Republic Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-!!"
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(N RE) PET(T(ON *OR CONSOL(+AT(ON O* T(TLE (N T,E EN+EES O* A ,OUSE AN+ T,E R(G,TS TO A LOT. MAR(A BAUT(STA +A. +E REES% ET AL.% /en0eespetitione1s-appellees. RO+OL*O LANU2A% /en0o1% /s. MART(N +E LEON% inte1/eno1-appellant. E1as3o R. C1u4 an0 C. R. Pascual fo1 inte1/eno1appellant. Au5usto #. Salas fo1 /en0ees-petitione1s-appellees. REGALA% #.) Ro0olfo Ro0olfo Lanu4a an0 his 6ife Belen 6e1e the o6ne1s of a t6o-sto17 house built on a lot of the Ma1ia Gui4on Sub0i/ision in Ton0o% Manila% 6hich the spouses lease0 f1o3 the Consoli0ate0 Asiatic Co. On #anua17 "% "&$"% Lanu4a e8ecute0 a 0ocu3ent entitle0 9+ee0 of Sale 6ith Ri5ht to Repu1chase9 6he1eb7 he con/e7e0 to Ma1ia Bautista 0a. 0e Re7es an0 Au1elia R. Na/a11o the house% to5ethe1 6ith the leasehol0 1i5hts to the lot% a tele/ision set an0 a 1ef1i5e1ato1 in consi0e1ation of the su3 of P!%:::. The 0ee0 1ea0s) +EE+ O* SALE ;(T, R(G,T TO REPURC,ASE
Ma1ia Gui4on% Ga5alan5in% Ton0o% Manila% he1eb7 0ecla1e 0ecla1e that ( a3 the t1ue an0 absolute o6ne1 of a ne6 t6o sto1e7 house of st1on5 3ate1ials% const1ucte0 on a 1ente0 lot ? Lot No. " of the Ma1ia Gui4on Sub0i/ision% o6ne0 b7 the Consoli0ate0 Asiatic Co. ? as e/i0ence0 b7 the attache0 Receipt Receipt No. &% an0 the plan of the sub0i/ision% o6ne0 b7 sai0 co3pan7. That fo1 an0 in consi0e1ation consi0e1ation of the su3 of T,REE T,REE T,OUSAN+ PESOS @P!%:::.:: @P!%:::.:: 6hich ( ha/e 1ecei/e0 1ecei/e0 this 0a7 f1o3 M1s. Ma1ia Bautista 0a. 0e Re7es% *ilipino% of le5al a5e% 6i0o6 an0 Au1elia Re7es% 3a11ie0 to #ose S. Na/a11o% *ilipinos% of le5al a5es% an0 1esi0in5 at """ Antipolo St.% Ton0o% Manila% ( he1eb7 SELL% CE+E% TRANS*ER% AN+ CONE unto sai0 Ma1ia Bautista 0a. 0e Re7es% he1 hei1s% succeso1s% a03inist1ato1s an0 assi5ns sai0 house% inclu0in5 37 1i5ht to the lot on 6hich it 6as const1ucte0% an0 also 37 tele/ision% an0 f1i5i0ai1e f1i5i0ai1e 9
;hen the o1i5inal pe1io0 of 1e0e3ption e8pi1e0% the pa1ties e8ten0e0 it to #ul7 "% "&$" b7 an annotation to this eIect on the left 3a15in of the inst1u3ent. Lanu4aJs 6ife% 6ho 0i0 not si5n the 0ee0% this ti3e si5ne0 he1 na3e belo6 the annotation. (t appea1s that afte1 the e8ecution of this inst1u3ent% Lanu4a an0 his 6ife 3o1t5a5e0 the sa3e house in fa/o1 of Ma1tin 0e Leon to secu1e the pa73ent of P%': 6ithin one 7ea1. This 3o1t5a5e 6as e8ecute0 on Octobe1 >% "&$" an0 1eco10e0 in the OKce of the Re5iste1 of +ee0s of Manila on No/e3be1 =% "&$" un0e1 the p1o/isions of Act No. !!>>. As the Lanu4as faile0 to pa7 thei1 obli5ation% +e Leon le0 in the she1iIJs oKce on Octobe1 % "&$ a petition fo1 the e8t1a-u0icial fo1eclosu1e fo1eclosu1e of the 3o1t5a5e. On the othe1 han0% Re7es Re7es an0 Na/a11o follo6e0 suit b7 lin5 in the Cou1t of *i1st (nstance of Manila a petition fo1 the consoli0ation of o6ne1ship of the house on the 51oun0 that the pe1io0 of 1e0e3ption e8pi1e0 on #ul7 "% "&$" 6ithout the /en0ees e8e1cisin5 e8e1cisin5 thei1 1i5ht of 1epu1chase. 1epu1chase. The petition fo1 consoli0ation of o6ne1ship 6as le0 on Octobe1 "&. On Octobe1 !% the house 6as sol0 to +e Leon as the onl7 bi00e1 at the she1iIs sale. +e Leon i33e0iatel7 too possession of the house% secu1e0 a 0ischa15e of the 3o1t5a5e on the house in fa/o1 of a 1u1al ban b7 pa7in5 P%::: an0% on Octobe1 &% inte1/ene0 in cou1t an0 ase0 fo1 the 0is3issal of the petition le0 b7 Re7es an0 Na/a11o on the 51oun0 that the un1eco10e0 pacto 0e 1et1o sale coul0 not aIect his 1i5hts as a thi10 pa1t7. The pa1ties" the1eafte1 the1eafte1 ente1e0 ente1e0 into a stipulation of facts on 6hich this opinion is 3ainl7 base0 an0 sub3itte0 the case fo1 0ecision. (n con13in5 the o6ne1ship of Re7es an0 Na/a11o in the house an0 the leasehol0 1i5ht to the lot% the cou1t sai0) (t is t1ue