Republic v.

Sheriff Enriquez
October 21, 1988
Padilla
alycat

SUMMARY: The Republic, through the CIR, served a warrant of
distraint on Maritime in order to satisfy the latters deficiency taxes.
The CIR issued the corresponding notice of seizure. Among the
properties seized were six barges. Meanwhile, Sheriff Enriquez levied
on two of the barges already seized by the CIR, pursuant to a writ of
execution issued by the court in a civil case. The CIR wrote Enriquez,
informing the latter that the barges had already been seized and
distrained by the BIR. However, Enriquez still sold the barges at a
public auction. So, the Republic filed a petition for Enriquezs notice of
levy to be declared null and void. The CA found for Enriquez, but the SC
reversed.

DOCTRINE: The claim of the government predicated on a tax lien is
superior to the claim of a private litigant predicated on a judgment. The
tax lien attaches not only from the service of the warrant of distraint of
personal property but from the time the tax became due and payable.

FACTS:
The Republic, through the CIR, served a warrant of distraint of
personal property on the Maritime Company of the Philippines
in order to satisfy Maritimes deficiency taxes.
The CIR issued the corresponding notice of seizure of personal
property.
o Among the properties seized were six barges, MCP-1,
to MCP-6.
Meanwhile, Sheriff Ramon Enriquez levied on two barges of
Maritime, pursuant to a writ of execution issued by the RTC in
civil case Genstar Container v. Maritime.
o The two barges, MCP-1 and MCP-4 were among the
properties distrained and seized by the CIR.
o Enriquez scheduled a public auction of the levied
barges.
The CIR wrote Enriquez informing the latter that the barges
were no longer owned by Maritime, as they had been
distrained and seized by the BIR, thereby registering its
adverse claim over the barges.
o The letter, together with an affidavit of adverse claim
was filed at the office of Enriquez and received by one
Zenriquez Staff II.
Enriquez sold the two barges at a public auction and issued the
corresponding certificates of sale.
The Republic filed a petition for prohibition with preliminary
injunction before the CA.
o It alleged that Enriquez acted in excess of his
authority/ with grave abuse of discretion when he
levied on and auctioned the two barges.
o It prayed that:
- Enriquez be ordered to desist and refrain
from further proceedings
- Enriquezs notice of levy be declared null and
void
CA dismissed and found that Enriquez appeared to have acted
in accordance with law, and in keeping with his duties.

ISSUE: Are the BIR warrant of distraint and notice of seizure valid? YES

The claim of the government predicated on a tax lien is superior to the
claim of a private litigant predicated on a judgment. The tax lien
attaches not only from the service of the warrant of distraint, but from
the time the tax became due and payable.

CAB: The distraint on the properties of Maritime, as well as the notice
of their seizure, were made by the CIR long before the writ of execution
was issued by the RTC. Thus, there is no question that at the time the
writ of execution was issued, MCP-1 and MCP-4 were no longer
properties of Maritime.

The power of the court in execution of judgments extends only to
properties unquestionably belonging to the judgment debtor. The
purchaser in an auction sale acquires only such right as the judgment
debtor had at the time of sale. The sheriff is not authorized to attach or
levy on property not belonging to the judgment debtor.

The CA was correct in declaring that there are other remedies available
to the government in connection with its tax claims. Nonetheless, the
filing of a separate action under Rule 39 would only delay final
satisfaction of the tax liabilities of the Maritim. The purpose of Sec. 17,
Rule 39 is to afford a claimant an opportunity to vindicate his
ownership over the property levied upon by the sheriff. But, in the case
at bar, there is no further need for the Republic to establish its rights
over the two barges, because the evidence clearly proves that the
barges are under distraint and, in fact, seized by the CIR.

Sheriff Enriquez claims that he was unaware of any adverse claim over
the subject barges, and the CA gave much weight to this assertion. But,
this claim is belied by the receipt in his office by one Zenriquez of the
letter from the CIR informing Enriquez that the two barges were under
distraint and no longer owned by Maritime.

It was incumbent upon Enriquez to remind members of his staff to
notify him immediately of important communications or papers
affecting the discharge of his official duties. Proof of due receipt by
Enriquezs office prevails over his denial thereof. It was not necessary
that Enriquezs personal receipt of the CIRs letter be shown. It is SOP in
government offices to maintain log books which record the inward and
outward flow of official documents and papers. Besides, Enriquez never
denied that Zenriquez was a member of his office staff.

DISPOSITIVE: CA reversed. The notice of levy and the execution sale of
the two barges are annulled, and Sheriff Enriquez is enjoined from
further proceeding with their sale.