Manila
THIRD DIVISION
G.R. No. 124347 July 21, 1997
CMS STOCK BROKERAGE, INC., petitioner-appellant,
vs.
COURT OF APPEALS, HONORABLE RAMON R. BUENAVENTURA in his capacity as Presiding Judge of RTC, National Capital Judicial Region, Branch 154, Pasig City, ATTY. GRACE BELVIS and ALBERTO VALINO, Ex-Officio Sheriff and Deputy Sheriff respectively of the RTC, Pasig City and CAROLINA INDUSTRIES, INC., respondents-appellees.
MELO, J.:
Petitioner, as judgment debtor, seeks to redeem two parcels of land sold on execution none years earlier upon the contention that the pendency of an action involving the ownership thereof suspended the 12-month period of redemption 1 provided by the present Rules.
On December 7, 1992, petitioner tendered the amount of P2,341,166.48 to Deputy Sheriff Alberto Valino. When the deputy sheriff refused to execute a deed of redemption, petitioner went to the Regional Trial Court of the National Capital Judicial Region at Pasig City and the case was raffled to Branch 154 thereof presided over by herein respondent Judge Ramon P. Buenaventura who thereafter ruled against petitioner on the ground that the right of redemption had long expired.
Dissatisfied with this ruling which sustained the deputy sheriff's action, petitioner filed a petition for certiorari and mandamus, with a prayer for a writ of preliminary injunction with respondent Court of Appeals. On May 29, 1995, the appellate court dismissed the petition (Martinez, Yanares-Santiago (P), and Reyes, R., JJ.).
Hence, the instant petition for review on certiorari.
The facts of the case were summarized by respondent Court of Appeals, adopting pertinent facts as found and summarized by the same court in A.C. G.R. No. CV-03269 entitled "Rosario Sandejas vs. Carolina Industries, Inc., et al." (April 3, 1986), involving the very same parcels of land, as follows:
The facts of this case are stated in the order of the lower court dated March 21, 1984, which we quote with approval, as follows:
As may be gleaned from the documents submitted by the herein parties in support of their respective postures, the following facts appear incontrovertible, viz:
01. Plaintiff (Rosario Sandejas) is the registered owner of two (2) parcels of land, which are covered by the more particularly described in TCT Nos. 117995 and 189984 of the Registry of Deeds of Rizal.
02. A FIRST mortgage was constituted on the subject properties on 28 April 1969 in favor of the BANK OF THE PHILIPPINE ISLANDS for the sum of P150,000.00 and annotated on the corresponding Transfer Certificate of Title as Entry No. 65222/T-117995 on 2 May 1969.
03. A SECOND mortgage was constituted on the subject properties on 09 July 1969 in favor of SISON, LUZ & JALBUENA (now CMS STOCK BROKERAGE, INC.), the sum of P200,000.00, and annotated on the corresponding Transfer Certificate of Title as Entry No. 75685/T-117995 on 30 July 1969.
04. By virtue of the extra-judicial foreclosure of the SECOND mortgage, the subject properties were sold at public auction on 10 May 1971 to SISON, LUZ & JALBUENA, INC. (now CMS STOCK BROKERAGE, INC.) for the sum of P255,948.49, and the Certificate of Sale issued by the Provincial Sheriff of Rizal was duly annotated on the corresponding Transfer Certificate of Title on 19 May 1971. (Vide Exhs. 1-B and 2-B, pp. 31 and 35 id., respectively).
05. On 15 November 1972, plaintiff addressed a letter to her brother "Carling" (Atty. Carlos Moran Sison) requesting for a period of three (3) years within which to redeem the subject properties. (Vide Annex A of Plaintiff's Third-Party Claim, p. 39, id.).
06. On 24 November 1972, Atty. Carlos Moran Sison informed the plaintiff that she has five (5) years to redeem the subject properties. (Vide Annex B of Plaintiff's Third-Party Claim, p. 40, id.).
07. In the meantime, the FIRST mortgage in favor of the Bank of the Philippine Islands was extra-judicially foreclosed and the subject properties were sold at public auction on 02 February 1973 to CMS STOCK BROKERAGE, INC. for the sum of P71,995.00. (Vide Annex G of Motion to Dismiss, p. 45 id., and Annexes A and 2 of Defendant's Manifestation and Motion dated 09 January 1984, pp. 219 and 200, id., respectively).
08. On 22 June 1974, Atty. Carlos Moran Sison issued a receipt which reads: "Received from Rosario S. Sandejas a diamond ring and a pair of earrings in redemption of her land located at Muntinlupa, s/t CARLOS MORAN SISON.