that the o1i5inal 0ee0 of sale 6ith pacto 0e 1et1o% 1et1o% 0ate0 #anua17 "% "&$"% 6as not si5ne0 b7 Belen Ge1oni3o-Lanu4a% 6ife of the /en0o1 a 1et1o% Ro0olfo Lanu4a% at the ti3e of its e8ecution. (t appea1s% ho6e/e1% that on the occasion of the e8tension of the pe1io0 fo1 1epu1chase to #ul7 "% "&$"% Belen Ge1oni3o-Lanu4a si5ne0 5i/in5 he1 app1o/al an0 confo13it7. This act% in eIect% constitutes 1atication o1 con13ation of the cont1act @Anne8 9A9 Stipulation b7 Belen Ge1oni3o-Lanu4a% 6hich 1atication /ali0ate0 the act of Ro0olfo Lanu4a f1o3 the 3o3ent of the e8ecution e8ecution of the sai0 cont1act. (n sho1t% such 1atication ha0 the eIect of pu15in5 the cont1act @Anne8 9A9 Stipulation of an7 0efect 6hich it 3i5ht ha/e ha0 f1o3 the 3o3ent of its e8ecution. @A1ticle "!&$% Ne6 Ci/il Co0e of the Philippines Tan5 Ah Chan an0 <6on5
1epu1chase 1epu1chase @Anne8 9A9 Stipulation 1elie0 upon b7 the petitione1s 3ust be consi0e1e0 as 3e1el7 an euitable 3o1t5a5e fo1 the 1eason that afte1 the e8pi1ation of the pe1io0 of 1epu1chase of th1ee 3onths f1o3 #anua17 "% "&$". A1ticle "$: of the Ne6 Ci/il Co0e p1o/i0es) 9ART. "$:. The cont1act shall be p1esu3e0 to be in euitable 3o1t5a5e% in an7 of the follo6in5 cases 888
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9@! ;hen upon o1 afte1 the e8pi1ation of the 1i5ht to 1epu1chase 1epu1chase anothe1 inst1u3ent e8ten0in5 the pe1io0 of 1e0e3ption o1 51antin5 a ne6 pe1io0 is e8ecute0. 888
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(n the p1esent case% it appea1s% ho6e/e1% that no othe1 inst1u3ent 6as e8ecute0 bet6een the pa1ties e8ten0in5 the pe1io0 of 1e0e3ption. ;hat 6as 0one 6as si3pl7 to annotate on the 0ee0 of sale 6ith 1i5ht to 1epu1chase @Anne8 9A9 Stipulation that 9the pe1io0 to 1epu1chase% e8ten0e0 as 1eueste0 until #ul7 "% "&$".9 Nee0less to sa7% the pu1chase1s a 1et1o% in the e8e1cise of thei1 f1ee0o3 to 3ae cont1acts% ha/e the po6e1 to e8ten0 the pe1io0 of 1epu1chase. Such e8tension is /ali0 an0 eIecti/e as it is not cont1a17 to an7 p1o/ision of la6. @U3ale /s. *e1nan0e4% = Phil. =&% &! The 0ee0 of sale 6ith 6ith 1i5ht to 1epu1chase 1epu1chase @Anne8 9A9 9A9 Stipulation is e3bo0ie0 in a public 0ocu3ent. Conseuentl7% the sa3e is suKcient fo1 the pu1pose of t1ansfe11in5 t1ansfe11in5 the 1i5hts of the /en0o1s a 1et1o o/e1 the p1ope1t7 in uestion in fa/o1 of the petitione1s. (t is to be note0 that the 0ee0 of sale 6ith 1i5ht to 1epu1chase 1epu1chase @Anne8 9A9 Stipulation 6as e8ecute0 on #anua17 "% "&$"% 6hich 6as /e17 3uch ahea0 in point of ti3e to the e8ecution of the 1eal estate 3o1t5a5e on Octobe1 >% "&$"% in fa/o1 of inte1/eno1 @Anne8 9B9 Stipulation. (t is ob/ious% the1efo1e% that 6hen the 3o1t5a5o1s% Ro0olfo Ro0olfo Lanu4a an0 Belen Ge1oni3o Lanu4a% e8ecute0 the 1eal estate 3o1t5a5e in fa/o1 of the inte1/eno1% the7 6e1e no lon5e1 the absolute o6ne1s of the p1ope1t7 since the sa3e ha0 al1ea07 been sol0 a 1et1o to the petitione1s. The spouses Lanu4a% the1efo1e% coul0 no lon5e1 constitute a /ali0 3o1t5a5e o/e1 the p1ope1t7 inas3uch as the7 0i0 not ha/e an7 f1ee 0isposition of the p1ope1t7 3o1t5a5e0. @A1ticle :=% Ne6 Ci/il Co0e. *o1 a /ali0 3o1t5a5e to e8ist% o6ne1ship of the p1ope1t7 3o1t5a5e0 is an essential 1euisite. A 3o1t5a5e e8ecute0 e8ecute0 b7 one 6ho is not the o6ne1 of the p1ope1t7 3o1t5a5e0 is 6ithout le5al e8istence an0 the 1e5ist1ation cannot /ali0ate. @Philippine National Ban /s. Rocha% Phil. >&'. The inte1/eno1 in/oes in/oes the p1o/isions p1o/isions of a1ticle a1ticle ">> of the Ne6 Ci/il Co0e fo1 the 1eason that 6hile the 1eal estate 3o1t5a5e in his fa/o1 @Anne8 9B9 Stipulation has been 1e5iste1e0 6ith the Re5iste1 of +ee0s of Manila un0e1 the p1o/isions of Act No. !!>> on No/e3be1 !