SECOND DIVISION

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

MAGDALENA T. VILLASI , petitioner, vs . FILOMENO GARCIA,

substituted by his heirs, namely, ERMELINDA H. GARCIA, LIZA
GARCIA-GONZALEZ, THERESA GARCIA-TIANGSON, MARIVIC H.
GARCIA, MARLENE GARCIA-MOMIN, GERARDO H. GARCIA, GIDEON
H. GARCIA and GENEROSO H. GARCIA, and ERMELINDA H. GARCIA ,
respondents.

DECISION

PEREZ , J : p

This is a Petition for Review on Certiorari 1 led pursuant to Rule 45 of the Revised Rules of
Court, assailing the 19 May 2009 Decision 2 rendered by the Sixth Division of the Court of
Appeals in CA-G.R. SP No. 92587. The appellate court af rmed the Order 3 of the Regional
Trial Court (RTC) of Quezon City, Branch 77, directing the Deputy Sheriff to suspend the
conduct of the execution sale of the buildings levied upon by him.
The Facts
Sometime in 1990, petitioner Magdalena T. Villasi (Villasi) engaged the services of
respondent Fil-Garcia Construction, Inc. (FGCI) to construct a seven-storey condominium
building located at Aurora Boulevard corner N. Domingo Street, Cubao, Quezon City. For
failure of Villasi to fully pay the contract price despite several demands, FGCI initiated a
suit for collection of sum of money before the RTC of Quezon City, Branch 77. In its action
docketed as Civil Case No. Q-91-8187, FGCI prayed, among others, for the payment of the
amount of P2,865,000.00, representing the unpaid accomplishment billings. Served with
summons, Villasi led an answer speci cally denying the material allegations of the
complaint. Contending that FGCI has no cause of action against her, Villasi averred that
she delivered the total amount of P7,490,325.10 to FGCI but the latter accomplished only
28% of the project. After the pre-trial conference was terminated without the parties
having reached an amicable settlement, trial on the merits ensued.
Finding that FGCI was able to preponderantly establish by evidence its right to the unpaid
accomplishment billings, the RTC rendered a Decision 4 dated 26 June 1996 in FGCI's
favor. While the trial court brushed aside the allegation of Villasi that an excess payment
was made, it upheld the claim of FGCI to the unpaid amount of the contract price and, thus,
disposed:
WHEREFORE, judgment is hereby rendered: ISCTcH

1. Ordering [Villasi] to pay [FGCI] the sum of P2,865,000.00 as actual

damages and unpaid accomplishment billings;

2. Ordering [Villasi] to pay [FGCI] the amount of P500,000.00 representing the

value of unused building materials;
3. Ordering [Villasi] to pay [FGCI] the amount of P100,000.00, as moral
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 damages and P100,000.00 as attorney's fees. 5

Elevated on appeal and docketed as CA-G.R. CV No. 54750, the Court of Appeals reversed
the disquisition of the RTC in its Decision 6 dated 20 November 2000. The appellate court
ruled that an overpayment was made by Villasi and thereby directed FGCI to return the
amount that was paid in excess, viz.:
WHEREFORE, premises considered, the present appeal is hereby GRANTED and
the appealed decision in Civil Case No. Q-91-8187 is hereby REVERSED and SET
ASIDE and judgment is hereby rendered ordering the [FGCI] to return to [Villasi] the
sum of P1,244,543.33 as overpayment under their contract, and the further sum
of P425,004.00 representing unpaid construction materials obtained by it from
[Villasi]. [FGCI] is likewise hereby declared liable for the payment of liquidated
damages in the sum equivalent to 1/10 of 1% of the contract price for each day
of delay computed from March 6, 1991.

No pronouncement as to costs. 7 ICTaEH

Unrelenting, FGCI led a Petition for Review on Certiorari before this Court, docketed as
G.R. No. 147960, asseverating that the appellate court erred in rendering the 20 November
2000 Decision. This Court, however, in a Resolution dated 1 October 2001, denied the
appeal for being led out of time. The said resolution became nal and executory on 27
November 2001, as evidenced by the Entry of Judgment 8 made herein.
To enforce her right as prevailing party, Villasi led a Motion for Execution of the 20
November 2000 Court of Appeals Decision, which was favorably acted upon by the RTC. 9
A Writ of Execution was issued on 28 April 2004, commanding the Sheriff to execute and
make effective the 20 November 2000 Decision of the Court of Appeals. SDITAC

