Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 78012 November 29, 1988
DELTA MOTORS CORPORATION,
petitioner,
vs.
COURT OF APPEALS, TENTH DIVISION and NATALIA CARPENA OPULENCIA, respondents.
Salva, Villanueva, Valera & Associates Law Offices for petitioner.
Amado A. Amador, Jr., for private respondent.
MELENCIO-HERRERA, J.:
Sought in this Petition are a review and a reversal of the Decision of respondent Court of Appeals, * promulgated on 19 February 1987, in CA-G.R. SP. No. 08406, entitled "Opulencia vs. Hon. de la Cruz, et al.," as well as its Resolution of 2 April 1987 denying reconsideration.
The spouses Manuel and Natalia Carpena Opulencia (hereafter the OPULENCIAS) became indebted to petitioner Delta Motor Corporation (DELTA, for brevity) for the construction of the building, supply and installation of their ice plant equipment in the total amount of P1,438,090.58. As security for the payment of these obligations, they executed a real estate mortgage over their land, building and ice plant equipment in favor of DELTA.
For failure of the OPULENCIAS to pay their obligation, DELTA filed a Complaint against them on 21 May 1975, docketed as Civil Case No. 21335, before the Regional Trial Court of Pasig, Branch CLX.
On 23 August 1978, the OPULENCIAS entered into a Compromise Agreement confessing to an obligation of P1,644,496.19 plus 12% annual interest, payable without need of demand in eighty-four [84] equal monthly installments beginning 30 April 1978. An acceleration clause in the agreement provided for immediate demandability in case of default in any one payment.
The Trial Court approved the aforesaid Agreement on 29 November 1978.
On 6 August 1979, for failure of the OPULENCIAS to comply with the terms and conditions of the Compromise Agreement, the Trial Court issued a Writ of Execution for the full compromise amount.
Pursuant thereto, on 27 August 1979, a Special Sheriff levied execution, not on the Torrens Title covering the mortgaged properties, but on two [21 Tax Declarations at the Office of the City Assessor of Batangas City. The first, Tax Declaration No. 44126, covered 4,475 square meters of land at Batangas City; and the second, Tax Declaration No. 14266, covered the improvement thereon, an ice plant built on the land.
In his Notice of Sale, dated 11 January 1980, the Special Sheriff set the auction sale of both properties for 30 April 1980. On the said date, the Special Sheriff issued a Certificate of Sale to DELTA as the highest bidder at the auction sale on a bid of P2,147,162.49.
The sale, however, was not registered and annotated at the back of the covering title, OCT No. RO-124 (0-722), of the Register of Deeds of Batangas, until approximately four [4] years later, or, on 26 June 1984 for the reason that the title still had to be judicially reconstituted after the said title was burned when the Office of the Register of Deeds of Batangas City was razed by fire and the owner's copy was also lost.
The one-year period within which to redeem the mortgaged properties having lapsed without any redemption having been effected, a Final Deed of Sale on the same bid of P2,147,162.49 was issued on 31 August 1985 in favor of one Jose Ch. Alvarez whose name appeared in the said Final Deed of Sale as the highest bidder of the properties sold, instead of DELTA, although the first Certificate of Sale issued after the 30 April 1980 auction sale listed DELTA as the highest bidder.
On 27 September 1985 the Trial Court approved the Sheriff s Final Deed of Sale and issued a Writ of Possession on 30 September 1985.
On 29 October 1985 the OPULENCIAS filed an Urgent Petition for Relief from execution of judgment and to set aside the Writ of Possession on the ground of irregularity in the implementation of the Writ of Execution by the Sheriff. The Petition was denied by the Trial Court on 23 December 1985.
On a Petition for certiorari and Prohibition, the Appellate Court, in its Decision promulgated on 19 February 1987, reversed the Trial Court holding that "the actuations of the special sheriff from levy on the properties to the issuance of certificates of sale were attended by irregularities serious enough to invalidate all proceedings had pursuant to the writ of execution" (p. 3, CA Decision, p. 109, Rollo), "without however prejudice to whatever lights which have accrued to Delta from the August 23, 1978 Compromise Agreement" (p. 6, CA Decision, p. 112, Rollo).
