Power Sector Assets and Liabilities Management Corporation (PSALM) Vs. Maunlad Homes, Inc.

(G.R. No. 215933 February 8, 2017)

Facts: Maunlad Homes, Inc., respondent, filed unlawful detainer case with damages against National
Power Corporation (NPC). After trial, MTCC ordered NPC to vacate the subject premises and surrender
physical possession thereof to respondent and pay reasonable compensation. Respondent filed motion for
Execution which was opposed by NPC. RTC denied motion for reconsideration of NPC and granted the
respondent’s motion for execution. Respondent then filed an urgent motion for issuance of a Break Open
Order since the sheriff who tried to implement the writ of execution, by serving the notice of levy on the
NPC Warehouse at Barangay Lagundi, Mexico, Pampanga, was prevented by the security guards assigned
therein.
The NPC argued that the warehouse is being used both by it and the Power Sector Assets and
Liabilities Management Corporation (herein petitioner PSALM), an entity created and existing by virtue of
Republic Act No. 9136, the Electric Power Industry Reform Act of 2001 (EPIRA Law); that the said law
provides that the ownership and all generation assets, IPP contracts and other NPC disposable assets are
transferred to PSALM; and that as of the moment, the ownership of the said items stored in the said
warehouse cannot be established with certainty as they are in the process of determining what properties
may be retained by the latter.
RTC issued a Break Open Order and Notice of Levy on execution pending appeal of personal
properties/sale of seven (7) units transformer radiator fins, one (1) unit power transformer with Serial No.
77740395, and four (4) pieces angle bars.
Petitioner filed an Affidavit10 of third-party claim with the sheriff pursuant to Section 16, Rule 39
of the Rules of Court, and alleging that it is the owner of the levied properties pursuant to the EPIRA Law.
Petitioner also filed a Manifestation with Urgent Ex Parte Motion for Issuance of Status Quo Order with
the RTC arguing that it is the owner of the subject properties pulled out by the sheriff by operation of law
and for the nullification of the levy and restoration of possession. RTC denied PSALM.
PSALM filed a petition for certiorari but CA dismissed it. The CA found, among others, that
contrary to the allegation of petitioner that there exists no plain, speedy and adequate remedy obtaining
under the circumstances, Section 16, Rule 3 9 of the Rules of Court provides a more expeditious and
encompassing recourse in case a property belonging to a third person is placed under the coverage of the
writ of execution and, thereafter, sold at public auction.
Issue: Whether the CA erred in dismissing petitioner's petition for certiorari assailing the denial of the
latter's third-party claim for being a wrong remedy.
Ruling: No, the Supreme Court speaking through Associate Justice Peralta, ruled that CA did not err in
dismissing petitioner’s petition for certiorari. if the property levied by virtue of a writ of execution is
claimed by a third person who is not the judgment obligor, Section 16 of Rule 39 of the 1997 Rules of Civil
Procedure provides for the remedy of such third party claimant in which the third-party claimant may
execute an affidavit of his title or right to the possession of the property levied, and serve the same to the
officer making the levy and a copy thereof to the judgment creditor. This remedy is known as terceria. In
such separate action, the court may issue a writ of preliminary injunction against the sheriff enjoining him
from proceeding with the execution sale, which is a speedy and adequate remedy to immediately relieve
petitioner from the adverse effects of the lower court's judgment. Thus, the CA did not err in saying that
Section 16 of Rule 39 provides a more expeditious and encompassing recourse from the denial of its third-
party claim.
Wherefore, petition is denied.

Momorco Import Company, Inc., vs Villamena

Facts: On September 23, 1997, Villamena, respondent, filed against Momorco Import Company, In.,
petitioner, a complaint for "Nullification of Deed of Sale and of the Title Issued" pursuant thereto alleging
that she is the owner of a parcel of land with improvements located in Caloocan City and covered by
Transfer Certificate of Title No. 204755. A letter from petitioner corporation dated June 12, 1997, informed
respondent that TCT No. 204755 over aforesaid property had been cancelled and TCT No. C-319464 was
issued in lieu thereof in favor of petitioner corporation on the strength of a purported Special Power of
Attorney executed by Dominador Villamena, her late husband, appointing her, respondent Felicidad
Villamena, as his attorney-in-fact and a deed of absolute sale purportedly executed by her in favor of
petitioner corporation on May 21, 1997, the same date as the Special Power of Attorney. The Special Power
of Attorney dated May 21, 1997 is a forgery. Her husband Dominador died on June 22, 1991. The deed of
sale in favor of petitioner corporation was falsified. What respondent executed in favor of Mamarco was a
deed of real estate mortgage to secure a loan of P100,000.00 and not a deed of transfer/conveyance.
On August 19, 1998, respondent filed a motion to declare petitioner corporation in default for failure of
aforesaid petitioner to file its answer as of said date despite the filing of an Entry of Appearance by its
counsel dated May 4, 1998. On September 10, 1998 petitioner corporation filed its Answer with
Counterclaim which denied the allegations in the complaint; alleged that respondent and her daughter Lolita
accompanied by a real estate agent approached the President of Momarco for a loan of P100,000.00; offered
their house and lot as collateral; and presented a Special Power of Attorney from her husband. She was
granted said loan. Aforesaid loan was not repaid. Interests accumulated and were added to the principal.
Respondent offered to execute a deed of sale over the property on account of her inability to pay.
Respondent presented to petitioner corporation a deed of sale and her husband's Special of Power Attorney
already signed and notarized.
RTC rendered the default judgment nullifying the assailed deed of absolute sale and the transfer certificate
of title issued pursuant thereto; and ordering the Register of Deeds of Caloocan, City to cancel the
petitioner's Transfer Certificate of Title No. C-319464, and to reinstate the respondent's Transfer Certificate
of Title No. 204755. It concluded that the act of the petitioner's counsel of formally entering an appearance
in the case had mooted the issue of defective service of summons; and that the respondent had duly
established by preponderance of evidence that the purported special power of attorney was a forgery. CA
promulgated the assailed decision affirming the default judgment upon finding that the RTC did not commit
any error in declaring the petitioner in default and in rendering judgment in favor of the respondent who
had successfully established her claim of forgery by preponderance of evidence.
Issue: Whether or not the CA gravely erred in upholding the default judgment of the RTC; in ordering its
answer stricken off the records; in allowing the respondent to adduce her evidence exparte; and in rendering
the default judgment based on such evidence.
Ruling: No, the Supreme Court speaking through Associate Justice Bersamin, ruled that the appeal lacks
merit.
The RTC and the CA acted in accordance with the Rules of Court and the pertinent jurisprudence. The
petitioner was insincere in assailing the default judgment, and its insincerity became manifest from its
failure to move for the lifting of the order of default prior to the rendition of the default judgment. The CA
rightly observed that the petitioner had apparently forsaken its "expeditious remedy" of moving soonest for
the lifting of the order of default in favor of "wagering" on obtaining a favorable judgment. The petitioner
would not do so unless it intended to unduly cause delay to the detriment and prejudice of the respondent.
Wherefore, the Court denies petition affirming decisions of CA.
Doctrine: A default judgment is frowned upon because of the policy of the law to hear every litigated case
on the merits. But the default judgment will not be vacated unless the defendant satisfactorily explains the
failure to file the answer, and shows that it has a meritorious defense.