Challenging Ownership The Affidavit Requirement In Third Party Claims Over Levied Property

When a sheriff levies property to satisfy a judgment, someone else may step forward and say, "That property is mine." Philippine law allows this through a third-party claim. But as the Supreme Court made clear in Bacos v. Arcega, filing a claim requires more than just asserting ownership — the claimant must prove it with specific facts and credible evidence.

The Case: A Sale That Raised Suspicion

Domingo Arcega won an illegal dismissal case against Viabel International Garments, Inc. and Marlon Viado. When the judgment became final, the NLRC sheriff levied 28 sewing machines belonging to the company.

On the day of the scheduled auction, Maria Fe Bacos filed a third-party claim. She said Viado had sold her the machines in January 1998 for P150,000, as shown by a notarized Deed of Absolute Sale.

The Labor Arbiter dismissed her claim, finding the deed spurious. The NLRC and Court of Appeals agreed. When the case reached the Supreme Court, Bacos argued that Section 16, Rule 39 of the Rules of Civil Procedure only requires an affidavit of title — not proof of ownership.

The Rule: What a Third-Party Claim Requires

Section 16, Rule 39 states that if levied property is claimed by someone other than the judgment debtor, that person must make an affidavit of title or right to possession, stating the grounds of such right or title. The affidavit must be served on the sheriff and the judgment obligee.

The NLRC's own Manual of Instructions for Sheriffs imposes the same requirement. Sections 2 and 3, Rule VI of the Manual provide that the claimant must state the grounds of title or right and that the Labor Arbiter shall conduct a hearing to resolve the claim's validity.

The Ruling: A Mere Affidavit Does Not Suffice

The Supreme Court denied Bacos's petition. The Court held that while the rule requires an affidavit, the affidavit must state the grounds of the claim. A bare assertion of ownership is not enough — the claimant must specify the circumstances supporting the claim.

In Bacos's case, the problems were numerous. Her notice of third-party claim did not state when she acquired the machines or from whom. She initially failed to attach the deed of sale. When she finally produced it, the document was not in the notary public's records. The Court adopted the lower courts' finding that this absence was a "badge of fraud and simulation."

The Court also emphasized that it is not a trier of facts. The factual findings of the Labor Arbiter and NLRC, affirmed by the Court of Appeals, are given high respect unless unsupported by evidence.

Practical Takeaways

• A third-party claim must be supported by an affidavit stating the specific grounds of ownership or right to possession. General assertions will not do.
• Attach supporting documents at the time of filing. Producing a deed only after being challenged looks like a "Johnny-come-lately" claim.
• A notarized document is not automatically credible. If the notary did not include it in his notarial report, courts may treat its absence as a badge of fraud.
• Be prepared to present corroborating evidence, such as the notary's testimony or affidavit, especially if the deed's authenticity is questioned.
• In labor cases, the NLRC sheriff must suspend proceedings upon a third-party claim and the Labor Arbiter must resolve its validity within ten working days.

The lesson from Bacos v. Arcega (G.R. No. 152343, January 18, 2008) is straightforward: a third-party claim is a serious legal remedy, not a delay tactic. Claimants must come prepared with specific facts, solid evidence, and credible documents — or risk losing both the property and the claim.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.