D.R. CATV SERVICES, INC. COMPLAINANT, VS. JESUS R. RAMOS, SHERIFF III, METROPOLITAN TRIAL COURT, BRANCH 41, QUEZON CITY, RESPONDENT.

D.R. CATV Services versus Ramos

The Case

This is an administrative matter in which D.R. CATV Services, Inc., through its complaint-affidavit, charged Jesus R. Ramos, Sheriff III of the Metropolitan Trial Court of Quezon City, Branch 41, with grave abuse of authority. The charge arose from the way the sheriff implemented a writ of execution issued to enforce the civil liability of Danilo Red in a criminal case for violation of Batas Pambansa Blg. 22. The case matters because it fixes the standard of conduct for sheriffs executing money judgments: promptness is required, but never at the cost of the rules, and never by levying on property belonging to a person who was not adjudged a debtor.

Procedural History

The criminal case for violation of Batas Pambansa Blg. 22 was tried in the Metropolitan Trial Court of Quezon City, which found Danilo Red guilty. On appeal, the Regional Trial Court of Quezon City set aside the conviction but found Danilo Red civilly liable and ordered him to pay the offended party one million one hundred thousand pesos, plus interest and attorney's fees. The Regional Trial Court issued the corresponding writ of execution for the civil aspect, and respondent sheriff was commanded to implement it.

After the complaint-affidavit was filed, the Office of the Court Administrator directed the respondent to comment, and he submitted his comment. The Office of the Court Administrator then submitted a report recommending that he be found guilty of abuse of authority and fined five thousand pesos, with a warning. Acting on that report, the Supreme Court ordered the case re-docketed as a regular administrative matter and required the parties to manifest whether they were willing to submit it for resolution on the pleadings. The respondent manifested in the affirmative, and the case was resolved on the merits.

Facts

Following the writ of execution, respondent sheriff went to the Province of Marinduque. Through a notification dated August 4, 2004, he advised Danilo Red to pay the money judgment within five days from receipt. The complainant alleged that even before the five-day period expired, the respondent levied on equipment owned by D.R. CATV and cut the cable wire connected to lampposts, paralyzing the cable television operations in the town of Buenavista, Marinduque.

The complainant told the respondent who really owned the seized equipment, but was told in an arrogant tone to file a third-party claim. Even after a third-party claim was filed, the respondent refused to release the equipment. The levied equipment, valued at two million six hundred thousand pesos, was placed in the possession of one Jose Antonio Carreon, known as Bong Carreon.

In his comment, the respondent claimed good faith. He said he served the writ on Danilo Red through his mother, Luciana Red, and that Danilo Red called and pleaded for more time. He said that upon being informed that Danilo Red owned and operated D.R. CATV, since the letters D.R. refer to the initials of Danilo Red, he levied on equipment found outside the cable company's office because the office was still closed, and later levied on other company properties. He admitted being told by the complainant, the company secretary, that the properties belonged to the corporation, and admitted bringing the levied equipment to the house of Bong Carreon, explaining that he did so only for safekeeping because there was no bonded warehouse available in the area.

Issues

• Whether or not the respondent sheriff is guilty of grave abuse of authority in the implementation of the writ of execution.
• Whether or not the respondent acted properly in levying on the properties of D.R. CATV Services, Inc. to satisfy the personal civil liability of Danilo Red.
• Whether or not the respondent acted properly in depositing the levied properties in the house of Bong Carreon instead of keeping them safely in his custody.

Applicable Provisions

Section 9, Rule 39 of the Rules of Court provides:

Section 9. Execution of judgments for money, how enforced. (a) Immediate payment on demand. The officer shall enforce an execution of a judgment for money by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all lawful fees.

This provision requires the sheriff to demand immediate payment from the judgment obligor before any levy may be made, and the respondent failed to observe this course.

