G.R. No. 106858 September 5, 1997
PHILIPPINE BANK OF COMMUNICATIONS, petitioner,
vs.
COURT OF APPEALS and GAW LE JA CHUA, respondents.
KAPUNAN, J.:
Before us is a petition for review on certiorari assailing the decision of the Court of Appeals dated August 3 1, 1992.
The factual background of the instant petition is as follows:
In 1984, Philippine Bank of Communications (PBCom)
filed two (2) collection suits against, among others, Joseph L.G. Chua,
husband of herein private respondent, who acted as one of the sureties
for the financial obligations of Fortune Motors (Phils.), Inc. and the
Forte Merchant Finance, Inc., with the petitioner. After the filing of
the complaint, the co-defendants of Joseph L.G. Chua had no more
properties left to answer for their obligations to the bank. Since
Joseph L.G. Chua bound himself solidarily with the two principal
debtors, the bank chose to run after Joseph L.G. Chua who was found to
own a property situated in Dasmarinas, Makati. Said property was,
however, discovered to have been earlier transferred to Jaleco
Development Corporation by virtue of a Deed of Exchange dated October
24, 1983 executed by Joseph L.G Chua with the conformity of private
respondent. The bank considered such transfer as in fraud of creditors
and thereby sought its annulment before the Regional Trial Court of
Makati, docketed as Civil Case No. 7889. A notice of Lis Pendens was thereafter registered on July 17, 1984.
Meanwhile, the collection suits filed by petitioners
(Civil Case No. 84-25159 and Civil Case No. 84-25260) which reached this
Court and the Court of Appeals, respectively, became final in favor of
PBCom.
Said decisions could not be executed since petitioner
was still awaiting the finality of the decision in Civil Case No. 7889
which was pending with this Court (docketed as G.R. No. 92067). Finally,
on March 22, 1991, this Court declared the Deed of Exchange null and
void after finding that the transfer of the property to Jaleco
Development Corporation was indeed in fraud of PBCom as creditor.
When said decision became final, the subject property was immediately levied, and the auction sale was set on July 30, 1991.
On July 24, 1991, private respondent Gaw Le Ja Chua,
wife of Joseph L. G. Chua, filed a Third Party Claim with the Sheriffs
of Branches 8 and 9 of RTC, Manila. At the same time, she initiated two
separate reinvindicatory actions on the subject property in the lower
court.
Petitioner, on the other hand, filed an Urgent Motion to Direct the Sheriff to Enforce the Writ of Execution/Auction Sale.
On August 15, 1991, the RTC denied petitioner's
motion. The Motion for Reconsideration with a motion to quash the third
party claim was, likewise, denied in an Order dated October 21, 1991.
Dissatisfied, the petitioner came to this Court
assailing the RTC's Orders. The matter was, however, referred to the
Court of Appeals for proper disposition.
On August 31, 1992, the respondent court dismissed the petition in this wise:
Petitioner's
allegation that private respondent is not the third-party or "stranger"
referred to under the aforequoted rule is an issue which will properly
be resolved by the Regional Trial Court of Makati where the separate
reinvindicatory actions are pending. It will be premature for Us to pass
upon such issue while the same is still pending before the lower court.
WHEREFORE, there being no abuse of discretion on the
part of the public respondent and there being a plain, speedy and
adequate remedy available to petitioner in the ordinary course of law,
this petition is dismissed with costs.
SO ORDERED. 1
The motion for reconsideration was likewise denied. Hence, the instant petition with the following assignment of errors:
I.
THE COURT OF APPEALS GRAVELY ERRED IN NOT DECLARING
THAT BRANCH 8, REGIONAL TRIAL COURT OF MANILA, GRAVELY ABUSED ITS
DISCRETION IN NOT QUASHING THE PATENT AND DUBIOUS THIRD-PARTY CLAIM OF
THE HEREIN PRIVATE RESPONDENT.
II.
THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT
PBCOM'S PETITION IS PREMATURE, THUS, CONVENIENTLY BRUSHING ASIDE THE
FOLLOWING QUESTIONS OF LAW:
II.1 WHETHER OR NOT PRIVATE RESPONDENT CAN BE
CONSIDERED A STRANGER WITHIN THE MEANING OF THE LAW THAT WOULD ENTITLE
HER TO THE RELIEFS PROVIDED IN SECTION 17, RULE 39 OF THE RULES OF
COURT.
II.2
WHETHER OR NOT PRIVATE RESPONDENT IS NOW ESTOPPED FROM FILING A
THIRD-PARTY CLAIM AS WELL AS AN INDEPENDENT ACTION INVOLVING THE
PROPERTY IN QUESTION. 2
The
real issue in this case is whether or not private respondent is
considered a stranger within the meaning of Section 17, Rule 39 of the
Rules of Court, as to entitle her to the remedy of a third-party claim
or reinvidicatory actions over the subject property.
