Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 193517

January 15, 2014

THE HEIRS OF VICTORINO SARILI, NAMELY: ISABEL A. SARILI,* MELENCIA** S. MAXIMO,

ALBERTO A. SARILI, IMELDA S. HIDALGO, all herein represented by CELSO A.
SARILI, Petitioners,
vs.
PEDRO F. LAGROSA, represented in this act by his Attorney-in-Fact LOURDES LABIOS
MOJICA,Respondent.
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on Certiorari are the Decision dated May 20, 2010 and
Resolution dated August 26, 2010 of the Court of Appeals (CA) in CA-G.R. CV No. 76258 which: (a)
set aside the Decision dated May 27, 2002 of the Regional Trial Court of Caloocan City, Branch 131
(RTC) in Civil Case No. C-19152; (b) cancelled Transfer Certificate of Title (TCT) No. 262218 in the
name of Victorino Sarili (Victorino) married to Isabel Amparo (Sps. Sarili); (c) reinstated TCT No.
55979 in the name of respondent Pedro F. Lagrosa (respondent); and (d) awarded respondent
moral damages, attorneys fees and litigation expenses.
1

The Facts
On February 17, 2000, respondent, represented by his attorney-in-fact Lourdes Labios Mojica
(Lourdes) via a special power of attorney dated November 25, 1999 (November 25, 1999 SPA), filed
a complaint against Sps. Sarili and the Register of Deeds of Caloocan City (RD) before the RTC,
alleging, among others, that he is the owner of a certain parcel of land situated in Caloocan City
covered by TCT No. 55979 (subject property) and has been religiously paying the real estate taxes
therefor since its acquisition on November 29, 1974. Respondent claimed that he is a resident of
California, USA, and that during his vacation in the Philippines, he discovered that a new certificate
of title to the subject property was issued by the RD in the name of Victorino married to Isabel
Amparo (Isabel), i.e., TCT No. 262218, by virtue of a falsified Deed of Absolute Sale dated February
16, 1978 (February 16, 1978 deed of sale) purportedly executed by him and his wife, Amelia U.
Lagrosa (Amelia). He averred that the falsification of the said deed of sale was a result of the
fraudulent, illegal, and malicious acts committed by Sps. Sarili and the RD in order to acquire the
subject property and, as such, prayed for the annulment of TCT No. 262218, and that Sps. Sarili
deliver to him the possession of the subject property, or, in the alternative, that Sps. Sarili and the
RD jointly and severally pay him the amount of P1,000,000.00, including moral damages as well as
attorneys fees.
7

10

In their answer, Sps. Sarili maintained that they are innocent purchasers for value, having
purchased the subject property from Ramon B. Rodriguez (Ramon), who possessed and presented
a Special Power of Attorney (subject SPA) to sell/dispose of the same, and, in such capacity,
executed a Deed of Absolute Sale dated November 20, 1992 (November 20, 1992 deed of sale)
conveying the said property in their favor. In this relation, they denied any participation in the
preparation of the February 16, 1978 deed of sale, which may have been merely devised by the
"fixer" they hired to facilitate the issuance of the title in their names. Further, they interposed a
counterclaim for moral and exemplary damages, as well as attorneys fees, for the filing of the
baseless suit.
11

12

13

14

15

During the pendency of the proceedings, Victorino passed away and was substituted by his heirs,
herein petitioners.
16

17

The RTC Ruling

On May 27, 2002, the RTC rendered a Decision finding respondents signature on the subject SPA
as "the same and exact replica" of his signature in the November 25, 1999 SPA in favor of
Lourdes. Thus, with Ramons authority having been established, it declared the November 20, 1992
deed of sale executed by the latter as "valid, genuine, lawful and binding" and, as such, had validly
conveyed the subject property in favor of Sps. Sarili. It further found that respondent "acted with
evident bad faith and malice" and was, therefore, held liable for moral and exemplary
damages. Aggrieved, respondent appealed to the CA.
18