To satisfy the judgment, the sheriff levied on a building located at No. 140 Kalayaan
Avenue, Quezon City, covered by Tax Declaration No. D-021-01458, and built in the lots
registered under Transfer Certi cates of Title (TCT) Nos. 379193 and 379194. While the
building was declared for taxation purposes in the name of FGCI, the lots in which it was
erected were registered in the names of the Spouses Filomeno Garcia and Ermelinda Halili-
Garcia (Spouses Garcia). After the mandatory posting and publication of notice of sale on
execution of real property were complied with, a public auction was scheduled on 25
January 2006.
To forestall the sale on execution, the Spouses Garcia led an Af davit of Third Party
Claim 1 0 and a Motion to Set Aside Notice of Sale on Execution, 1 1 claiming that they are
the lawful owners of the property which was erroneously levied upon by the sheriff. To
persuade the court a quo to grant their motion, the Spouses Garcia argued that the
building covered by the levy was mistakenly assessed by the City Assessor in the name of
FGCI. The motion was opposed by Villasi who insisted that its ownership belongs to FGCI
and not to the Spouses Garcia as shown by the tax declaration.
After weighing the arguments of the opposing parties, the RTC issued on 24 February
2005 an Order 1 2 directing the Sheriff to hold in abeyance the conduct of the sale on
execution, to wit:
WHEREFORE, premises considered, the Court hereby orders Deputy Sheriff Angel
Doroni to suspend or hold in abeyance the conduct of the sale on execution of the
buildings levied upon by him, until further orders from the Court. 1 3

The motion for reconsideration of Villasi was denied by the trial court in its 11 October
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 2005 Order. 1 4
Arguing that the RTC gravely abused its discretion in ordering the suspension of the sale
on execution, Villasi timely led a Petition for Certiorari before the Court of Appeals. In a
Decision 1 5 dated 19 May 2009, the appellate court dismissed the petition. In a Resolution
1 6 dated 28 October 2009, the Court of Appeals refused to reconsider its decision.

Villasi is now before this Court via this instant Petition for Review on Certiorari assailing
the adverse Court of Appeals Decision and Resolution and raising the following issues: cCSTHA

The Issues
I.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY

ERRED IN UPHOLDING THE DECISION OF THE TRIAL COURT TO SUSPEND AND
HOLD IN ABEYANCE THE SALE ON EXECUTION OF THE BUILDINGS LEVIED
UPON ON THE BASIS OF RESPONDENTS' AFFIDAVIT OF THIRD-PARTY CLAIM[;]

II.

WHETHER OR NOT THE HONORABLE COURT OF APPEALS GRIEVOUSLY

ERRED WHEN IT HELD THAT THERE IS NO REASON TO PIERCE THE VEIL OF
[FGCI'S] CORPORATE FICTION IN THE CASE AT BAR[;] [AND]

III.

WHETHER OR NOT THE BRANCH SHERIFF OF THE REGIONAL TRIAL COURT OF

QUEZON CITY, BRANCH 77 SHOULD BE DIRECTED TO FILE THE APPROPRIATE
NOTICE OF LEVY WITH THE REGISTER OF DEEDS OF QUEZON CITY. 1 7

The Court's Ruling

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. Section 16, 1 8 Rule 39 speci cally provides that a third person
may avail himself of the remedies of either terceria, to determine whether the sheriff has
rightly or wrongly taken hold of the property not belonging to the judgment debtor or
obligor, or an independent "separate action" to vindicate his claim of ownership and/or
possession over the foreclosed property. However, the person other than the judgment
debtor who claims ownership or right over levied properties is not precluded from taking
other legal remedies to prosecute his claim. 1 9
Indeed, 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. 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. 2 0
Claiming that the sheriff mistakenly levied the building that lawfully belongs to them, the
Spouses Garcia availed themselves of the remedy of terceria under Section 16, Rule 39 of
the Revised Rules of Court. To fortify their position, the Spouses Garcia asserted that as
the owners of the land, they would be deemed under the law as owners of the building
standing thereon. The Spouses Garcia also asserted that the construction of the building
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 was nanced thru a loan obtained from Metrobank in their personal capacities, and they
merely contracted FGCI to construct the building. Finally, the Spouses Garcia argued that
the tax declaration, based on an erroneous assessment by the City Assessor, cannot be
made as basis of ownership. cDHCAE