We rule in the negative.
A stranger is a third-party who is any person other than the judgment debtor or his agent. In several cases, 3
we have recognized the right of a third-party claimant to file an
independent action to vindicate his claim of ownership over the
properties seized. This is provided by Section 17, Rule 39 which states:
Sec. 17. Proceedings where property claimed by third person.
— If property levied on be claimed by any other person than the
judgment debtor or his agent, and such person make an affidavit of his
title thereto or right to the possession thereof, stating the grounds of
such right or title, and serve the same upon the officer making the
levy, and a copy thereof upon the judgment creditor, the officer shall
not be bound to keep the property, unless such judgment creditor or his
agent, on demand of the officer, indemnify the officer against such
claim by a bond in a sum not greater 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.
The officer is not liable for damages, for the taking
or keeping of the property, to any third-party claimant unless a claim
is made by the latter and unless an action for damages is brought by him
against the officer within one hundred twenty (120) days from the date
of the filing of the bond. But nothing herein contained shall prevent
such claimant or any third person from vindicating his claim to the
property by any proper action.
xxx xxx xxx
While we are aware of the legal maxim that no man shall be affected by proceedings to which he is a stranger, 4
the attendant circumstances, however, in the case at bar constrain us
to rule that private respondent cannot be considered a stranger within
the purview of the law.
It must be noted that the sheriffs levied on the
subject property on the basis of the annulment of the Deed of Exchange
executed by Chua in favor of Jaleco Development Inc. as ruled by this
Court on March 22, 1991 in Philippine Bank of Communications v. Court of Appeals, et al., G.R. No. 92067. In said case, we categorically stated that:
. .
. . [T]he evidence clearly shows that Chua and his immediate family
control JALECO. The Deed of Exchange executed by Chua and JALECO had for
its subject matter the sale of the only property of Chua at the time
when Chua's financial obligations became due and demandable. The records
also show that despite the "sale", respondent Chua continued to stay in
the property, subject matter of the Deed of Exchange.
These circumstances tend to show that the Deed of
Exchange was not what it purports to be. Instead, they tend to show that
the Deed of Exchange was executed with the sole intention to defraud
Chua's creditor — the petitioner. It was not a bona fide transaction
between JALECO and Chua. Chua entered a sham or simulated transaction
with JALECO for the sole purpose of transferring the title of the
property to JALECO without really divesting himself of the title and
control of the said property.
Considering
that this Court has ruled that the transaction leading to the execution
of the Deed of Exchange between Chua and Jaleco was actually a
transaction between Chua and himself and not between Chua and Jaleco,
such transaction was a sham. As observed by this Court in G.R. No.
92067, the stockholders of Jaleco were mostly members of the immediate
family of Joseph L.G. Chua, private respondent's husband and the couple
continued to stay in the property despite its "sale" to Jaleco.
For her part, private respondent gave her marital
consent or conformity to the Deed of Exchange and that by that act she
became necessarily a party to the instrument. She cannot, therefore,
feign ignorance to the simulated transaction where the intention was
really to defraud her husband's creditors.
It should be noted that Civil Case No. 7889 which
sought the annulment of the Deed of Exchange was primarily instituted by
petitioner to recover the property in question from Jaleco and the
couple. It was an offshoot of the two collection cases filed against the
husband.
In Vda. de Nabong v. Sadang, 5 which is analogous to the case at bar, we ruled that:
. . . . If properly levied on be claimed by any other person that the judgment debtor or his agent,
and such person make an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title, and
serve the same upon the officer making the levy, and a copy thereof upon
the judgment creditor, the officer shall not be bound to keep the
property, unless such judgment creditor or his agent, on demand of the
officer, indemnify the officer against such claim by a bond in a sum not
greater that 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. . . . From the foregoing provision,
it is clear that a third party claim must be filed by a person other than the judgment debtor (defendant) or his agent.
In the present case, although Ignacio was not named as defendant there
is no doubt that as wife of defendant Sunga she shares a common interest
with him in the litigation. Indeed she represented herself to be the
agent of Sunga by signing the answer in their behalf. She is therefore
as much a judgment debtor and agent of the defendant and not a third
party to the litigation.