19

20

21

22

23

The CA Ruling
In a Decision dated May 20, 2010, the CA granted respondents appeal and held that the RTC erred
in its ruling since the November 20, 1992 deed of sale, which the RTC found "as valid and genuine,"
was not the source document for the transfer of the subject property and the issuance of TCT No.
262218 in the name of Sps. Sarili but rather the February 16, 1978 deed of sale, the fact of which
may be gleaned from the Affidavit of Late Registration executed by Isabel (affidavit of Isabel).
Further, it found that respondent w as "not only able to preponderate his claim over the subject
property, but [has] likewise proved that his and his wifes signatures in the [February 16, 1978 deed
of sale] x x x were forged." "[A] comparison by the naked eye of the genuine signature of
[respondent] found in his [November 25, 1999 SPA] in favor of [Lourdes], and those of his falsified
signatures in [the February 16, 1978 deed of sale] and [the subject SPA] shows that they are not
similar." It also observed that "[t]he testimony of [respondent] denying the authenticity of his
purported signature with respect to the [February 16, 1978 deed of sale] was not rebutted x x x." In
fine, the CA declared the deeds of sale dated February 16, 1978 and November 20, 1992, as well as
the subject SPA as void, and consequently ordered the RD to cancel TCT No. 262218 in the name of
Victorino married to Isabel, and consequently reinstate TCT No. 55979 in respondents name.
Respondents claims for moral damages and attorneys fees/litigation expenses were also granted
by the CA.
24

25

26

27

28

29

30

Dissatisfied, petitioners moved for reconsideration which was, however, denied in a

Resolution dated August 26, 2010, hence, the instant petition.
31

The Issues Before the Court

The main issue in this case is whether or not there was a valid conveyance of the subject property to
Sps. Sarili. The resolution of said issue would then determine, among others, whether or not: (a)
TCT No. 262218 in the name of Victorino married to Isabel should be annulled; and (b) TCT No.
55979 in respondents name should be reinstated.
The Courts Ruling
The petition lacks merit.
Petitioners essentially argue that regardless of the fictitious February 16, 1978 deed of sale, there
was still a valid conveyance of the subject property to Sps. Sarili who relied on the authority of
Ramos (as per the subject SPA) to sell the same. They posit that the due execution of the subject
SPA between respondent and Ramon and, subsequently, the November 20, 1992 deed of sale
between Victorino and Ramon were duly established facts and that from the authenticity and
genuineness of these documents, a valid conveyance of the subject land from respondent to
Victorino had leaned upon.
32

The Court is not persuaded.

It is well-settled that even if the procurement of a certificate of title was tainted with fraud and
misrepresentation, such defective title may be the source of a completely legal and valid title in the
hands of an innocent purchaser for value. Where innocent third persons, relying on the correctness
of the certificate of title thus issued, acquire rights over the property, the court cannot disregard such
rights and order the total cancellation of the certificate. The effect of such an outright cancellation
would be to impair public confidence in the certificate of title, for everyone dealing with property
registered under the Torrens system would have to inquire in every instance whether the title has
been regularly or irregularly issued. This is contrary to the evident purpose of the law.
33

The general rule is that every person dealing with registered land may safely rely on the correctness
of the certificate of title issued therefor and the law will in no way oblige him to go beyond the
certificate to determine the condition of the property. Where there is nothing in the certificate of title
to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the
purchaser is not required to explore further than what the Torrens Title upon its face indicates in
quest for any hidden defects or inchoate right that may subsequently defeat his right thereto.
34

However, a higher degree of prudence is required from one who buys from a person who is not the
registered owner, although the land object of the transaction is registered. In such a case, the buyer
is expected to examine not only the certificate of title but all factual circumstances necessary for him
to determine if there are any flaws in the title of the transferor. The buyer also has the duty to
ascertain the identity of the person with whom he is dealing with and the latters legal authority to
convey the property.
35

