Valor actual neto (VAN)

How do you execute judgment for money? Contractual debts or damages.

Example, the defendant is ordered to pay defendant P1 million with interest, how does the sheriff enforce that? Section 9 provides a detailed explanation on how judgment for money is enforced. Let us go over the first paragraph:

Sec. 9. Execution of judgments for money, how enforced. -

(a) Immediate payment on demand. - The officer

by demanding from the judgment obligor the immediate payment of the full amount stated in the writ of execution and all lawful fees. The judgment obligor shall pay in cash, certified bank check payable to the judgment obligee, or any other form of payment acceptable to the latter, the amount of the judgment debt under proper receipt directly to the judgment obligee or his authorized representative if present at the time of payment.

The lawful fees shall be handed under proper receipt to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.

STEPS: (under paragraph [a])

1.) The sheriff must demand payment from the obligor;

2.) The obligor can pay in cash, certified bank check payable to the judgment obligee (creditor) or any other form of payment acceptable to the latter. The payment shall go to the obligee;

3.) The lawful fees shall be paid to the executing sheriff who shall turn over the said amount within the same day to the clerk of court of the court that issued the writ.

This assumes that the obligee is present with sheriff. Suppose the creditor is not around? Let us go to the second paragraph:

Section 9 [a], 2nd par. – If the judgment obligee or his authorized representative is not present to receive payment, the judgment obligor shall deliver the aforesaid payment to the executing sheriff.

The latter shall turn over all the amounts coming into his possession within the same day to the clerk of court of the court that issued the writ, or if the same is not practicable, deposit said amounts to a fiduciary account in the nearest government depository bank of the Regional Trial Court of the locality.

If the plaintiff is not there, the payment is made to the sheriff and he is supposed to endorse it to the clerk of court. The clerk of court will look for the obligee to remit the money.

In the second sentence, this usually happens if the execution is to be done outside of the locality. For example, the decision in Davao will be enforced in Cotabato. So, the sheriff in Cotabato will be the one to enforce and he will give

the payment to the clerk of court there who in turn will transmit the money to the clerk of court in Davao. This is because the decision to be executed is one in Davao.

Let us go to the third paragraph:

The clerk of said court shall thereafter arrange for the remittance of the deposit to the account of the court that issued the writ whose clerk of court shall then deliver said payment to the judgment obligee in satisfaction of the judgment. The excess, if any, shall be delivered to the judgment obligor while the lawful fees shall be retained by the clerk of court for disposition as provided by law. In no case shall the executing sheriff demand that any payment by check be made payable to him.

This assumes that the property of the defendant which was levied in Cotabato but judgment is one which originated in Davao – clerk to clerk.

The last sentence says “In no case shall the executing sheriff demand that any payment by check be made payable to him.” It shall be payable to the obligee. I think what the SC would like to avoid here is that which happened in the case of PAL – a labor case where PAL paid check payable to the sheriff. The sheriff ran away with the check. PAL was made to pay all over again.

(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.

So, under paragraph [a], the first step is when the judgment debtor has enough money, bayaran niya in cash or check.

Q: Suppose walang pera, or the cash is not sufficient. What will the sheriff do?

A: He shall levy upon the properties of the judgment obligor not otherwise exempt from execution. In the vernacular term, sasabihing ‘na-sheriff’ ka.

Q: Define levy.

A: Levy is the act whereby a sheriff sets apart or appropriates, for the purpose of satisfying the command of the writ, a part or the whole of the judgment-debtor’s property. (Valenzuela vs. De Aguilar, L-18083-84, May 31, 1963) Normally, this is done on personal property. Kung lupa naman, they will annotate on the title. Parang mortgage ba.

Q: What is the importance of levy with respect to execution of a money judgment?

A: Levy is a pre-requisite to the auction sale. In order that an execution sale may be valid, there must be a previous valid levy. A sale not preceded by a valid levy is void and the purchaser acquires no title. (Valenzuela vs. De Aguilar, L-18083-84, May 31, 1963)

Q: What kind of property can be levied?

