G.R. No. 156448; February 23, 2011
SPS. MOISES and CLEMENCIA ANDRADA, Petitioners, vs. PILHINO SALES CORPORATION, represented by its Branch Manager, JOJO S. SAET, Respondent.

FACTS

Respondent Pilhino Sales Corporation (Pilhino) sued Jose Andrada, Jr. and his wife (Civil Case No. 20,489-90) to recover a sum of money. The RTC issued a writ of preliminary attachment against two trucks owned by Jose Andrada, Jr., but the levies were lifted after he filed a counter-attachment bond. The RTC later decided in Pilhino’s favor. Pilhino enforced the writ of execution against the Andradas’ properties instead of claiming against the bond, leading the sheriff to seize and sell a Hino truck at public auction, with Pilhino as the highest bidder. However, the truck could not be transferred to Pilhino because it had already been sold by Jose Andrada, Jr. to petitioner Moises Andrada (a sale unknown to Pilhino), and Moises had mortgaged it to BA Finance. BA Finance later sued Moises for loan default, obtained a favorable decision, and had the sheriff levy upon and sell the same Hino truck (which was in Pilhino’s possession) at public auction, with BA Finance as the highest bidder.
Consequently, Pilhino filed an action (Civil Case No. 21,898-93) to annul, among others, the deed of sale between Jose Andrada, Jr. and Moises Andrada and the chattel mortgage to BA Finance. Only spouses Moises and Clemencia Andrada filed a responsive pleading among the Andrada defendants. Pilhino and Jose Andrada, Jr. later entered into a compromise agreement, leading to a partial judgment. Proceedings continued only against spouses Moises and Clemencia Andrada and BA Finance. The petitioners defended that they acquired the truck in good faith, free from lien, after the preliminary attachment was lifted, and that Pilhino’s recourse was against the counter-attachment bond. BA Finance claimed it was a mortgagee in good faith.
The RTC dismissed the case against the petitioners, BA Finance, and others. The petitioners appealed to the CA, contesting the dismissal of their counterclaim, the declaration that the deed of sale was simulated, and the approval of the compromise agreement. The CA affirmed the RTC judgment but modified it by declaring the sale of the truck to Moises Andrada as valid, subject to BA Finance’s rights as mortgagee and highest bidder.

ISSUE

1. Whether Pilhino should be held liable for damages sustained by the petitioners from the levy on execution of the Hino truck.
2. Whether Pilhino was guilty of bad faith when it proceeded with the levy on execution upon the Hino truck owned by Moises Andrada.

RULING

The Supreme Court DENIED the petition for review.
1. The petition raises questions of fact, which are not permissible in an appeal by certiorari under Rule 45 of the Rules of Court. The Court’s power of review is limited to questions of law. The petitioners’ insistence on the absence of good faith on Pilhino’s part requires a re-examination of factual issues, which is outside the scope of a Rule 45 petition. The factual findings of the Court of Appeals are conclusive and binding on the Supreme Court.
2. On the substantive issues, the Court found no merit. The CA correctly found that Pilhino acted in good faith in filing the annulment case, as it believed the sale to Moises Andrada was simulated to evade Jose Andrada, Jr.’s obligations. The elements of abuse of rights (Article 21 in relation to Article 19 of the Civil Code)—(a) a legal right or duty, (b) exercised in bad faith, and (c) for the sole intent of injuring another—were not established. The CA’s conclusion that no legal remedy exists for damages resulting from an act that does not amount to a legal wrong or injury stands. Therefore, Pilhino cannot be held liable for damages.