For her part, Villasi insists that the levy effected by the sheriff was proper since the subject
property belongs to the judgment debtor and not to third persons. To dispute the
ownership of the Spouses Garcia, Villasi pointed out that the levied property was declared
for tax purposes in the name of FGCI. A Certi cation issued by the Of ce of the City
Engineering of Quezon City likewise showed that the building permit of the subject
property was likewise issued in the name of FGCI.
We grant the petition.
The right of a third-party claimant to le 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 rst unmistakably establish his ownership or right of
possession thereon. In Spouses Sy v. Hon. Discaya , 2 1 we declared that for a third-party
claim or a terceria to prosper, the claimant must rst suf ciently establish his right on the
property:
[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 speci cally, 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 nality. 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 . 2 2 (emphasis
and underscoring supplied). SaTAED

Our perusal of the record shows that, as the party asserting their title, the Spouses Garcia
failed to prove that they have a bona de 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. Worthy to note is the fact that the building in litigation was declared for
taxation purposes in the name of FGCI and not in the Spouses Garcias'. While it is true that
tax receipts and tax declarations are not incontrovertible evidence of ownership, they
constitute credible proof of claim of title over the property. 2 3 In Buduhan v. Pakurao, 2 4 we
underscored the signi cance of a tax declaration as proof that a holder has claim of title,
and, we gave weight to the demonstrable interest of the claimant holding a tax receipt:
Although tax declarations or realty tax payment of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the
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 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. The
voluntary declaration of a piece of property for taxation purposes manifests not
only one's sincere and honest desire to obtain title to the property and announces
his adverse claim against the State and all other interested parties, but also the
intention to contribute needed revenues to the Government. Such an act
strengthens one's bona fide claim of acquisition of ownership. 2 5

It likewise failed to escape our attention that FGCI is in actual possession of the building
and as the payment of taxes coupled with actual possession of the land covered by tax
declaration strongly supports a claim of ownership. 2 6 Quite signi cantly, all the court
processes in an earlier collection suit between FGCI and Villasi were served, thru the
former's representative Filomeno Garcia, at No. 140 Kalayaan Avenue, Quezon City, where
the subject property is located. This circumstance is consistent with the tax declaration in
the name of FGCI.
The explanation proffered by the Spouses Garcia, that the City Assessor merely
committed an error when it declared the property for taxation purposes in the name of
FGCI, appears to be suspect in the absence of any prompt and serious effort on their part
to have it recti ed before the onset of the instant controversy. The correction of entry
belatedly sought by the Spouses Garcia is indicative of its intention to put the property
beyond the reach of the judgment creditor. Every prevailing party to a suit enjoys the
corollary right to the fruits of the judgment and, thus, court rules provide a procedure to
ensure that every favorable judgment is fully satis ed. 2 7 It is almost trite to say that
execution is the fruit and end of the suit. Hailing it as the "life of the law," ratio legis est
anima, 2 8 this Court has zealously guarded against any attempt to thwart the rigid rule and
deny the prevailing litigant his right to savour the fruit of his victory. 2 9 A judgment, if left
unexecuted, would be nothing but an empty triumph for the prevailing party. 3 0 IaEASH

While it is a hornbook doctrine that the accessory follows the principal, 3 1 that is, the
ownership of the property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or arti cially, 3 2 such
rule is not without exception. In cases where there is a clear and convincing evidence to
prove that the principal and the accessory are not owned by one and the same person or
entity, the presumption shall not be applied and the actual ownership shall be upheld. In a
number of cases, we recognized the separate ownership of the land from the building and
brushed aside the rule that accessory follows the principal.
In Carbonilla v. Abiera, 3 3 we denied the claim of petitioner that, as the owner of the land, he
is likewise the owner of the building erected thereon, for his failure to present evidence to
buttress his position:
To set the record straight, while petitioner may have proven his ownership of the
land, as there can be no other piece of evidence more worthy of credence than a
Torrens certi cate of title, he failed to present any evidence to substantiate his
claim of ownership or right to the possession of the building. Like the CA, we
cannot accept the Deed of Extrajudicial Settlement of Estate (Residential
Building) with Waiver and Quitclaim of Ownership executed by the Garcianos as
proof that petitioner acquired ownership of the building. There is no showing that
the Garcianos were the owners of the building or that they had any proprietary
right over it. Ranged against respondents' proof of possession of the building
since 1977, petitioner's evidence pales in comparison and leaves us totally
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 unconvinced. 3 4

In Caltex (Phil.), Inc. v. Felias , 3 5 we ruled that while the building is a conjugal property and
therefore liable for the debts of the conjugal partnership, the lot on which the building was
constructed is a paraphernal property and could not be the subject of levy and sale: DAaIEc