36

The strength of the buyers inquiry on the sellers capacity or legal authority to sell depends on the
proof of capacity of the seller. If the proof of capacity consists of a special power of attorney duly

notarized, mere inspection of the face of such public document already constitutes sufficient inquiry.
If no such special power of attorney is provided or there is one but there appears to be flaws in its
notarial acknowledgment, mere inspection of the document will not do; the buyer must show that his
investigation went beyond the document and into the circumstances of its execution.
37

In the present case, it is undisputed that Sps. Sarili purchased the subject property from Ramos on
the strength of the latters ostensible authority to sell under the subject SPA. The said document,
however, readily indicates flaws in its notarial acknowledgment since the respondents community
tax certificate (CTC) number was not indicated thereon. Under the governing rule on notarial
acknowledgments at that time, i.e., Section 163(a) of Republic Act No. 7160, otherwise known as
the "Local Government Code of 1991," when an individual subject to the community tax
acknowledges any document before a notary public, it shall be the duty of the administering officer to
require such individual to exhibit the community tax certificate. Despite this irregularity, however,
Sps. Sarili failed to show that they conducted an investigation beyond the subject SPA and into the
circumstances of its execution as required by prevailing jurisprudence. Hence, Sps. Sarili cannot be
considered as innocent purchasers for value.
38

39

The defective notarization of the subject SPA also means that the said document should be treated
as a private document and thus examined under the parameters of Section 20, Rule 132 of the
Rules of Court which provides that "before any private document offered as authentic is received in
evidence, its due execution and authenticity must be proved either: (a) by anyone who saw the
document executed or written; or (b) by evidence of the genuineness of the signature or handwriting
of the maker x x x." Settled is the rule that a defective notarization will strip the document of its public
character and reduce it to a private instrument, and the evidentiary standard of its validity shall be
based on preponderance of evidence.
40

The due execution and authenticity of the subject SPA are of great significance in determining the
validity of the sale entered into by Victorino and Ramon since the latter only claims to be the agent of
the purported seller (i.e., respondent). Article 1874 of the Civil Code provides that "[w]hen a sale of a
piece of land or any interest therein is through an agent, the authority of the latter shall be in writing;
otherwise, the sale shall be void." In other words, if the subject SPA was not proven to be duly
executed and authentic, then it cannot be said that the foregoing requirement had been complied
with; hence, the sale would be void.
After a judicious review of the case, taking into consideration the divergent findings of the RTC and
the CA on the matter, the Court holds that the due execution and authenticity of the subject SPA
were not sufficiently established under Section 20, Rule 132 of the Rules of Court as above-cited.
41

While Ramon identified the signature of respondent on the subject SPA based on his alleged
familiarity with the latters signature, he, however, stated no basis for his identification of the
signatures of respondents wife Amelia and the witness, Evangeline F. Murral, and even failed to
identify the other witness, who were also signatories to the said document. In other words, no
evidence was presented to authenticate the signatures of the other signatories of the subject SPA
outside from respondent.
42

43

44

45

Besides, as the CA correctly observed, respondents signature appearing on the subject SPA is not
similar to his genuine signature appearing in the November 25, 1999 SPA in favor of
Lourdes, especially the signature appearing on the left margin of the first page.
46

47

48

Unrebutted too is the testimony of respondent who, during trial, attested to the fact that he and his
wife, Amelia, had immigrated to the USA since 1968 and therefore could not have signed the subject
SPA due to their absence.
49

Further, records show that the notary public, Atty. Ramon S. Untalan, failed to justify why he did not
require the presentation of respondents CTC or any other competent proof of the identity of the
person who appeared before him to acknowledge the subject SPA as respondents free and
voluntary act and deed despite the fact that he did not personally know the latter and that he met him
for the first time during the notarization. He merely relied on the representations of the person
before him and the bank officer who accompanied the latter to his office, and further explained that
the reason for the omission of the CTC was "because in [a] prior document, [respondent] has
probably given us already his residence certificate." This "prior document," was not, however,
presented during the proceedings below, nor the CTC number ever identified.
50

