Dorotea Tanongon v. Felicidad Samson

Summary

This case involves a third-party ownership claim during execution of a labor judgment. After CAYCO Marine Service employees won a P1.19 million labor judgment against their employer and owner Iluminada Cayco Olizon, a motor tanker was levied upon for execution. Dorotea Tanongon claimed ownership based on a July 29, 1997 sale from Olizon for P1.1 million, just days before the levy. The Supreme Court affirmed the Court of Appeals' finding that Tanongon was a buyer in bad faith, as the sale occurred shortly after the writ of execution was issued and was presumptively fraudulent under Civil Code Article 1387. The Court ruled that third-party claims do not automatically prevent execution, especially where circumstances point to fraudulent transfers designed to evade creditor claims. The disputed sale was deemed void ab initio rather than merely rescissible.