The same Section 9 continues:

(b) Satisfaction by levy. If the judgment obligor cannot pay all or part of the obligation in cash, certified bank check or other mode of payment acceptable to the judgment obligee, the officer shall levy upon the properties of the judgment obligor of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment. If the judgment obligor does not exercise the option the officer shall first levy on the personal properties, if any, and then on the real properties if the personal properties are insufficient to answer for the judgment.

This provision confines the levy to the properties of the judgment obligor, and D.R. CATV Services, Inc. was never the judgment obligor.

Section 7, Rule 57 of the Rules of Court, as cited in the complaint, provides:

Section 7. Attachment of Real and Personal Property. Real and personal property shall be attached by the sheriff executing the writ in the following manner: (b) Personal property capable of manual delivery, by taking and safely keeping it in his custody, after issuing the corresponding receipt therefor.

This provision required the respondent to keep the levied property safely in his own custody, which he failed to do when he deposited it in the house of Bong Carreon.

Ruling

On the first issue, the Court found the respondent guilty of grave abuse of authority. Sheriffs are responsible for the speedy and efficient implementation of writs of execution, but prompt and efficient service should not be reasons to compromise the integrity of court processes and the proper administration of justice. The respondent gave Danilo Red a five-day grace period, but then disregarded his own deadline and levied on the equipment before the fifth day. The Court called this a farce and held that it betrayed a lack of impartiality.

On the second issue, the Court held that the respondent overstepped his authority when he attached the property of a corporation which had not been adjudged as a debtor. D.R. CATV Services, Inc. has a personality distinct and separate from its stockholders, and is not affected by the personal obligations and transactions of the latter. That Danilo Red is a stockholder and even the President of the corporation is of little moment, because corporate assets belong to the corporation and stockholders have no claim on them as owners, but merely an inchoate right to the same should any remain upon dissolution after all corporate creditors have been paid. The Court stressed the hornbook law that corporate personality is a shield against the personal liability of its officers or the personal indebtedness of its stockholders. The respondent's excuse that he pierced the veil of corporate fiction was presumptuous, because that function is purely judicial in nature and beyond the scope of the ministerial duties of a sheriff.

On the third issue, the Court held that the respondent exhibited imprudence in his duty of safekeeping the levied properties. After levying on the corporation's equipment, he brought them to the house of Bong Carreon, in violation of the rule requiring him to safely keep them in his custody. The alleged lack of a facility to store the attached properties was no justification. He should have deposited them in a bonded warehouse or, if not feasible, should have sought prior authorization from the writ-issuing court before depositing them in the house of Bong Carreon, who appeared to be related to the judgment creditor.

Doctrine

A sheriff executing a money judgment must first demand immediate payment of the full amount from the judgment obligor before levying on property, as required by Section 9, Rule 39 of the Rules of Court. The levy may reach only the properties of the judgment obligor; property belonging to a corporation may not be taken to satisfy the personal debt of its stockholder or officer, because corporate personality is a shield against the personal liability of its officers and the personal indebtedness of its stockholders. A sheriff has no authority to pierce the veil of corporate fiction, that being a purely judicial function beyond his ministerial duties. Finally, levied personal property capable of manual delivery must be taken and safely kept in the sheriff's custody under Section 7, Rule 57 of the Rules of Court; if no bonded warehouse is available, the sheriff must seek prior authorization from the writ-issuing court before depositing the property elsewhere. Any conduct of court personnel must not only be characterized by propriety and decorum but, above all else, be beyond suspicion.

Disposition

The Court adjudged respondent Jesus R. Ramos, Sheriff III, guilty of grave abuse of authority and ordered him to pay a fine of five thousand pesos, with a stern warning that a repetition of the same or similar act shall be dealt with more severely, and directed that a copy of the resolution be attached to his personal records.

Remember This

A sheriff may not levy on corporate property to satisfy the personal judgment debt of a stockholder, and he may not pierce the corporate veil, that being a judicial function. Examiners use this case to test the ministerial duties of sheriffs under Section 9, Rule 39 and Section 7, Rule 57 of the Rules of Court, and the separate personality of corporations.