51

52

53

Thus, in light of the totality of evidence at hand, the Court agrees with the CAs conclusion that
respondent was able to preponderate his claims of forgery against the subject SPA. In view of its
invalidity, the November 20, 1992 sale relied on by Sps. Sarili to prove their title to the subject
property is therefore void.
54

1wphi1

At this juncture, it is well to note that it was, in fact, the February 16, 1978 deed of sale which as
the CA found was actually the source of the issuance of TCT No. 262218. Nonetheless, this
document was admitted to be also a forgery. Since Sps. Sarilis claim over the subject property is
based on forged documents, no valid title had been transferred to them (and, in turn, to petitioners).
Verily, when the instrument presented is forged, even if accompanied by the owners duplicate
certificate of title, the registered owner does not thereby lose his title, and neither does the assignee
in the forged deed acquire any right or title to the property. Accordingly, TCT No. 262218 in the
name of Victorino married to Isabel should be annulled, while TCT No. 55979 in the name of
respondent should be reinstated.
55

56

Anent the award of moral damages, suffice it to say that the dispute over the subject property had
caused respondent serious anxiety, mental anguish and sleepless nights, thereby justifying the
aforesaid award. Likewise, since respondent was constrained to engage the services of counsel to
file this suit and defend his interests, the awards of attorneys fees and litigation expenses are also
sustained.
57

58

The Court, however, finds a need to remand the case to the court a quo in order to determine the
rights and obligations of the parties with respect to the house Sps. Sarili had built on the subject
property in bad faith in accordance with Article 449 in relation to Articles 450, 451, 452, and the first
paragraph of Article 546 of the Civil Code which respectively read as follows:
59

ART. 449. He who builds, plants or sows in bad faith on the land of another, loses what is built,
planted or sown without right to indemnity.

ART. 450. The owner of the land on which anything has been built, planted or sown in bad faith may
demand the demolition of the work, or that the planting or sowing be removed, in order to replace
things in their former condition at the expense of the person who built, planted or sowed; or he may
compel the builder or planter to pay the price of the land, and the sower the proper rent.
ART. 451. In the cases of the two preceding articles, the landowner is entitled to damages from the
builder, planter or sower.
ART. 452. The builder, planter or sower in bad faith is entitled to reimbursement for the necessary
expenses of preservation of the land.
xxxx
ART. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until he has been reimbursed therefor. (Emphases and underscoring
supplied)
xxxx
To be deemed a builder in good faith, it is essential that a person asserts title to the land on which he
builds, i.e. , that he be a possessor in concept of owner, and that he be unaware that there exists in
his title or mode of acquisition any flaw which invalidates it. Good faith is an intangible and abstract
quality with no technical meaning or statutory definition, and it encompasses, among other things, an
honest belief, the absence of malice and the absence of design to defraud or to seek an
unconscionable advantage. It implies honesty of intention, and freedom from knowledge of
circumstances which ought to put the holder upon inquiry. As for Sps. Sarili, they knew or at the
very least, should have known from the very beginning that they were dealing with a person who
possibly had no authority to sell the subject property considering the palpable irregularity in the
subject SPAs acknowledgment. Yet, relying solely on said document and without any further
investigation on Ramoss capacity to sell Sps. Sarili still chose to proceed with its purchase and even
built a house thereon. Based on the foregoing it cannot be seriously doubted that Sps. Sarili were
actually aware of a flaw or defect in their title or mode of acquisition and have consequently built the
house on the subject property in bad faith under legal contemplation. The case is therefore
remanded to the court a quo for the proper application of the above-cited Civil Code provisions.
60

61

WHEREFORE, the petition is DENIED. The Decision dated May 20, 2010 and Resolution dated
August 26, 2010 of the Court of Appeals in CA-G.R. CV No. 76258 are AFFIRMED. However the
case is REMANDED to the court a quo for the proper application of Article 449 in relation to Articles
450 451 452 and the first paragraph of Article 546 of the Civil Code with respect to the house
Spouses Victorino Sarili and Isabel Amparo had built on the subject property as herein discussed.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila

