be
issued only against a party and not against one who did not have his day in
court.18 The duty of the sheriff is to levy the property of the judgment debtor not
that of a third person. For, as the saying goes, one man's goods shall not be sold
for another man's debts.
However, in Spouses Sy v. Hon. Discaya, we held that for the remedy of terceria to
prosper, the claim of ownership or right of possession to the levied property by the third-
party claimant must first be unmistakably established. A third person whose property
was seized by a sheriff to answer for the obligation of the judgment debtor may invoke
the supervisory power of the court which authorized such execution. Upon due
application by the third person and after summary hearing, the court may command that
the property be released from the mistaken levy and restored to the rightful owner or
possessor. What said court can do in these instances, however, is limited to a
determination of whether the sheriff has acted rightly or wrongly in the performance of
his duties in the execution of judgment, more specifically, if he has indeed taken hold of
property not belonging to the judgment debtor. The court does not and cannot pass
upon the question of title to the property, with any character of finality. It can treat of the
matter only insofar as may be necessary to decide if the sheriff has acted correctly or
not. It can require the sheriff to restore the property to the claimant's possession if
warranted by the evidence. However, if the claimant's proofs do not persuade the court
of the validity of his title or right of possession thereto, the claim will be denied.

Since the RTC denied the third-party claim for failure of petitioner to satisfactorily
establish its claim of ownership over the subject properties, the latter filed with the CA a
petition for certiorari assailing such denial and claimed that there is no plain, speedy
and adequate remedy in the ordinary course of law. The petition for certiorari was
dismissed by the CA for being a wrong remedy.

Dismissal was affirmed.

Notably, petitioner cannot appeal from the denial of its third-party claim since it is not
one of the parties in the action where the writ of execution was issued, as the unlawful
detainer case was between respondent and the NPC. Also, the denial of the third-party
claim is not appealable as provided under the above-quoted Section 16, Rule 39 of the
Rules of Court since the remedy of a third party claimant is to file a separate and
independent action to vindicate his claim of ownership or right of possession of the
levied properties against the judgment creditor or the purchaser of the property at the
public auction sale. It is in this separate and independent action that the issue of the
third-party claimant's title to the levied properties can be resolved with finality.

[ G.R. No. 137675, December 05, 2000 ]

RULING:
The "proper action" mentioned in Section 17 would have for its object the recovery of
ownership or possession of the property seized by the sheriff, as well as damages
resulting from the allegedly wrongful seizure and detention thereof despite the third
party claim and it may be brought against the sheriff and such other parties as may be
alleged to have colluded with him in the supposedly wrongful execution proceedings,
such as the judgment creditor himself. If instituted by a stranger to the suit in which
execution has issued, such "proper action" should be a totally separate and distinct
action from the former suit.

In addition to the filing of a "proper action," the third-party claimant may also avail of the
remedy known as "terceria," by executing an affidavit of his title or right of possession
over the property seized and serving the same upon the officer making the levy and the
judgment creditor. Thereafter, the officer shall not be bound to keep the property, unless
the judgment creditor or his agent indemnifies the officer against such claim by a bond
in a sum not greater than the value of the property levied on. An action for damages
may be brought against the officer within one hundred twenty (120) days from the date
of the filing of the bond.

These abovementioned remedies are cumulative and any one of them may be resorted
to by a third-party claimant without availing of the others. Thus, the availment of the
remedy of terceria is not a condition sine qua non to the filing of a "proper
action." An independent action may be resorted to even before or without need of
filing a claim in the court which issued the writ.
In the case at bar, petitioner filed an independent action for the annulment of the
certificate of sale issued in favor of private respondent, contending that the property
levied upon and sold to private respondent by virtue of the writ of execution issued in
Criminal Case No. 90-2645 was her exclusive property, not that of the judgment
obligor. Pursuant to our ruling in Sy v. Discaya, petitioner is deemed a stranger to the
action wherein the writ of execution was issued and is therefore justified in bringing an
independent action to vindicate her right of ownership over the subject property.

Contrary to the stand taken by the trial court, the filing of such an independent action
cannot be considered an encroachment upon the jurisdiction of a co-equal and
coordinate court. The court issuing the writ of execution may enforce its authority only
over properties of the judgment debtor; thus, the sheriff acts properly only when he
subjects to execution property undeniably belonging to the judgment debtor. If the
sheriff levies upon the assets of a third person in which the judgment debtor has no
interest, then he is acting beyond the limits of his authority and is amenable to control
and correction by a court of competent jurisdiction in a separate and independent
action. This is in consonance with the well-established principle that no man shall be
affected by any proceeding to which he is a stranger. Execution of a judgment can only
be issued against a party to the action, and not against one who has not yet had his day
in court.