% "&$"% the 0ee0 of sale 6ith 1i5ht to 1epu1chase 1epu1chase @Anne8 9A9 Stipulation ho6e/e1% has not been 0ul7 1e5iste1e0. A1ticle ">> of the Ne6 Ci/il Co0e% ho6e/e1% 1efe1s to the sale of the sa3e p1ope1t7 to t6o o1 3o1e /en0ees. This p1o/ision of la6% the1efo1e% the1efo1e% is not applicable to the p1esent case 6hich 0oes not in/ol/e sale of the sa3e p1ope1t7 to t6o o1 3o1e /en0ees. *u1the13o1e% the 3e1e 1e5ist1ation of the p1ope1t7 3o1t5a5e0 in fa/o1 of the inte1/eno1 un0e1 Act No. !!>> 0oes not p1eu0ice the inte1ests of the petitione1s 6ho ha/e a bette1 1i5ht o/e1 the p1ope1t7 in uestion un0e1 the ol0 p1inciple of 1st in ti3e% bette1 in 1i5ht. @Galla10o /s. Galla10o% C.B.% >$ O.G. $= +e Leon appeale0 0i1ectl7 to this Cou1t% conten0in5 @" that the sale in uestion is not onl7 /oi0able but /oi0 ab initio fo1 ha/in5 been 3a0e b7 Lanu4a 6ithout the consent of his 6ife @ that the pacto 0e 1et1o sale is in
1ealit7 an euitable 3o1t5a5e an0 the1efo1e the1efo1e can not be the basis of a petition fo1 consoli0ation of o6ne1ship an0 @! that at an7 1ate the sale% bein5 un1eco10e0% cannot aIect thi10 pa1ties. ;e a1e in acco10 6ith the t1ial cou1tJs 1ulin5 that a con/e7ance of 1eal p1ope1t7 of the conu5al pa1tne1ship 3a0e b7 the husban0 6ithout the consent of his 6ife is 3e1el7 /oi0able. This is clea1 f1o3 a1ticle "'! of the Ci/il Co0e 6hich 5i/es the 6ife ten 7ea1s 6ithin 6hich to b1in5 an action fo1 annul3ent. As such it can be 1atie0 as Lanu4aJs 6ife in eIect 0i0 in this case 6hen she 5a/e he1 confo13it7 to the e8tension of the pe1io0 of 1e0e3ption b7 si5nin5 the annotation on the 3a15in of the 0ee0. ;e 3a7 a00 that actions fo1 the annul3ent of /oi0able cont1acts can be b1ou5ht onl7 b7 those 6ho a1e boun0 un0e1 it% eithe1 p1incipall7 o1 subsi0ia1il7 @a1t. "!&'% so that if the1e 6as an7one 6ho coul0 ha/e uestione0 the sale on this 51oun0 it 6as Lanu4aJs 6ife alone. ;e also a51ee 6ith the lo6e1 cou1t that bet6een an un1eco10e0 un1eco10e0 sale of a p1io1 0ate an0 a 1eco10e0 3o1t5a5e of a late1 0ate the fo13e1 is p1efe11e0 p1efe11e0 to the latte1 fo1 the 1eason that if the o1i5inal o6ne1 ha0 pa1te0 6ith his o6ne1ship of the thin5 sol0 then he no lon5e1 ha0 the o6ne1ship an0 f1ee 0isposal of that thin5 so as to be able to 3o1t5a5e it a5ain. Re5ist1ation of the 3o1t5a5e un0e1 Act No. !!>> 6oul0% in such case% be of no 3o3ent since it is un0e1stoo0 to be 6ithout p1eu0ice to the bette1 1i5ht of thi10 pa1ties. No1 6oul0 it a/ail the 3o1t5a5ee an7 to asse1t that he is in actual possession of the p1ope1t7 fo1 the e8ecution of the con/e7ance in a public inst1u3ent ea1lie1 6as eui/alent to the 0eli/e17 of the thin5 sol0 to the /en0ee.! But the1e is one aspect of this case 6hich lea0s us to a 0iIe1ent conclusion. (t is a point 6hich neithe1 the pa1ties no1 the t1ial cou1t appea1 to ha/e suKcientl7 consi0e1e0. ;e ;e 1efe1 to the natu1e of the so-calle0 9+ee0 of Sale 6ith Ri5ht to Repu1chase9 an0 the clai3 that it is in 1ealit7 an euitable 3o1t5a5e. ;hile +e Leon 1aise0 the uestion belo6 an0 a5ain in this Cou1t in his secon0 assi5n3ent of e11o1% he has not 0e3onst1ate0 his point neithe1 has he pu1sue0 the lo5ical i3plication of his a15u3ent be7on0 statin5 that a petition fo1 consoli0ation of o6ne1ship is an inapp1op1iate 1e3e07 to enfo1ce a 3o1t5a5e. +e Leon base0 his clai3 that the pacto 0e 1et1o sale is actuall7 an euitable 3o1t5a5e on the fact that% 1st% the suppose0 /en0o1s @the Lanu4as 1e3aine0 in possession of the thin5 sol0 an0% secon0% 6hen the th1ee-3onth pe1io0 of 1e0e3ption e8pi1e0 the pa1ties e8ten0e0 it. These a1e ci1cu3stances 6hich in0ee0 in0icate an euitable 3o1t5a5e.> But thei1 1ele/ance e3e15es onl7 6hen the7 a1e seen in the pe1specti/e of othe1 ci1cu3stances 6hich in0ubitabl7 sho6 that 6hat 6as inten0e0 6as a 3o1t5a5e an0 not a sale.These ci1cu3stances a1e) ". The 51oss ina0euac7 of the p1ice. (n the 0iscussion in the b1iefs of the pa1ties as 6ell as in the 0ecision of the t1ial cou1t% the fact has not been 3entione0 that fo1 the p1ice of P!%:::% the suppose0 /en0o1s 9sol09 not onl7 thei1 house% 6hich the7 0esc1ibe0 as ne6 an0 as bein5 3a0e of st1on5 3ate1ials an0 6hich alone ha0 an assesse0 /alue of P>%:::% but also thei1 leasehol0 1i5ht tele/ision set an0 1ef1i5e1ato1% 9