A: Any – real, personal, tangible, intangible – except those properties exempt from execution.

Q: Does the debtor have the right to tell the sheriff what property he should levy?

A: YES. The law gives the debtor or defendant the option to immediately choose which property or part thereof may be levied upon sufficient to satisfy the judgment. Example: I am the debtor and I have many properties. And the sheriff would like to levy on my house and lot, or ‘yung Toyota Altis ko. Under the law, I have the right to choose among them.

The phrase “giving the latter the option to immediately choose which property or part thereof may be levied upon, sufficient to satisfy the judgment.” This did not appear under the old law. This is taken from the case of PHILIPPINE MILLS vs.

DAYRIT (192 SCRA 177), where the SC said the debtor is given the option of which property shall be levied.

And the sequence of levying is to levy the personal properties first. Then real properties if personal properties are not sufficient.

Under the second paragraph of [b], when the sheriff levies on the property of the judgment debtor and the judgment debtor has more than sufficient property

to cover the judgment debt, the sheriff cannot levy all the properties. Or else, he will be made liable. For example, the debt is only P 30,000, tapos ang i-levy mo kotse (Toyota Altis) at bahay, which worth millions? My golly! That’s too much!

You sell only up to the point that the judgment will be satisfied.

Q: But if it is real property or intangible personal property like shares of stock, debts, credits (collectibles), can you levy on these?

A: YES. And under the last paragraph of [b] They may be levied upon in like manner and with like effect as under a writ of attachment under Rule 57 on attachment.

GARNISHMENT – HOW TO LEVY

Paragraph [c] of Section 9 is on how to levy intangibles. When you want to levy or you want to execute on intangible property, the legal term there is garnishment.

(c) Garnishment of debts and credits. - The officer may levy on debts due the judgment obligor and other credits, including bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. Levy shall be made by serving notice upon the person owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. The garnishment shall cover only such amount as will satisfy the judgment and all lawful fees.

The garnishee shall make a written report to the court within five (5) days from service of the notice of garnishment stating whether or not the judgment obligor has sufficient funds or credits to satisfy the amount of the judgment. If not, the report shall state how much funds or credits the garnishee holds for the judgment obligor. The garnished amount in cash, or certified bank check issued in the name of the judgment obligee, shall be delivered directly to the judgment obligee within ten (10) working days from service of notice on said garnishee requiring such delivery, except the lawful fees which shall be paid directly to the court.

In the event there are two or more garnishees holding deposits or credits sufficient to satisfy

shall have the right to indicate the garnishee or garnishees who shall be required to deliver the amount due; otherwise, the choice shall be made by the judgment obligee.

The executing sheriff shall observe the same procedure under paragraph (a) with respect to delivery of payment to the judgment obligee. (8a, 15a)

Q: So, what are these properties which may be the subject of garnishment?

A: Credits which include bank deposits, financial interests, royalties, commissions and other personal property not capable of manual delivery – intangibles bah! You send a notice upon the person owing such debts or having in his possession or control such credits. And it shall cover only such amount as will satisfy the judgment.

Example of garnishment: bank account. I will file a case against you, talo ka. I learned that you have a deposit with Sanikoh Bank. Puwede kong habulin yan ba, because that is credit. In obligations and contracts, the relationship of the depositor and the bank is that of a creditor and debtor. It is not a contract of deposit because actually, the bank is borrowing money from you. Kaya nga, it pays you interest eh.

So, under garnishment, the bank is being commanded not to pay you but instead pay the sheriff. Yaan!! Yan ang concept ng garnishment. Garnishee refers to the debtor, like the bank. When the bank deposit is garnished, the second paragraph tell us what the bank will do. And if there are 2 or more banks na ma-garnish, under the next paragraph, the debtor obligor will determine. If he does not exercise his option, then the judgment creditor will determine.