09. In the audited Statement of Financial Conditions as of 31 December 1978, 31 December 1979, 31 December 1980 and 30 June 1981 of CMS STOCK BROKERAGE, INC., the subject properties were listed as one of the "ASSETS" of said corporation, with an equity valuation of P327,943.49 and P71,995.00 paid by CMS STOCK BROKERAGE, INC. in the foreclosure sales of the SECOND and FIRST mortgages, respectively.
10. The subject properties were levied on execution by the defendant sheriff on 01 March 1982.
11. On 02 June 1982, plaintiff filed a Third-Party Claim with the defendant sheriff wherein it is alleged, among others:
5. That on June 22, 1974 I redeemed above-mentioned properties from CMS STOCK BROKERAGE by paying said Brokerage a diamond ring and a pair of earrings in redemption for above properties, . . . ;
6. That since then, I have neglected to request for the cancellation of the annotation in my title of the Certificate of Sale issued in favor of SISON, LUZ & JALBUENA by reason of the fact that I was very busy attending to other more pressing obligations after which I suffered a stroke as a consequence of which I no longer was able to attend to the cancellation of said annotation.
12. Plaintiff instituted this action for quieting ownership of real property injunction and damages on 22 April 1983.
13. On 1 December 1983, the defendant Sheriff proceeded with the scheduled
public auction sale of the subject properties after the Supreme Court, by its Resolution adopted on 26 November 1983 in G.R. No. 64510, entitled "Dr. Romeo Gustilo, et al., versus The Intermediate Appellate Court, et al." LIFTED the temporary restraining order issued on 21 November 1983 enjoining the Sheriff of Rizal from proceeding with the public auction sale of the garnished and levied properties of the petitioners therein, particularly the two parcels of land, as scheduled on 01 December 1983 at 10:00 A.M.
As culled from the records, at the public auction held on December 1, 1983, respondent Deputy Sheriff sold the parcels of land in question to herein private respondent (now, also private respondent in the instant petition) as the highest bidder and issued the corresponding certificate of sale to the latter.
Several days later on December 12, 1983, respondent Deputy Sheriff issued an Amended Certificate of Sale containing the following notations:
. . . subject to the result and effect of Civil Case No. 1508, entitled "Rosario S. Sandejas vs. Carolina Industries, Inc. et al.", Regional Trial Court of Makati, Metro Manila, Branch 137 it being a third-party complaint.
The period of redemption of the real property/properties described above will expire one (1) year from and after the date of registration of this Certificate of Sale.
and this was registered on December 16, 1983 in the Office of the Register of Deeds.
On December 18, 1984, the Sheriff's Final Deed of Sale was issued.
On April 16, 1986, title to the property was consolidated in the private respondent's name and a writ of possession was issued in its favor.
On April 16, 1986, title to the parcels of land was registered in private respondent's name.
In a decision dated October 16, 1991 in G.R. No. 101351, the Supreme Court declared petitioner as the real owner of the subject parcel of land and not Rosario S. Sandejas who initiated the proceedings for "quieting of ownership of real property, injunction and damages" which was docketed as Civil Case No. 1508.
On December 18, 1991, a final entry of the decision in G.R. No. 101351 was entered in the Supreme Court's Book of Judgments.
On December 7, 1992, petitioner made an offer to redeem the parcels of land in question.
Subsequently, on December 15, 1992, it filed a notice to redeem and tendered the redemption money amounting to P2,341,166.48 with the Office of the Clerk of Court. Petitioner also paid an additional sum of P11,905.83 as Sheriff's Commission or deposit fee.
In a letter dated December 16, 1992 respondents Sheriffs informed petitioner that they can not execute and issue the certificate of redemption as requested in the absence a court order directing them to do so, Respondents Sheriffs further informed the latter that they accepted the tendered amounts for safekeeping.
On January 13, 1993, petitioner filed a "Motion to require Sheriff to Execute Certificate of Redemption".
On January 20, 1994, respondent Judge issued the challenged order denying petitioner's motion requiring the Sheriff to execute a certificate of redemption.
A motion for reconsideration dated February 16, 1994 was denied by respondent Judge in an order dated July 12, 1994.
(pp. 48-52, Rollo.)