In
a last ditch effort to retain the property, private respondent now
contends that it belongs to the conjugal partnership which should not
answer for the obligations of the husband. Invoking Luzon Surety v. De Garcia, 6 and Ting v. Villarin, 7
private respondent argues that the property can not be held liable for
her husband's obligations because such obligations never redounded to
the benefit of the property regime of the spouses. In said cases, the
Court stated that:
This
particular codal provision in question rightfully emphasizes the
responsibility of the husband as administrator. He is supposed to
conserve and, if possible, augment the funds of the conjugal
partnership, not dissipate them. If out of friendship or misplaced
generosity on his part the conjugal partnership would be saddled with
financial burden, then the family stands to suffer. No objection need
arise if the obligation thus contracted by him could be shown to be for
the benefit of the wife and the progeny if any there be. That is but
fair and just. Certainly, however, to make a conjugal partnership
respond for a liability that should appertain to the husband alone is to
defeat and frustrate the avowed objective of the new Civil Code to show
the utmost concern for the solidarity and well-being of the family as a
unit. The husband, therefore, as is wisely thus made certain, is denied
the power to assume unnecessary and unwarranted risks to the financial
stability of the conjugal partnership. 8
That
the ATTACHMENT ordered by the respondent Judge . . . likewise gives
cause for this Court to strike it down for being NULL AND VOID. The
ATTACHED PROPERTY of the spouses Ting are CONJUGAL, the same CANNOT BE
VALIDLY BROUGHT UNDER the painful process of ATTACHMENT because:
xxx xxx xxx
(b)
Secondly, the conjugal partnership cannot possibly be benefitted
(again, here, Consolidated Bank's allegation that the act of the husband
redounded to the benefit of the conjugal partnership is mere "book
form") when the husband binds himself as guarantor, because this act
does not conserve or augment conjugal funds but instead threatens to
dissipate them by unnecessary and unwarranted risks to the partnership's
financial stability. When the husband assumes the obligation of a
guarantor, the presumption that he acts, as administrator, for the
benefit of the conjugal partnership, is lost." (emphasis supplied.) 9
The
aforecited cases are not applicable. While previously in the Deed of
Exchange, private respondent conceded that the property was solely owned
by her husband and that it was ceded to Jaleco Development Corp., after
this Court ruled against the husband, she changed task by claiming that
the property is conjugal and, as an afterthought, she filed a third
party claim. Notably, she never intervened in said case where the
validity of the Deed of Exchange was being questioned to protect her
rights and interests if indeed she truly believed that the property
belonged to the conjugal partnership. At the very least, private
respondent is now estopped from claiming that property in question
belongs to the conjugal partnership. She cannot now take an inconsistent
stance after an adverse decision in G.R. No. 92067. In Santiago Syjuco, Inc. v. Castro 10, we had the occasion to reiterate that:
The principles of equitable estoppel, sometimes called estoppel in pais,
are made part of our law by Art. 1432 of the Civil Code. Coming under
this class is estoppel by silence, which obtains here and as to which it
has been held that:
. . . an estoppel may arise from silence as well as
from words. "Estoppel by silence" arises where a person, who by force of
circumstances is under a duty to another to speak, refrains from doing
so and thereby leads the other to believe in the existence of a state of
facts in reliance on which he acts to his prejudice. Silence may
support an estoppel whether the failure to speak is intentional or
negligent.
Inaction or silence may under some circumstances
amount to a misrepresentation and concealment of facts, so as to raise
an equitable estoppel. When the silence is of such a character and under
such circumstances that it would become a fraud on the other party to
permit the party who has kept silent to deny what his silence has
induced the other to believe and act on, it will operate as an estoppel.
This doctrine rests on the principle that if one maintains silence,
when in conscience he ought to speak, equity will debar him from
speaking when in conscience he ought to remain silent. He who remains
silent when he ought to speak cannot be heard to speak when he should be
silent.
Finally,
we take special note of the fact that this case has been going on for
several years. Because of a dubious third party claim filed by private
respondent, petitioner has been deprived of the fruits of the judgment
in its favor which has become final and executory since 1991. In Pelayo v. Court of Appeals, 11 we emphasized that:
. .
. Litigation must end and terminate sometime and somewhere, and it is
essential to an effective administration of justice that once a judgment
has become final, the winning party be not, through a mere subterfuge,
deprived of the fruits of the verdict. Courts must therefore guard
against any scheme calculated to bring about that result. Constituted as
they are to put an end to controversies, courts should frown upon any
attempt to prolong them.
WHEREFORE,
the petition is GRANTED. The Decision of the Court of Appeals is SET
ASIDE. This case is REMANDED to the Regional Trial Court, Manila, Branch
8, for execution.
SO ORDERED.
Bellosillo, Vitug and Hermosisima, Jr., JJ., concur.Footnotes
2 Id., at 13.
3 Ong v. Tating, 149 SCRA 265 (1987); Bayer Phil. Inc. v. Agana, 63 SCRA 355 (1975); Lorenzana v. Cayetano, 78 SCRA 485 (1977); Roque v. CA, 93 SCRA 540 (1979); Sy v. Discaya, 181 SCRA 378 (1990).
4 Polaris v. Plan, 69 SCRA 93 (1976).
5 167 SCRA 232 (1988).
6 30 SCRA 111 (1969).
7 176 SCRA 532 (1989).
8 See note 6.
9 See note 7.
10 175 SCRA 171 (1989).
11 230 SCRA 606 (1994).
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