Re7es an0 Na/a11o. ;hat 6as a51ee0 6as that o6ne1ship of the thin5s suppose0l7 sol0 6oul0 /est in the /en0ees onl7 if the /en0o1s faile0 to pa7 P!%:::. (n fact the e3phasis is on the /en0o1s pa73ent of the a3ount 1athe1 than on the 1e0e3ption of the thin5s suppose0l7 sol0. Thus% the 0ee0 1ecites that ? (f ( @Lanu4a fail to pa7 sai0 a3ount of P!%:::.:: 6ithin the stipulate0 pe1io0 of th1ee 3onths% 37 1i5ht to 1epu1chase 1epu1chase the sai0 p1ope1ties shall be fo1feite0 an0 the o6ne1ship the1eto auto3aticall7 pass to M1s. Ma1ia Bautista 0a. 0e Re7es . . . 6ithout an7 Cou1t inte1/ention an0 the7 can tae possession of the sa3e. This stipulation stipulation is cont1a17 to the natu1e natu1e of a t1ue pacto 0e 1et1o sale un0e1 6hich a /en0ee acui1es o6ne1ship of the thin5 sol0 i33e0iatel7 upon e8ecution of the sale% subect onl7 to the /en0o1Js 1i5ht of 1e0e3ption. (n0ee0% 6hat the pa1ties establishe0 b7 this stipulation is an o0ious pactu3 co33isso1iu3 6hich enables the 3o1t5a5es to acui1e o6ne1ship of the 3o1t5a5e0 p1ope1ties 6ithout nee0 of fo1eclosu1e p1ocee0in5s. Nee0less to sa7% such a stipulation is a nullit7% bein5 cont1a17 to the p1o/isions of a1ticle :== of the Ci/il Co0e.$ (ts inse1tion in the cont1act of the pa1ties is an a/o6al of an intention to 3o1t5a5e 1athe1 than to sell.' !. The 0ela7 in the lin5 of the petition fo1 consoli0ation. Still anothe1 point ob/iousl7 o/e1looe0 o/e1looe0 in the consi0e1ation of this case is the fact that the pe1io0 of 1e0e3ption e8pi1e0 on #ul7 "% "&$" an0 7et this action 6as not b1ou5ht until Octobe1 "&% "&$ an0 onl7 afte1 +e Leon ha0 ase0 on Octobe1 % "&$ fo1 the e8t1a-u0icial fo1 closu1e of his 3o1t5a5e. All the 6hile% the Lanu4as 1e3aine0 in possession of the p1ope1ties the7 6e1e suppose0 to ha/e sol0 an0 the7 1e3aine0 in possession e/en lon5 afte1 the7 ha0 lost thei1 1i5ht of 1e0e3ption. Un0e1 these ci1cu3stances 6e cannot but conclu0e that the 0ee0 in uestion is in 1ealit7 a 3o1t5a5e. This conclusion is of fa1-1eachin5 fa1-1eachin5 conseuence because it 3eans not onl7 that this action fo1 consoli0ation of o6ne1ship is i3p1ope1% as +e Leon clai3s% but% 6hat is 3o1e that bet6een the un1eco10e0 0ee0 of Re7es an0 Na/a11o Na/a11o 6hich 6e hol0 to be an euitable 3o1t5a5e% an0 the 1e5iste1e0 3o1t5a5e of +e Leon% the latte1 3ust be p1efe11e0. P1efe1ence of 3o1t5a5e c1e0its is 0ete13ine0 b7 the p1io1it7 of 1e5ist1ation 1e5ist1ation of the 3o1t5a5es%= follo6in5 the 3a8i3 9P1io1 te3po1e potio1 u1e9 @,e 6ho is is 1st in ti3e is p1efe11 p1efe11e0 e0 in 1i5ht.& Un0e1 a1ticle " of the Ci/il Co0e% the euitable 3o1t5a5e% 6hile /ali0 bet6een Re7es an0 Na/a11o% on the one han0% an0 the Lanu4as% on the othe1% as the i33e0iate pa1ties the1eto% cannot p1e/ail o/e1 the 1e5iste1e0 1e5iste1e0 3o1t5a5e of +e Leon. ;he1efo1e% ;he1efo1e% the 0ecision appeale0 f1o3 is 1e/e1se0% 1e/e1se0% hence% the petition fo1 consoli0ation is 0is3isse0. Costs a5ainst Re7es an0 Na/a11o. Concepcion% C.#.% +i4on% Ben54on% #.P.% #.P.% Sanche4 an0 Cast1o% ##.% concu1. Re7es% Re7es% #.B.L.% an0 2al0i/a1% ##.% 1ese1/e0 thei1 /otes. Maalintal% Maalintal% #.% concu1s in the 1esult.
Republic Republic of the Philippines SUPREME COURT Manila *(RST +((S(ON G.R. No. L-'!&
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CARLO LE2AMA BUN+AL(AN an0 #OSE R. BUN+AL(AN% petitione1s% /s. T,E ,ON. COURT COURT O* APPEALS% #UAN(TO #UAN(TO L(TTA; L(TTA;A A an0 E+NA CAMCAM% 1espon0ents. *1ancisco A. La/a% #1. fo1 petitione1s. Bena3in B. Be1na10ino fo1 p1i/ate 1espon0ents.
