G.R. No. L-31077 March 17, 1978
ARABAY, INC., petitioner, vs. Hon. SERAFIN SALVADOR, Presiding Judge of the Court of First Instance of Rizal, Caloocan City Branch, and BENJAMIN M. PASCUAL, respondents.

FACTS

Petitioner Arabay, Inc. obtained a money judgment against Florencio Soyangco from the Court of First Instance (CFI) of Manila. To execute the judgment, a deputy sheriff levied upon forty pieces of personal property found at Soyangco’s residence. Private respondent Benjamin Pascual filed a third-party claim, asserting ownership over the levied properties by virtue of a prior sheriff’s sale from a different case against Soyangco. Arabay posted an indemnity bond, prompting the sheriff to proceed with the scheduled auction.
Pascual then filed a separate action for injunction (Civil Case No. C-1545) in the CFI of Rizal, Caloocan City, against the sheriff and Arabay, seeking to enjoin the auction sale and to have the levy declared void. The Caloocan court issued an ex parte order enjoining the sale. Arabay moved to dismiss, invoking the rule against a court interfering by injunction with the judgments or execution proceedings of a coordinate court. Pascual opposed, citing the rule that a sheriff cannot attach property not belonging to the judgment debtor. The Caloocan court denied the motion to dismiss and ordered the issuance of a writ of injunction upon the filing of a bond.

ISSUE

Whether the Caloocan CFI has jurisdiction to issue an injunction, at the instance of a third-party claimant, to restrain the execution sale of properties levied upon to satisfy a judgment rendered by the Manila CFI.

RULING

Yes, the Caloocan court acted within its jurisdiction. The Supreme Court held that the injunction did not constitute an improper interference with a coordinate court’s processes. The legal logic rests on the distinction between the execution court’s authority over the judgment debtor’s property and a sheriff’s act of levying upon a third party’s property. Rule 39, Section 17 of the Rules of Court expressly recognizes the right of a third-party claimant to vindicate his claim to the levied property “by any proper action.” This separate action is distinct from the original case where execution is issued.
When a sheriff levies upon property claimed by a stranger, he acts beyond the scope of the writ of execution, which only authorizes seizure of the judgment debtor’s assets. An injunction to stop the sale of such wrongfully levied property is not an interference with the writ of execution itself, but a restraint on the sheriff’s unauthorized implementation of it. The issue of ownership between the third-party claimant and the judgment creditor is a new and independent cause of action, properly cognizable by any court of competent jurisdiction. Therefore, the Caloocan CFI had jurisdiction to entertain Pascual’s action and to issue the ancillary writ of injunction to preserve the status quo pending adjudication of the ownership claim. The petition for certiorari was dismissed.