Sampaguita Pictures, Inc. vs. Jalwindor Manufacturers, Inc.
93 SCRA 420
October 1979
FACTS:
Both the plaintiff-appellant Sampaguita Pictures Inc. (Sampaguita) and defendant-appellee Jalwindor Manufacturers Inc. (Jalwindor) were domestic corporations duly organized under the Philippine laws. Sampaguita leased to Capitol “300” Inc. (Capitol) the roof deck of its building with the agreement that all permanent improvements Capitol will make on said property shall belong to Sampaguita without any part on the latter to reimburse Capitol for the expenses of said improvements. Shortly, Capitol purchased on credit from Jalwindor glass and wooden jalousies, which the latter itself delivered and installed in the leased premises, replacing the existing windows.
On June 1, 1964, Jalwindor filed with the CFI of Rizal, Quezon City an action for collection of a sum of money with a petition for preliminary attachment against Capitol for its failure to pay its purchases. Later, Jalwindor and Capitol submitted to the trial court a Compromised Agreement wherein Capitol acknowledged its indebtedness of P9,531.09, payable in monthly installments of at least P300.00 a month beginning December 15,1964 and that all the materials that Capitol purchased will be considered as security for such undertaking. Meanwhile, Sampaguita filed a complaint for ejectment and for collection of a sum of money against Capitol for the latter’s failure to pay rentals from March 1964 to April 1965, and the City Court of Quezon City ordered Capitol on June 8, 1965 to vacate the premises and to pay Sampaguita.
On the other hand, Capitol likewise failed to comply with the terms of the Compromise Agreement, and on July 31, 1966, the Sheriff of Quezon City made levy on the glass and wooden jalousies. Sampaguita filed a third-party claim alleging that it is the owner of said materials and not Capitol, but Jalwindor filed an idemnity bond in favor of the Sheriff and the items were sold at public auction on August 30, 1966, with Jalwindor as the highest bidder for P6,000.00. Sampaguita filed with the CFI of Rizal, Quezon City an action to nullify the Sheriff's sale and for an injunction to prevent Jalwindor from detaching the glass and wooden jalousies. Jalwindor was ordered to maintain the status quo pending final determination of the case, and on October 20, 1967, the lower court dismissed the complaint and ordered Sampaguita to pay Jalwindor the amount of P500.00 as attorney's fees.
ISSUE:
Was there a delivery made and, therefore, a transfer of ownership of the thing sold?
COURT RULING:
The Supreme Court reversed the decision of the lower court declaring Sampaguita as declared the lawful owner of the disputed glass and wooden jalousies, permanently enjoining Jalwindor from detaching said items from the roof deck of the Sampaguita Pictures Building, and ordered Jalwindor to pay Sampaguita the sum of P1,000.00 for and as attorney's fees.
When a property levied upon by the sheriff pursuant to a writ of execution is claimed by a third person in a sworn statement of ownership thereof, as prescribed by the rules, an entirely different matter calling for a new adjudication arises. The items in question were illegally levied upon since they do not belong to the judgment debtor. The power of the Court in execution of judgment extends only to properties unquestionably belonging to the judgment debtor. The fact that Capitol failed to pay Jalwindor the purchase price of the items levied upon did not prevent the transfer of ownership to Capitol and, later, to Sampaguita by virtue of the agreement in their lease contract. Therefore, the complaint of Sampaguita to nullify the Sheriff's sale is well founded, and should prosper.