GUT(ERRE2% #R.% #.) This is a petition fo1 fo1 1e/ie6 of the 0ecision of the Cou1t of Appeals% no6 (nte13e0iate Appellate Cou1t% aK13in5 a u053ent of the then Cou1t of *i1st *i1st (nstance of Ri4al 0is3issin5 the petition fo1 0ecla1ato17 1elief an0Ho1 1efo13ation 1efo13ation of inst1u3ent le0 b7 the petitione1s a5ainst the 1espon0ents an0 o10e1in5 the petitione1s to pa7 ointl7 an0 se/e1all7 the a3ounts of P::%:::.:: fo1 1espon0ent E0na Ca3ca3 an0 P:%:::.:: fo1 1espon0ent Litta6a% as 3o1al 0a3a5es the a3ount of P:%:::.:: fo1 both 1espon0ents as e8e3pla17 0a3a5es the a3ount of P!:%:::.:: fo1 an0 as atto1ne7Js fees% an0 to pa7 the costs of the suit. On #ul7 "% "&'% the petitione1s pu1chase0 f1o3 the Estate of the +ecease0 A5apita Sa1ao 0a. 0e i1ata th1ee @! conti5uous pa1cels of lan0 locate0 at San #uan% Ri4al% containin5 containin5 an a551e5ate a1ea a1ea of !%!= sua1e 3ete1s% 3o1e o1 less% fo1 an0 in consi0e1ation of the a3ount of P>&&%::.::. The follo6in5 0a7% 0a7% #ul7 % "&'% "&'% the petitione1s% in a cont1act 0eno3inate0 as +ee0 of Sale 6ith Ri5ht to Repu1chase% Repu1chase% sol0 to the p1i/ate 1espon0ents the sa3e th1ee conti5uous pa1cels of lan0 fo1 the sa3e a3ount of P>&&%::.:: un0e1 specie0 te13s an0 con0itions. One of the te13s an0 con0itions 6as that the 1epu1chase 1epu1chase p1ice 6oul0 escalate 3onth afte1 3onth% 0epen0in5 on 6hen 1epu1chase 6oul0 be eIecte0. The p1ice 6oul0 be P!%>=:.$$ co3pute0 at P"$:.:: pe1 sua1e 3ete1 afte1 the 1st 3onth P$%'$:.:: co3pute0 at P"':.:: pe1 sua1e 3ete1 afte1 the secon0 3onth P&&%:>:.:: co3pute0 at P"=:.:: pe1 sua1e 3ete1 afte1 the thi10 3onth an0 P$!%!:.:: co3pute0 at P"&:.:: pe1 sua1e 3ete1 afte1 the fou1th 3onth% f1o3 an0 afte1 the 0ate of the inst1u3ent. (t 6as also stipulate0 in the sa3e cont1act that the /en0o1 shall ha/e the 1i5ht to possess% use% an0 buil0 on% the p1ope1t7 0u1in5 the pe1io0 pen0in5 1e0e3ption. On Au5ust $% "&'$% the petitione1s le0 a petition fo1 0ecla1ato17 1elief an0Ho1 1efo13ation of inst1u3ent befo1e the Cou1t of *i1st (nstance of Ri4al at Pasi5% Met1o Manila to 0ecla1e the +ee0 of Sale 6ith Ri5ht to Repu1chase Repu1chase an euitable 3o1t5a5e an0 the enti1e po1tion of the sa3e 0ee0 1efe11in5 to the accele1atin5 1epu1chase 1epu1chase p1ice null an0 /oi0 fo1 bein5 usu1ious% an0 to 1e0uce the loan obli5ation to P>'>%::.::% conten0in5 that the a3ount actuall7 loane0 6as onl7 P>'>%::.:: P>'>%::.:: an0 the petitione1s put up P%:::.:: of the 6ifeJs 3one7 6hen the pu1chase f1o3 the estate of M1s. i1ata 6as consu33ate0. On Au5ust '% "&'$% the p1i/ate 1espon0ents% in tu1n% le0 a petition fo1 the consoli0ation of o6ne1ship on the 51oun0 that 93o1e than a 7ea1 has elapse0 since the e8ecution of the +ee0 of Sale 6ith Ri5ht to Repu1chase Repu1chase b7 the /en0o1 on #ul7 % "&'.9 The p1i/ate 1espon0ents conten0e0 that 9not6ithstan0in5 6hich the /en0o1 has faile0 to a/ail of its 1i5hts un0e1 the p1o/isions of A1ticle "$:' in 1elation to A1ticle "$"$ of
the Ne6 Ci/il Co0e% the /en0o1 has lost all his 1i5hts to a/ail hi3self of the 1i5ht to consoli0ate o6ne1ship of the p1ope1t7 subect of the +ee0 of Sale.9 To this petition fo1 consoli0ation of o6ne1ship% the petitione1s le0 thei1 opposition upon the follo6in5 51oun0s) @a the1e is a pen0in5 suit bet6een the sa3e pa1ties in/ol/in5 the sa3e cause an0 subect 3atte1 @b consoli0ation 6ill be i3p1ope1 consi0e1in5 that the basic 0ocu3ent upon 6hich it is bein5 sou5ht is in fact an0 in la6 onl7 an euitable 3o1t5a5e an0 @c consoli0ation cannot be eIecte0 th1u the instant petition. Acco10in5l7% the Cou1t of *i1st (nstance of Ri4al o10e1e0 the t1ansfe1 of the petition fo1 consoli0ation of o6ne1ship to B1anch ( of the sa3e Cou1t 6he1e the petition fo1 0ecla1ato17 1elief an0Ho1 1efo13ation of inst1u3ent 6as pen0in5 in o10e1 that the t6o cases 3a7 be consi0e1e0 to5ethe1. A supple3ental petition 6as subseuentl7 le0 b7 the