Sampaguita Pictures Inc. v. Jalwindor Manufacturers, Inc.
G.R. No. L-43059, October 11, 1979; De Castro, J.
Facts: Plaintiff-appellant Sampaguita Pictures, Inc. leased the roofdeck of their Sampaguita Pictures Building to Capitol 300 Inc. and agreed that the premises shall be used for social purposes exclusively for the club’s members and guests; that all permanent improvements made by lessee on the premises shall belong to the lessor without any obligation to reimburse; that these be considered as part of the consideration of the monthly rental; and any remodeling, alteration and or addition be at the expense of lessee. Glass and wooden jalousies were then purchased by Capitol from defendant-appellee Jalwindor Manufacturers Inc. which were delivered and installed in the premises. Capitol failed to pay the purchases prompting defendant-appellee to file an action for the collection of a sum of money with petition for preliminary attachment. The parties submitted a Compromise Agreement to the trial court wherein Capitol acknowledged its indebtedness and pending liquidation, the materials purchased will be considered as security. Thereafter, Capitol not only failed to comply with the Compromise Agreement but also failed to pay rentals to plaintiff-appellant, causing their ejectment with damages paid to the latter. When the Sheriff of Quezon City levied upon the materials, plaintiff-appelant filed a third-party claim alleging that it is the owner of the same however, defendant-appellee filed an indemnity bond in favor of the Sheriff and the public auction pushed through with the latter as the highest bidder. Plaintiff-appellant sought to nullify the sale in an action filed with the Court of First Instance and for the issuance of a writ of preliminary injuction against defendant-appellee from detaching the materials. Based on the Stipulation of Facts submitted, the lower court dismissed the complaint. The subsequent motion for reconsideration was likewise denied hence the instant petition.
Issue: WON the lower court erred in holding that there was no legal transfer of ownership of the glass and wooden jalousies from Capitol 300 Inc. to plaintiff-appellant?
Held: Court held in the affirmative. When the glass and wooden jalousies in question were delivered and installed in the leased premises, Capitol became the owner thereof. Ownership is not transferred by perfection of the contract but by delivery, either actual or constructive. This is true even if the purchase has been made on credit, as in the case at bar. Payment of the purchase price is not essential to the transfer of ownership as long as the property sold has been delivered. Ownership is acquired from the moment the thing sold was delivered to vendee, as when it is placed in his control and possession.
Capitol entered into a lease contract with Sampaguita in 1964, and the latter became the owner of the items in question by virtue of the agreement in said contract. When levy or said items was made on July 31, 1965, Capitol, the judgment debtor, was no longer the owner thereof.
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. Execution sales affect the rights of judgment debtor only, and the purchaser in the auction sale acquires only the right as the debtor has at the time of sale. Since the items already belong to Sampaguita and not to Capitol, the judgment debtor, the levy and auction sale are, accordingly, null and void. Decision reversed.