The petition is anchored on the following assignment of errors:
(1) RESPONDENT COURT OF APPEALS IS GUILTY OF GRAVE ABUSE OF DISCRETION AND COMMITTED SERIOUS AND REVERSIBLE ERRORS IN NOT UPHOLDING THE UNQUESTIONABLE RIGHT OF PETITIONER TO REDEEM THE SUBJECT PROPERTY CONSIDERING THAT THE PENDENCY OF THE ACTION INVOLVING THE QUESTION OF OWNERSHIP NECESSARILY INTERRUPTS OR SUSPENDS THE PERIOD OF REDEMPTION.
(2) RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION IN BASING ITS FINDING THAT PETITIONER IS ALREADY THE OWNER OF THE SUBJECT PROPERTIES AT THE TIME THEY WERE LEVIED UPON ON ITS OWN PREVIOUS DECISION IN ANOTHER CASE INVOLVING THE SAME PARTIES (C.A. G.R. CV NO. 03209) DATED APRIL 3, 1986, WHICH DECISION WAS SUBSEQUENTLY RECONSIDERED AND THEREFORE NO LONGER EXIST IN LEGAL CONTEMPLATION.
(3) RESPONDENT COURT OF APPEALS GRAVELY AND SERIOUSLY ERRED IN RULING THAT THE PENDENCY OF CIVIL CASE NO. 1508 FILED BY ROSARIO SANDEJAS DID NOT INTERRUPT OR TOLL THE REDEMPTION PERIOD OF PETITIONER ON THE GRAVELY ERRONEOUS ASSUMPTION THAT THERE IS NEITHER A STATUTE OR DECISION WHICH SUPPORTS THE PREPOSITION THAT THE PERIOD OF ONE (1) YEAR TO REDEEM THE PROPERTY IS SUSPENDED BY INSTITUTION OF ACTION TO ANNUL FORECLOSURE SALE (CITING THE CASE OF PEOPLE'S FINANCING CORPORATION VS. COURT OF APPEALS, 192 SCRA 34, CITING SUMERARIZ VS. DBP, 21 SCRA 1374).
(4) THE RESPONDENT COURT OF APPEALS COMMITTED GRAVE ABUSE OF DISCRETION AND SERIOUSLY ERRED IN UPHOLDING THE POSITION OF THE TRIAL COURT THAT THE RESERVATION IN THE AMENDED CERTIFICATE OF SALE TO THE EFFECT THAT IT IS SUBJECT TO THE OUTCOME OF THE CASE FILED BY ROSARIO SANDEJAS AND ITS CORRESPONDING ANNOTATION ON THE CERTIFICATE OF TITLES OF DISPUTED PROPERTIES WERE SOLELY FOR THE BENEFIT OF ROSARIO SANDEJAS AND NOT PETITIONER CMS STOCK BROKERAGE, INC. (CITING SECTIONS 28 & 36 OF RULE 39 OF THE RULES OF COURT).
(5) THE RESPONDENT COURT OF APPEALS GRAVELY ABUSE (sic) ITS DISCRETION IN MAKING SWEEPING STATEMENTS AND MISQUOTING OR CHANGING THE CONTEXT OF THIS HONORABLE COURTS PRONOUNCEMENTS IN QUIMSON VS. PNB, 36 SCRA 26 AND PIANO VS. CAYANONG, 7 SCRA 397, TO JUSTIFY ITS RULING THAT PETITIONER'S RIGHT OF REDEMPTION HAS LONG EXPIRED.
(6) THE RESPONDENT COURT OF APPEALS HAS GRAVELY ERRED IN RULING THAT PETITIONER IS ESTOPPED BY LACHES FROM EXERCISING ITS RIGHT OF REDEMPTION.
(pp. 22-24, Rollo.)
Upon deliberate consideration of the arguments in support of petitioner's assigned errors, the relevant issues may be synthesized thusly:
(1) Whether or not petitioner could have effected the redemption of the subject property within the 12-month period provided under the Rules; and
(2) Whether or not the 12-month period of redemption was interrupted by Civil Case No. 1508 entitled, "Rosario Sandejas vs. Carolina Industries, Inc. et al.
We resolve the first issue in the affirmative.
It is petitioner's contention that it could not have exercised the right of redemption before the lapse of the 12-month redemption period on or before December 17, 1984 because its title at the time was clouded by the claim of a third party, Rosario Sandejas. Petitioner contends that it was only December 18, 1991 when the Supreme Court sustained the position of Carolina Industries, Inc. as against the claim of Rosario Sandejas that petitioner's period of redemption commenced.