petitione1s alle5in5 that the p1i/ate 1espon0entsJ petition fo1 consoli0ation of o6ne1ship 6as 3a0e in o10e1 to f1ust1ate an0 1en0e1 nu5ato17 6hate/e1 o10e1s o1 u053ent 3a7 be issue0 b7 the t1ial cou1t in the petition fo1 0ecla1ation 1eliefHo1 1efo13ation 1efo13ation of inst1u3ent. Afte1 the t1ial an0 p1esentation of the pa1tiesJ 1especti/e 3e3o1an0a the t1ial cou1t 1en0e1e0 the 0ecision in fa/o1 of the p1i/ate 1espon0ents. The petitione1s appeale0 appeale0 to the Cou1t of Appeals. The appellate cou1t aK13e0 in toto the 0ecision of the t1ial cou1t. T6o 3otions fo1 1econsi0e1ation ha/in5 been 0enie0% the petitione1s le0 the p1esent petition base0 on the follo6in5 51oun0s) A. RESPON+ENT COURT O* APPEALS ERRE+ GRAEL% TO T,E ETENT O* GRAE GRAE ABUSE O* +(SCRET(ON% +(SCRET(ON% AN+ (N (N (OLAT(ON O* PET(T(ONERSJ R(G,T TO +UE PROCESS O* LA; AT APPELLATE LEEL% ;,EN (T A**(RME+ T,E APPEALE+ +EC(S(ON ;(T,OUT AN +(SCUSS(ON O* T,E QUEST(ONS RA(SE+ RA(SE+ (N T,E APPEAL AN+ B B S(MPL S(MPL A+OPT(NG T,E POS(T(ON O* T,E TR(AL ;,(C, (S PREC(SEL QUEST(ONE+ (N T,E APPEAL. B. RESPON+ENT COURT O* APPEAL ERRE+ GRAEL TO T,E ETENT O* GRAE GRAE ABUSE O* +(SCRET(ON +(SCRET(ON (N A+OPT(NG TOTALL TOTALL AN+ UNCR(T(CALL T,E GROSSL GROS SL ERRONEOUS REASON AN+ POS(T(ON O* T,E TR(AL COURT. C. RESPON+ENT COURT O* APPEALS ERRE+ GRAEL TO T,E ETENT O* GRAE GRAE ABUSE O* +(SCRET(ON% +(SCRET(ON% (N UNCERMON(OUSL% +EN(NG PET(T(ONERSJ *(RST MOT(ON *OR RECONS(+ERAT(ON% MOT(ON *OR ORAL ARGUMENT% MOT(ON TO (N(TE AM(CUS CUR(AE% AN+ SECON+ MOT(ON *OR RECONS(+ERAT(ON. E. RESPON+ENT COURT O* APPEALS ERRE+ GRAEL TO T,E ETENT O* GR GRE E ABUSE O* +(SCREA +(SCREAT(ON% T(ON% (N NOT REERS(NG T,E APPEALE+ #U+GMENT AN+ GRANT(NG T,E PRAERS PRAERS O* PET(T(ONERS-APPELLANTS% PET(T(ONERS-APPELLANTS% *OREMOST O* ;,(C, (S TO +ECLARE T,E +EE+ O* SALE ;(T, R(G,T TO REPURC,ASE REPURC,ASE TO BE AN EQU(TABLE MORTGAGE. Tell Tell issue is this case case is 6hethe1 o1 not not the 0ee0 of sale 6ith 1i5ht to 1epu1chase shoul0 be 0ecla1e0 as an euitable 3o1t5a5e. ;e n0 3e1ito1ious the petitione1sJ contention that un0e1 A1ticle "$: of the Ci/il Co0e the 0ee0 of sale 6ith 1i5ht to 1epu1chase shoul0 be p1esu3e0 to be an euitable 3o1t5a5e 0ue to the follo6in5 1easons.
@" @" The The cont cont1a 1act cts s in/o in/ol/ l/in in5 5 the the sub subec ectt p1op p1ope1 e1ti ties es ca3e one afte1 anothe1 in the space of t6o @ 0a7s. The +ee0 of Absolute Absolute Sale bet6een petitione1 #ose #ose R. Bun0alian as /en0ee an0 Ro3eo S. Gelu4% in his capacit7 as A03inist1ato1f of the Estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata% as /en0o1% 6as e8ecute0 e8ecute0 on #ul7 "% "&' @pp. "&-$% Anne8 9A9. The pu1po1te0 +ee0 of Sale 6ith Ri5ht to Repu1chase Repu1chase bet6een petitione1% #ose R. Bun0alian as /en0o1 an0 1espon0ents #uanito Litta6a an0 E0na Ca3ca3 as /en0ees 6as e8ecute0 on #ul7 % "&' @pp. $- !% Anne8 9A9.l6phlit This al1ea07 in0icates% in0icates% at a /e17 ea1l7 sta5e% that the t6o t1ansactions 3ust be inti3atel7 1elate0. @ Such Such inti nti3a 3atte 1el 1ela atio tion bet bet6e 6een en the the afo1e3entione0 afo1e3entione0 +ee0 of Absolute Sale an0 +ee0 of Sale 6ith Ri5ht to Repu1chase Repu1chase is al1ea07 clea1 in the state3ent in the latte1 inst1u3ent that the subect p1ope1t7 ha0 ust been pu1chase0 b7 #ose R. Bun0alian f1o3 the estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata% J6ith fun0s loane0 to hi3 b7 the he1ein EN+EESJ the latte1 bein5 no othe1 than 1espon0ents Litta6a an0 Ca3ca3 @p. =% Anne8 9A9. Patentl7% petitione1 #ose R. Bun0alian 6as fun0e0 b7 p1i/ate 1espon0ents to enable hi3 to pu1chase the p1ope1t7 f1o3 the sai0 estate. @! @! ,a/i ,a/in5 n5 ust ust pu1 pu1chas chase0 e0 the the p1 p1ope1 ope1t7 t7 f1o3 f1o3 the the estate b7 6a7 of +ee0 of Absolute Sale on #ul7 "% "&'% fo1 6hich he ha0 ust pai0 P>&&%::.:: as pu1chase p1ice% it 6oul0 ha/e been