G.R. No. 86301; January 23, 1990
SPOUSES JULIAN SY and ROSA Q. TAN, petitioners, vs. HON. JAIME D. DISCAYA, JARDINE-MANILA FINANCE, INC., and THE PROVINCIAL SHERIFF OF RIZAL, respondents.

FACTS

The Regional Trial Court (RTC) of Pasig rendered a money judgment against Julian Sy Bang and others in Civil Case No. 39816. Upon motion, execution pending appeal was granted. The sheriff levied on a parcel of land registered under Transfer Certificate of Title No. T-28294, annotating a notice of levy. The registered owners, spouses Julian Sy and Rosa Q. Tan, filed a complaint in the RTC of Lucena (Civil Case No. 88-109) against the judgment creditor, Jardine-Manila Finance, Inc., and the Provincial Sheriff of Rizal. They sought cancellation of the levy and an injunction against the auction sale, alleging the property was Rosa Q. Tan’s paraphernal property and, alternatively, even if conjugal, the obligation did not benefit the conjugal partnership.
The respondents moved to dismiss the Lucena complaint for lack of jurisdiction, arguing the proper forum was the Pasig RTC which issued the writ of execution. The respondent judge granted the motion, citing De Leon vs. Salvador, which held that the court with control of levied property exercises exclusive jurisdiction. The motion for reconsideration was denied, prompting this petition.

ISSUE

Whether the respondent judge erred in dismissing the petitioners’ independent action for cancellation of the levy for lack of jurisdiction.

RULING

Yes, the respondent judge erred. The Supreme Court granted the petition, annulled the challenged orders, and remanded the case to the Lucena RTC. The legal logic is anchored on Section 17, Rule 39 of the Rules of Court, which provides multiple remedies for a third-party claimant whose property is mistakenly levied. A third-party claimant may: (1) invoke the supervisory power of the court that issued the writ for a summary determination of whether the sheriff acted correctly in levying on property not belonging to the judgment debtor; or (2) avail of the “terceria” remedy by serving an affidavit of title on the officer and the judgment creditor. Critically, the rule expressly reserves the right of the claimant to vindicate his claim “by any proper action.”
This “proper action” is an independent suit distinct from the summary proceedings before the execution court or an action for damages against the sheriff. The filing of such an independent action in a court other than the one which issued the writ is proper when the claimant is a stranger to the original case, as petitioner Rosa Q. Tan is here. The core issue—ownership of the levied property—requires a full adjudication on the merits, which is beyond the limited, summary scope of the execution court’s supervisory power. A sheriff acts beyond his authority when he levies on property not belonging to the judgment debtor. Consequently, an independent action to determine title does not constitute an encroachment on the jurisdiction of a coordinate court. The money judgment is enforceable only against the debtor’s property, and a separate action is the prescribed procedure to resolve a third party’s claim of ownership.