It may be recalled that the action filed by Rosario Sandejas is based on the claim that her brother, Carlos Moran Sison, had given her in 1972 a period of five years within which to redeem the foreclosed parcels of land. On June 22, 1974, well within the five-year period, she allegedly redeemed the properties by giving her brother a diamond ring and a pair of earrings as payment for the redemption price. Therefore, when the parcels were levied upon by Carolina Industries, Sandejas filed a third-party claim with the Sheriff, stating that she had already redeemed the property from CMS Stock Brokerage, Inc. When the sheriff rejected her third-party claim, she went to court on an action for quieting of title. She eventually lost the case before this Court.
Petitioner now submits that on December 1, 1983 when the two parcels of land were sold at public auction to Carolina Industries and on December 18, 1984 when the final deed of sale was issued in the latter's name, CMS Stock Brokerage, Inc. had no clear title because ownership and title to the subject parcels of land were being claimed and asserted by Rosario Sandejas. Petitioner, it is contended, was then, not yet the true, absolute, declared, and registered owner of the disputed properties. According to petitioner, the undisputed true and registered owner was then Rosario Sandejas. Petitioner complains that it would be damned if it then redeemed the property because of the ensuing manifest falsehood about the ownership of the property, and equally damned if it did not because of the expiration of 12-month redemption period should the same be counted from December 17, 1984. Necessarily, so petitioner contends, its 12-month period started only on December 18, 1991, after this Court ruled that petitioner is the owner, dismissing the case for quieting of title filed by Rosario Sandejas.
The Court of Appeals rejected this contention principally because under the established factual circumstances, petitioner considered itself to be the owner of the subject property despite the alleged pending case for quieting of title.
Although the legal basis relied upon by respondent Court of Appeals is not entirely precise because it premised the right of redemption of petitioner upon ownership, this Court finds the result arrived at by respondent court to be correct. For the guidance of bench and of the bar, we deem it necessary to point out that petitioner's reliance on the supposed cloud or uncertainty in its ownership or title for not effecting redemption within the 12-month redemption period is misplaced.
The right of redemption upon an execution sale, such as the one involving the subject parcels of land held on December 1, 1983, is provided for under Section 29, Rule 39 of the Rules of Court, which reads:
Sec. 29. Who may redeem real property sold — Real property sold as provided in the last preceding section, or any part thereof sold separately, may be redeemed in the manner hereinafter provided, by the following persons:
(a) The judgment debtor, or his successor in interest in the whole or any part of the property;
(b) A creditor having a lien by attachment, judgment or mortgage on the property sold, or on some part thereof, subsequent to the judgment under which the property was sold. Such redeeming creditor is termed a redemptioner.
(Emphasis supplied.)
It must be noted that the subject pieces of property were sold on execution by virtue of and pursuant to a writ of execution issued against petitioner and in favor of the private respondent in Civil Case No. 12850 entitled, Carolina Industries, Inc. vs. CMS Stock Brokerage, Inc. et al., where this Court, upon review, in G.R. No. 46908, had occasion to rule:
WHEREFORE, the decision appealed from is REVERSED, and private respondent CMS Stock Brokerage, Inc. is ordered to pay Carolina Industries, Inc. in the amount of P634,796.00, representing its liquidated margin deposit, with interest at 12% per annum, from the time of the filing of the complaint until fully paid, and P20,000.00 as attorney's fees. Private respondents are directed to secure the release from the Bank of the Philippine Islands the amount of P500,000.00, together with all its earnings, in favor of the petitioner. Costs against private respondents.
The judgment debtor, therefore, is none other than CMS Stock Brokerage, Inc. itself, and as such, is the party entitled to redeem.
Plainly, under the aforequoted Paragraph (a) of Section 29, Rule 39, the real property sold on execution may be redeemed by the judgment debtor or his successors in interest, in the whole or any part of the property. The exercise of this right of redemption by the judgment debtor is not conditioned upon ownership of the property sold on execution but by virtue of a writ of execution directed against such judgment debtor. In instances when a piece of property is claimed by a third person, as in the case at hand. Section 17 of the same Rule 39 provides what is to be done. When, however, property is levied upon and sold, despite a claim by a third person who must vindicate then his claim in a proper action, Section 29 determines who shall have a right of redemption. Clearly, the right of redemption is given to the judgment debtor and not to any third-party claimant.