utte1l7 senseless fo1 petitione1 #ose R. Bun0alian to sell the sa3e p1ope1t7 to p1i/ate 1espon0ents the /e17 ne8t 0a 7% #ul7 % "&'% 6ith o1 6ithout the 1i5ht of 1epu1chase. No othe1 conclusion is possible e8cept e8cept that the +ee0 of Sale 6ith Ri5ht to Repu1chase is p1ecisel7 the secu1it7 the euitable 3o1t5a5e ? to petitione1 #ose R. Bun0alian to enable the latte1 to pu1chase the p1ope1t7 f1o3 f1o3 the afo1e3entione0 afo1e3entione0 estate. @> (t 6oul0 ul0 ha ha/e been been 3o 3o11e se sense nseless ess fo1 fo1 petitione1 #ose R. Bun0alian to sell the p1ope1t7 to p1i/ate 1espon0ents at the sa3e p1ice of P>&&%::.:: he ha0 pai0 the estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata% 6ithout p1ot an0 at a su1e loss. B7 the te13s of the +ee0 of Sale 6ith Ri5ht to Repu1chase Repu1chase he 6oul0 ha/e to 1epu1chase the p1ope1t7 at a continuall7 inc1easin5 inc1easin5 p1ice% f1o3 Pl :.:: pe1 sua1e 3ete1 to P"&:.:: pe1 sua1e 3ete1% that is% up to P"!!%":.:: P"!!%":.:: o/e1 an0 abo/e the o1i5inal p1ice of P>&&%::.::% in onl7 fou1 @> 3onths. A5ain% no othe1 conclusion is possible but that the cont1act is an euitable 3o1t5a5e% not a sale. @ @ (t is p1o/ p1o/i0 i0e0 e0 in the the +ee +ee0 0 of of Sal Sale e 6it 6ith h Ri5 Ri5ht ht to Repu1chase Repu1chase that J(t is a51ee0 that the /en0o1 @#ose R. Bun0alian shall ha/e the 1i5ht to possess% use% an0 buil0 on% the p1ope1t7 0u1in5 the pe1io0 of 1e0e3ptionJ @p. !:% Anne8 9A9. (t has been hel0 that the1e is a Jloan 6ith secu1it7J 1athe1 than a pacto 0e 1et1o sale 6he1e b7 a51ee3ent the /en0o1 6as to 1e3ain in possession of the lan0s @Escoto /s. A1cilla% =& Phil. "&&% :>. ;he1e the1e 6as an acno6le053ent of the /en0o1Js 1i5ht to 1etain possession of the p1ope1t7% as in the case at ba1% the cont1act 6as one of 9loan 5ua1antee0 b7 a 3o1t5a5e9 1athe1 than a con0itional sale @Maco7 /s. T1ini0a0% & Phil. "&% :. (n0ee0% the1e can be no uestion that petitione1 #ose R. Bun0alian 1e3aine0 le5all7 in possession of the subect p1ope1t7. A5ain% the conclusion is ineluctable that the +ee0 of Sale 6ith Ri5ht to Repu1chase 6as e8ecute0 as secu1it7 fo1 the loan e8ten0e0 b7 p1i/ate 1espon0ents to petitione1 #ose R. Bun0alian% i.e.% as euitable 3o1t5a5e. @$ The inc1 nc1ease ease pe1 pe1 3on 3onth th in the the all alle5e0 e5e0 1e0e3ption p1ice is /e17 co3patible 6ith the (0ea that the t1ansaction 6as 1eall7 inten0e0 b7 the pa1ties to be a 3o1t5a5e. (t bea1s e3phasis% at this unctu1e% that the suppose0 1epu1chase p1ice is in the sa3e a3ount as the o1i5inal 9p1ice9 of P>&&%::.:: P>&&%::.:: shoul0
91epu1chase9 91epu1chase9 be eIecte0 0u1in5 the 1st 3onth f1o3 an0 afte1 the 0ate of the inst1u3ent P!%>=:.:: co3pute0 at P"$:.:: pe1 sua1e 3ete1 shoul0 91epu1chase9 91epu1chase9 be eIecte0 afte1 the 1st 3onth P$%'$:.:: P$%'$:.:: co3pute0 at P"':.:: pe1 sua1e 3ete1 shoul0 91epu1chase9 be afte1 the secon0 3onth P&&%:>:.:: P&&%:>:.:: co3pute0 at P"=:.:: pe1 sua1e 3ete1 shoul0 91epu1chase9 be afte1 the thi10 3onth o1 P$!%!:.:: P$!%!:.:: co3pute0 at P"&:.:: pe1 sua1e 3ete1 shoul0 91epu1chase9 be eIecte0 e/en 9afte1 the fou1th 3onth9 @pp. &-!:% Anne8 9A9. The 3onthl7 inc1eases in the alle5e0 91e0e3ption p1ice9clea1l7 1ep1esent 1ep1esent nothin5 but inte1est. (t is 6ell-settle0 that p1o/ision fo1 inte1est pa73ents is a clea1 in0ication that the suppose0 sale is actuall7 an euitable 3o1t5a5e @Maco7 /s. T1ini0a0% & Phil. "&% : Escoto /s. A1cilla% A1cilla% =& Phil. "&&% :>. This 6oul0 fall un0e1 the le5al situation 96he1e it 3a7 be fai1l7 infe11e0 infe11e0 that the th e 1eal intention of the pa1ties is that the t1ansaction shall secu1e the pa73ent of a 0ebt o1 the pe1fo13ance of an7 othe1 obli5ation9 @No. $% A1t. ":$% Ci/il Co0e. To 3ae 3atte1s 6o1se% the 3onthl7 inc1ease in the suppose0 91e0e3ption p1ice9% 3eanin5 the inte1est of cou1se% a1e clea1l7 usu1ious% p1ecisel7 one of the e/ils sou5ht to be ne5ate0 b7 the p1o/isions of A1ticles "$:% "$:! an0 "$:> of the Ci/il Co0e% as note0 p1e/iousl7 he1ein. @' @' ;hi ;hile the the +ee0 ee0 of of Sal Sale e 6i 6ith Ri5ht i5ht to Repu1chase Repu1chase suppose0l7 p1o/i0e0 fo1 a 91e0e3ption9 pe1io0 of 9fou1 @> 3onths f1o3 an0 afte1 the 0ate of this inst1u3ent9 @p. &% Anne8 9A9% it late1 necessa1il7 p1o/i0e0 fo1 a built-in e8tension of the pe1io0 of J1e0e3ptionJ b7 p1o/i0in5 fo1 pa73ent of the a3ount of P$!