It is the aforesaid judgment of reversal, invalidating the approval by the Trial Court on 27 September 1985 of the Final Deed of Sale, and its issuance of a Writ of Possession on 30 September 1985, that is assailed in the instant Petition, predicated on the following averments:
I. The decision in Civil Case No. 21335(Delta vs. Opulencia, et al.) has long become final and executory.
II. Private respondent bound their properties under the compromise agreement.
III. Execution issues as a matter of right and is mandatory when the judgment becomes final, this petition filed in the Court of Appeals was improper to alter or repeal a ministerial act.
IV. Under the facts and the law, a writ of possession must issue ministerially.
V. Possession of premises have been delivered or transferred to bidder as shown by notice of delivery.
VI. Honorable Court of Appeals erred in not dismissing the petition for certiorari, etc.
VII. Private respondent is barred by laches, having voluntarily ratified the execution of the judgment.
VIII. Hon. Court of appeals erred in holding that there was no valid levy and no valid notice of sale.
IX. That the RTC Judge in denying the petition for relief and to set aside writ of possession did not act without or in excess of jurisdiction and with grave abuse of discretion.
X. The appearance of two (2) certificates of sale did not and will not prejudice private respondent. (pp. 5-7, Memorandum for the Petitioner, pp. 175-177, Rollo)
We resolved to give due course and required the submittal of memoranda by the parties with which they have complied.
There is no gainsaying that, as DELTA alleges, the Decision in Civil Case No. 21335 (Delta vs. Opulencia, et al.) approving the Compromise Agreement between the parties had become final and executory; that the OPULENCIAS bound their properties under the Compromise Agreement of 23 August 1978; that execution issues as a matter of right once the judgment has become final and that a Writ of Possession follows ministerially thereafter. These are not the points in controversy, however. They are of marginal relevance.
The threshold issue is the validity of the levy and sale on execution and of the Writ of Possession which ensued thereafter.
The factual findings of respondent Appellate Court are: (1) that there was no valid levy on the properties so that there was nothing that the Sheriff could have sold, citing a Certification of the Register of Deeds of Batangas City that no notice of levy or Writ of Execution was ever presented or filed in that Office for registration and annotation at the back of OCT No. 0-772: (2) that even assuming that there had been a valid levy, still, proper posting was not effected as required by Section 18, Rule 39 of the Rules of Court. The Sheriffs Return mentioned the publication of the notice of sale but nothing was mentioned of the required posting. And more significantly, (3) the Special Sheriff issued two [2] Certificates of Sale over the same properties in favor of two [2] different buyers both as the highest bidders, one of whom was DELTA and the other, Alvarez, although respondent Appellate Court found as a fact that Alvarez was not a participant at the auction sale much less the highest bidder. As said Court held, "the conclusion must be that Alvarez' certificate of sale is spurious and constitutes an attempt to vary the results of official actuations" (p. 5, CA Decision, p. 111, Rollo).<äre||anº•1àw>
Not only are the foregoing findings of fact of respondent Appellate Court entitled to the highest respect from, and binding, on this Court but its conclusions derived from those facts are supported by law and jurisprudence.
It is basic that sales on execution must be preceded by a prior levy on execution. The levy on execution of a judgment consists in the act or acts by which an officer sets apart or appropriates a part or the whole of the property of the judgment debtor for purposes of the prospective execution sale (Llenares vs. Valdevella et al., 46 Phil. 358 [1924]). Levy is the essential act by which the property is set apart for the satisfaction of the judgment and taken into custody of the law (Del Rosario vs. Yateo, L-18735, December 29, 1966, 18 SCRA 1263). And in case of levy upon a realty, notice of levy is required to be filed with the Register of Deeds.
To effect a levy upon a realty , the sheriff is required to do two specific things: (1) File with the Register of Deeds a copy of the order, description of the attached property and notice of attachment, and (2) Leave with the occupant of the property copy of the same order, description and notice. These are prerequisites to a valid levy, non-compliance with any of which is fatal. For the weight of authority is to the effect that a special statutory provision respecting the manner of carrying out levy of attachment must be strictly complied with, and departure therefrom shall invalidate the levy. (Philippine Surety and Ins. Co. Inc. vs. Zabal, L-21556, October 31, 1967, 21 SCRA 682). [Emphasis supplied].
In this case, notice of levy was filed with the City Assessor's Office on two tax declarations covering the properties in question and not on the title itself as provided for by the Land Registration Act, which requires all transactions respecting property covered by Torrens Titles to be recorded with the Register of Deeds. Consequently, the levy made by the Special Sheriff herein could not bind the land nor create a lien on the property.