Petitioner CMS Stock Brokerage, Inc. as the judgment debtor had the right to redeem to property under Section 29, Rule 39 of the Rules of Court, and not Rosario Sandejas, who was only a third-party claimant. If at all, Rosario Sandejas, as a third-party claimant may only recover the property, if wrongfully sold on execution, by a proper action annulling the execution sale and reconveying the property to her. In no instance would she, as third-party claimant, be allowed to exercise any right of redemption unless she is likewise a successor in interest of the judgment debtor or a redemption under Section 29 of Rule 39 of the Rules of Court. Indeed, why should the third-party claimant and owner, if he truly is such, be required to pay the redemption price (which in almost all instances, is in the amount of the judgment debt) to the judgment creditor when the obligation principally pertains to the judgment debtor? Why should the law prejudice the third-party claimant? This only shows that the judgment debt or obligation and not ownership is the main consideration in granting the judgment debtor the right to redeem.
From the foregoing, it is clear that petitioner's supposition that unquestioned ownership of the subject property is a requisite for its exercise of the right of redemption in this case has no legal basis. Petitioner could have effected its right of redemption had it wanted to within the 12-month redemption period provided under the Rules. This is the law and ignorance thereof is no excuse for petitioner's failure to exercise such right.
The second issue is whether or not petitioner's period to redeem is tolled by an action to quiet title filed by a third-party claimant questioning the ownership of the property sold on execution.
We rule in the negative.
As already pointed out, the issue of ownership insofar as petitioner's right of redemption as judgment debtor is concerned, has no bearing whatsoever, so as have the effect of tolling or interrupting the running of the 12-month redemption period.ℒαwρhi৷ If at all, as pointed out by respondent Court of Appeals, the condition imposed after the execution sale relating to the pending action for quieting of title, may only benefit the third-party claimant, Rosario Sandejas, that is should her claim prosper, only then may the execution sale be declared null and void. But with respect to petitioner's right of redemption as judgment debtor this condition is of no moment.
The case of Consolidated Bank and Trust Corporation vs. Intermediate Appellate Court (150 SCRA 591 [1987]) finds no application to the case at bench. First of all, in said case, the party in whose favor the period of redemption was deemed tolled is the same party who initiated the action in court. In the present case, a third-party claimant, and not herein petitioner, was involved in the action for quieting of title. Secondly, the property involved in the Consolidated Bank case had been put in custodia legis by virtue of a writ of attachment duly annotated on the transfer certificate of title. Clearly, there is no such writ herein. Most importantly, in the Consolidated Bank case, the Court found therein petitioner as the victim of fraud, justifying the Court's ruling in its favor. In the case at bar, no such fraud was even alleged to have been committed against petitioner.
Petitioner also relies upon the amendatory condition made in the certificate of sale by the deputy sheriff which respondent Court of Appeals ruled to be for the benefit of Sandejas alone and not for petitioner. Petitioner invokes Section 28, Rule 39 of the Rules of Court which provides:
Sec. 28. Certificate of Sale where property claimed by third person. — When a property sold by virtue of a writ of execution has been claimed by a third person, the certificate of sale to be issued by the sheriff pursuant to sections 25, 26 and 27 of this rule, shall make express mention of the existence of such third-party claim.
Although it may be true that the Certificate of Sale expressly mentioned the existence of the claim of Rosario Sandejas, the third-party claimant, such annotation would only have legal effect upon the execution sale if and only if such third-party claim prospered. To all intents and purposes this third-party claim was a resolutory condition, upon the happening of which, the judgment creditor's right over the property subject of execution may be voided.
It may be significant to note that this resolutory condition imposed upon the sale was in fact never fulfilled. This Court in G.R. No. 101351 ruled in favor of private respondent and against third-party claimant Rosario Sandejas insofar as said third-party claim is concerned. The legal effect contemplated by the condition imposed upon the execution sale never materialized because the condition was never fulfilled. In legal contemplation, an unfulfilled condition becomes functus oficio. The more it cannot possibly extend the redemption period of herein petitioner, a party not privy to such condition, whose rights and interests are totally separate and distinct from that of the third-party claimant.
Upon the foregoing considerations, the Court finds it irrelevant to discuss the other assigned errors. Moreover, the Court finds petitioner's invocation of our liberal rulings on the exercise of the right of redemption to have neither factual nor legal basis. The Court has no alternative but to apply Sections 29 and 30, of Rule 39 of the Rules of Court to the letter.
WHEREFORE, the petition is hereby DISMISSED, without special pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Francisco and Panganiban, JJ., concur.
Footnotes
1 The period of redemption under Section 28, Rule 39 of the 1997 Rules of Court, effective July 1, 1997, shall be one year from the date of the registration of the certificate of sale, instead of twelve months.
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