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 GARCIAGONZALEZ, THERESA GARCIA-TIANGSON, MARIVIC H. GARCIA, MARLENE GARCIAMOMIN, GERARDO H. GARCIA, GIDEON H. GARCIA and GENEROSO H. GARCIA, and
ERMELINDA H. GARCIA, Respondents.
DECISION
PEREZ, J.:
This is a Petition for Review on Certiorari filed pursuant to Rule 45 of the Revised Rules of Court,
assailing the 19 May 2009 Decision rendered by the Sixth Division of the Court of Appeals in CAG.R. SP No. 92587. The appellate court affirmed the Order of the Regional Trial Court R TC) of
Quezon City, Branch 77, directing the Deputy Sheriff to suspend the conduct of the execution sale of
the buildings levied upon by him.
1

The Facts
Sometime in 1990, petitioner Magdalena T Villasi (Villasi) engaged the services of respondent FilGarcia 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 filed an answer specifically 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 dated 26 June 1996 in FGCIs 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:
4

WHEREFORE, judgment is hereby rendered:

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 damages
and P100,000.00 as attorneys fees.
5

Elevated on appeal and docketed as CA-GR CV No. 54750, the Court of Appeals reversed the
disquisition of the RTC in its Decision 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:
6

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 ofP425,004.00 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.

Unrelenting, FGCI filed 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 filed out of
time. The said resolution became final and executory on 27 November 2001, as evidenced by the
Entry of Judgment made herein.
8

To enforce her right as prevailing party, Villasi filed a Motion for Execution of the 20 November 2000
Court of Appeals Decision, which was favorably acted upon by the RTC. 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.
9

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
Certificates 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 filed an Affidavit of Third Party Claim and a
Motion to Set Aside Notice of Sale on Execution, 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.
10

11

After weighing the arguments of the opposing parties, the RTC issued on 24 February 2005 an
Order directing the Sheriff to hold in abeyance the conduct of the sale on execution, to wit:
12

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.
13

The motion for reconsideration of Villasi was denied by the trial court in its 11 October 2005 Order.

14

Arguing that the RTC gravely abused its discretion in ordering the suspension of the sale on
execution, Villasi timely filed a Petition for Certiorari before the Court of Appeals. In a
Decision dated 19 May 2009, the appellate court dismissed the petition. In a Resolution dated 28
October 2009, the Court of Appeals refused to reconsider its decision.
15

16

Villasi is now before this Court via this instant Petition for Review on Certiorariassailing the adverse
Court of Appeals Decision and Resolution and raising the following issues:
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 [FGCIS] 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.
17

The Courts 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 mans 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, Rule 39 specifically 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
18

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.
19

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.
20

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 was financed 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.
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 Certification issued by the Office 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 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. In Spouses Sy v.
Hon. Discaya, we declared that for a third-party claim or a terceria to prosper, the claimant must
first sufficiently establish his right on the property:
1avvphi1

21

[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. (Emphasis and underscoring supplied).
22

Our perusal of the record shows that, as the party asserting their title, the 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. 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. In Buduhan v. Pakurao, we underscored the
significance 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:
23

24

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. The
voluntary declaration of a piece of property for taxation purposes manifests not only ones 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 ones bona fide claim of acquisition of ownership.
25

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. Quite significantly, all the court processes in an earlier collection suit
between FGCI and Villasi were served, thru the formers 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.
26

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 rectified 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 satisfied. It is almost trite to say that execution is the
fruit and end of the suit. Hailing it as the "life of the law,"
27

ratio legis est anima, 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. A judgment, if left
unexecuted, would be nothing but an empty triumph for the prevailing party.
28

29

30

While it is a hornbook doctrine that the accessory follows the principal, 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 artificially, 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
31

32

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, 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:
33

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 certificate 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, petitioners evidence pales in comparison and leaves us
totally unconvinced.
34

In Caltex (Phil.) Inc. v. Felias, 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:
35

x x x. 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.
36

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 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 FGCIs 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 FGCIs judgment debt.
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.