While the original of OCT No. 0-722 was admittedly burned on 23 May 1979 and the owner's copy lost, copy of the levy could have been preliminary furnished the Register of Deeds. Besides, the Appellate Court found, as a fact, that DELTA had in its possession authentic copies of Decree No. N-142968 from which OCT No. 722 was issued and of the technical description of the land (p. 3, CA Decision, p. 109 Rollo). The loss of the original and copy of the title, therefore, was no justification for failure to cause the annotation of the lien on execution with the Register of Deeds.
Section 18, Rule 39 of the Rules of Court also provides that, before any sale of real property on execution, notice thereof must be given by posting copies of the notice of sale for twenty [20] days in three [3] public places in the municipality or city where the property is situated and also where the property is to be sold, and if the assessed value of the property exceeds P400.00, copy of the notice is to be published once a week, for the same period in a newspaper of general circulation in the corresponding province or city. That compliance with said requisites was inadequate is shown by the Sheriffs Return, which mentioned only the publication but not the posting. The presumption that official duties were regularly performed (Section 5 [m], Rule 131) cannot be invoked considering the peculiar circumstances obtaining.
The issuance of a Writ of Possession is complementary to a Writ of Execution and is likewise dependent on the valid execution of the procedural stages preceding it. Any flaw afflicting any of those stages, affects the validity of its issuance (Cometa vs. IAC, L-69294, June 30, 1987, 151 SCRA 563).
The irregularity of having two highest bidders at the same Sheriffs sale, both offering the same highest bid for the same property has not been satisfactorily explained. A Certificate of Sale was issued to DELTA as the highest bidder on 30 April 1980 after the auction sale (Annex "D", p. 42, Rollo). But the Final Deed of Sale was issued on 31 August 1985 in favor of one Jose Ch. Alvarez, who was listed therein as the highest bidder of the property sold in the auction sale (Annex "E", p. 43, Rollo). This runs counter to Section 35, Rule 39 of the Rules of Court explicitly providing that if no redemption be made within twelve [12] months after the sale, the purchaser, or his assignee, is entitled to a conveyance and possession of the property. Alvarez has not been shown to be the assignee of DELTA.
DELTA'S posture that said two [2] sales will not in any way prejudice the OPULENCIAS, since DELTA recognizes the sale of the property to Alvarez, can not be allowed to overcome the irregularities in the proceedings concerning the sale. An anomalous situation cannot pass unchallenged. The OPULENCIAS acted seasonably after the approval by the Trial Court of the Sheriffs Final Deed of Sale and its issuance of the Writ of Possession and they cannot be held barred by laches. It was not the compromise judgment of the Trial Court of 29 November 1978 that they were assailing but the execution of that judgment.
It should be stressed, however, that while irregularities attended the proceedings concerning the execution sale sufficient to affect the Writ of Possession which is but a consequence thereof, the OPULENCIAS are bound by the terms of the Compromise Agreement they had executed on 23 August 1978 and approved by the Trial Court on 29 November 1978. They cannot be allowed to renege on the same on the ground that the husband did not sign said Agreement it appearing that the spouses mortgaged the same properties in favor of DELTA to secure the very same judgment obligation and that in their Petition for Reconstitution of OCT 0-722, said spouses acknowledged their obligation to DELTA, thereby evidencing that the obligation is actually conjugal. It is still incumbent upon the OPULENCIAS to pay their judgment obligation to DELTA plus interest at the legal rate and back real estate taxes paid thus far.
WHEREFORE, the judgment appealed from is hereby MODIFIED in that the spouses Manuel and Natalia Opulencia are hereby ordered to pay Delta Motors Corporation the sum of P2,147,162.49 plus interest at the legal rate, back real estate taxes, and costs, the same to be paid into the Trial Court within a period of ninety [90] days from the date of service of this judgment, and in case of default of such payment, the properties mortgaged shall be sold in the manner and under the regulations that govern sales of real estates under execution, the proceeds realized to be turned over to petitioner Delta Motors Corporation.
SO ORDERED.
Paras, Padilla, Sarmiento and Regalado,JJ., concur.
Footnotes
* Penned by Justice Serafin E. Camilon and concurred in by Justices Ricardo L. Provone, Jr. and Bonifacio A. Cacdac, Jr.
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