CIR vs. NLRC (G.R. No.

74965 November 9, 1994)

FACTS:
On January 12, 1984 the CIR sent two letters of deand to the res!ondent "ar#t#e Co!any of the
$h#l#!!#nes for de%&#en&y &oon &arr#er's ta(, %(ed ta(, )* Coer&#al +ro,er's ta(, do&uentary
sta! ta(, #n&oe ta( and w#thhold#n- ta(es #n the total aount of $1.,284,882/40/
The assessent 1e&ae %nal and e(e&utory as "ar#t#e Co/ d#d not &ontest #t/
It fa#led !ay #ts ta( l#a1#l#ty, the CIR #ssued warrants of d#stra#nt of !ersonal !ro!erty and le2y of real
!ro!erty of "ar#t#e Co/ Co!#es of the warrants, were ser2ed on January 28, 1980 on res!ondent's
a&&ountant/
CIR as,ed the 3a1or Ar1#ter to annul the sale and to en4o#n the sher#5 fro d#s!os#n- of the !ro&eeds
of the sale or, #n the alternat#2e, to re#t the to the +IR so that the aount &ould 1e a!!l#ed to the
!ayent of !r#2ate res!ondent "ar#t#e Co!any's ta( l#a1#l#t#es/
3a1or Ar1#ter den#ed the ot#on on the -round that CIR fa#led to show that the 1ar-es wh#&h were
le2#ed u!on #n e(e&ut#on and sold at !u1l#& au&t#on had 1een 2al#dly !la&ed under &onstru&t#2e
d#stra#nt/

3a1or Ar1#ter l#,ew#se re4e&ted CIR's &ontent#on that the -o2ernent's &la# for ta(es was !referred
under Art/ 224., #n relat#on to Art/ 2241617 of the C#2#l Code, on the -round that under th#s !ro2#s#ons
only ta(es and fees wh#&h are due on s!e&#%& o2a1les en4oy !referen&e, whereas the ta(es &la#ed
1y !et#t#oner were not due on the four 1ar-es #n 8uest#on/
The order was a!!ealed to the 93RC/
93RC a:red the den#al of the CIR's ot#on/
;en&e th#s !et#t#on for certiorari/
ISS<=:
>hen does a ta( l#en atta&h?
;=3@: The tax lien attaches not only from the service of the warrant of distraint of personal
property but from the time the tax income becomes due and payable/
It #s settled that the &la# of the -o2ernent !red#&ated on a ta( l#en #s su!er#or to the &la# of
a !r#2ate l#t#-ant !red#&ated on a 4ud-ent/ The ta( l#en atta&hes not only fro the ser2#&e of
the warrant of d#stra#nt of !ersonal !ro!erty 1ut fro the t#e the ta( 1e&ae due and
!aya1le/ +es#des, the d#stra#nt on the su14e&t !ro!ert#es of the "ar#t#e Co!any of the
$h#l#!!#nes as well as the not#&e of the#r se#Aure were ade 1y !et#t#oner, throu-h the
Co#ss#oner of the Internal Re2enue, lon- 1efore the wr#t of the e(e&ut#on was #ssued 1y the
Re-#onal Tr#al Court of "an#la, +ran&h B1/ There #s no 8uest#on then that at the t#e the wr#t of
e(e&ut#on was #ssued, the two 627 1ar-es, "$CC1 and "C$C4, were no lon-er !ro!ert#es of the
"ar#t#e Co!any of the $h#l#!!#nes/ The !ower of the &ourt #n e(e&ut#on of 4ud-ents
e(tends only to !ro!ert#es un8uest#ona1ly 1elon-#n- to the 4ud-ent de1tor/ =(e&ut#on sales
a5e&t the r#-hts of the 4ud-ent de1tor only, and the !ur&haser #n an au&t#on sale a&8u#res
only su&h r#-ht as the 4ud-ent de1tor had at the t#e of sale/ It #s also wellCsettled that the
sher#5 #s not author#Aed to atta&h or le2y on !ro!erty not 1elon-#n- to the 4ud-ent de1tor/
9or #s there any er#t #n the &ontent#on of the 93RC that ta(es are a1solutely !referred &la#s
only w#th res!e&t to o2a1le or #o2a1le !ro!ert#es on wh#&h they are due and that s#n&e
the ta(es sou-ht to 1e &olle&ted #n th#s &ase are not due on the 1ar-es #n 8uest#on the
-o2ernent's &la# &annot !re2a#l o2er the &la#s of e!loyees of the "ar#t#e Co!any of
the $h#l#!!#nes wh#&h, !ursuant to Art/ 11D of the 3a1or Code, Een4oy %rst !referen&e/E