. . . . In other words, when the lot was donated to Felisa by her parents, as
owners of the land on which the building was constructed, the lot became her
paraphernal property. The donation transmitted to her the rights of a landowner
over a building constructed on it. Therefore, at the time of the levy and sale of
the sheriff, Lot No. 107 did not belong to the conjugal partnership, but it was
paraphernal property of Felisa. As such, it was not answerable for the
obligations of her husband which resulted in the judgment against him in favor
of Caltex. 3 6

The rule on accession is not an iron-clad dictum. On instances where this Court was
confronted with cases requiring judicial determination of the ownership of the building
separate from the lot, it never hesitated to disregard such rule. The case at bar is of similar
import. When there are factual and evidentiary evidence to prove that the building and the
lot on which it stands are owned by different persons, they shall be treated separately. As
such, the building or the lot, as the case may be, can be made liable to answer for the
obligation of its respective owner.
Finally, the issue regarding the piercing of the veil of corporate ction 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
identi cation of the Spouses Garcia as FGCI itself and will make them liable for FGCI's
judgment debt. aITECD

WHEREFORE , premises considered, the petition is GRANTED . The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. SP No. 92587 are hereby REVERSED and
SET ASIDE . The Deputy Sheriff is hereby directed to proceed with the conduct of the sale
on execution of the levied building.
SO ORDERED . IcHTAa

Carpio, Brion, Perlas-Bernabe and Leonen, * JJ., concur.

Footnotes

*Per Raffle dated 4 December 2013.

1.Rollo, pp. 10-38.
2.Penned by Associate Justice Ricardo R. Rosario with Associate Justices Jose L. Sabio, Jr.
and Vicente S. E. Veloso, concurring. Id. at 43-51.
3.Presided by Judge Vivencio S. Baclig. Id. at 104-106.
4.Presided by Judge Ignacio L. Salvador. Id. at 54-61.
5.Id. at 61.
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 6.Id. at 62-69.

7.Id. at 68-69.
8.Id. at 70.
9.Id. at 72-74.
10.Id. at 76-78.
11.Id. at 97-102.

12.Id. at 104-106.
13.Id. at 106.
14.Id. at 112.
15.Id. at 43-51.

16.Id. at 53.
17.Id. at 19.
18.Sec. 16 . Proceedings where property claimed by third person. If the property levied on is
claimed by any person other than the judgment obligor 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 the same upon the officer making the levy and
a copy thereof upon the judgment obligee, the officer shall not be bound to keep the
property, unless such judgment obligee, on demand of the officer, files a bond approved
by the court to indemnify the third-party claimant in a sum not less than the value of the
property levied on. In case of disagreement as to such value, the same shall be
determined by the court issuing the writ of execution. 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 officer shall not be liable for damages for the taking or keeping of the property, to any
third-party claimant if such bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the property in a separate
action, or prevent the judgment obligee from claiming damages in the same or a
separate action against a third-party claimant who filed a frivolous or plainly spurious
claim.
When the writ of execution 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
or levying officer is sued for damages as a result of the levy, 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 such funds as may be appropriated
for the purpose.
19.Gagoomal v. Villacorta, G.R. No. 192813, 18 January 2012, 663 SCRA 444, 454-455.
20.Corpus v. Pascua, A.M. No. P-11-2972, 28 September 2011, 658 SCRA 239, 248.
21.260 Phil. 401 (1990).
22.Id. at 406-407.

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 23.Director of Lands v. Intermediate Appellate Court, G.R. No. 68946, 22 May 1992, 209 SCRA
214, 227-228.
24.518 Phil. 285 (2006).
25.Id. at 296 citing Ganila v. Court of Appeals, 500 Phil. 212, 224 (2005).

26.Heirs of Marcelina Arzadon-Crisologo v. Raon, 559 Phil. 169, 187 (2007).

27.Solar Resources, Inc. v. Inland Trailways, Inc., 579 Phil. 548, 560 (2008).
28.The reason is its soul.
29.Florentino v. Rivera, 515 Phil. 494, 504 (2006).
30.Id. at 505.

31.Torbela v. Rosario, G.R. Nos. 140528 and 140553, 7 December 2011, 661 SCRA 633, 675.
32.New Civil Code, Art. 440. The ownership of property gives the right by accession to
everything which is produced thereby, or which is incorporated or attached thereto, either
naturally or artificially.
33.G.R. No. 177637, 26 July 2010, 625 SCRA 461.

34.Id. at 468.
35.108 Phil. 873 (1960).
36.Id. at 877.

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