%!:.:: co3pute0 at P"&:.:: pe1 sua1e 3ete1 shoul0 91epu1chase9 be eIecte0 9afte1 the fou1th 3onth9 @p. !:% Anne8 9A9. (n othe1 6o10s% it 6as i3plicitl7 a51ee0 that the pe1io0 of J1epu1chaseJ J1epu1chaseJ 6as not li3ite0 to > 3onths f1o3 an0 afte1 the 0ate of e8ecution e8ecution of the inst1u3ent% in as 3uch as sai0 91epu1chase9 91epu1chase9 coul0 be eIecte0 e/en 9afte1 the fou1th 3onth9. (t is 6ell ? settle0 that e8tension of the pe1io0 of 91e0e3ption9 is in0icati/e of euitable 3o1t5a5e @Nos.@! an0 @$% A1t. "$:% Ci/il Co0e Re7es Re7es /s. +e Leon% : SCRA !$&% !':.l6phlit @= @= (t 3a 3a7 7 be be a1 a15ue0 5ue0%% as as p1i p1i/a /ate te 1espo espon0 n0en ents ts ha/e ha/e a15ue0% that no13all7 a loan 0oes not e8cee0 $: of the p1ice of the lan0 5i/en as secu1it7% so that p1i/ate 1espon0ents coul0 not ha/e loane0 P>&&%::.:: P>&&%::.:: on the lan0 the /alue of 6hich 6as clai3e0 to be also P>&&%::.::. P>&&%::.::. ,o6e/e1% such 1easonin5 is clea1l7 unsoun0. (t loses si5ht of the fact that p1i/ate 1espon0ents p1ecisel7 fun0e0 o1 nance0 petitione1 #ose R. Bun0alianJs Bun0alianJs acuisition of the p1ope1t7 f1o3 f1o3 the estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata. (n othe1 6o10s% petitione1 #ose R. Bun0alian coul0 not ha/e acui1e0 the lan0 to se1/e as secu1it7 fo1 the 1epa73ent of the loan unless p1i/ate 1espon0ents ha0 e8ten0e0 the loan in the 1st place. Su1el7% p1i/ate 1espon0ents stoo0 to benet eno13ousl7 f1o3 f1o3 such nancin5 t1ansaction in /ie6 of the patentl7 usu1ious 3onthl7 inte1ests t1anspa1entl7 t1anspa1entl7 0is5uise0 as the accele1atin5 o1 inc1easin5 3onthl7 J1epu1chaseJ p1ice. At an7 1ate% in the e/ent that petitione1 #ose R. Bun0alian ulti3atel7 faile0 to pa7 the loan% the 1api0 inc1ease in the p1ice of the lan0% 6hich 6as esti3ate0 to be 6o1th at least P$!%!:.:: afte1 > 3onths @f1o3 the initial P>&&%::.::% p1acticall7 5ua1antee0 a /e17 5oo0 1etu1n on the 3one7 in/est3ent of p1i/ate 1espon0ents as 3one7- len0e1s. @& @& (t cann cannot ot be ue uest stio ione ne0 0 that that peti petiti tion one1 e1 #ose #ose R. Bun0alian pai0 ta8es on the lan0% e/en afte1 the suppose0 > 3onth pe1io0 of 91e0e3ption9. Pa73ent of ta8es afte1 e8pi1ation of the suppose0 91e0e3ption9 pe1io0 has been consi0e1e0 as in0icati/e of euitable 3o1t5a5e @Escoto /s. A1cilla% A1cilla% sup1a. @": @": (t is is an a03 a03it itte te0 0 fact fact tha thatt p1i/ p1i/at ate e 1esp 1espon on0e 0ent nts s too so3e ti3e befo1e lin5 thei1 petition fo1 consoli0ation of o6ne1ship. P1i/ate 1espon0ents
a03itte0 in sai0 petition that 93o1e than a 7ea1 has elapse0 since the e8ecution of the +ee0 of Sale 6ith Ri5ht to Repu1chase9 @p. !>% pa1. !% Anne8 9A9. Reconin5 > 3onths f1o3 #ul7 % "&'% it 6oul0 appea1 that the 91epu1chase9 pe1io0 e8pi1e0 suppose0l7 on No/e3be1 % "&'. As p1i/ate 1espon0ents le0 thei1 petition fo1 consoli0ation on Au5ust '% "&'$% it is clea1 that the7 0ela7e0 lin5 sai0 petition b7 3o1e than & 3onths. A si3ila1 0ela7 in the lin5 of the suppose0 9/en0eeJs9 petition fo1 consoli0ation 6as consi0e1e0 as in0icati/e of euitable 3o1t5a5e @Re7es /s. 0e Leon% : SCRA !$&% !'=. @"" @"" (f the the +ee +ee0 0 of Sale Sale 6it 6ith h Ri5h Ri5htt to Rep Repu1 u1ch chas ase e 6oul0 not be consi0e1e0 as an euitable 3o1t5a5e% it 6oul0 1esult that the1e 6as actuall7 no secu1it7 fo1 the loan of P>&&%::.:: P>&&%::.:: e8ten0e0 b7 p1i/ate 1espon0ents to petitione1s #ose R. Bun0alian% 6hich 6oul0 3ae no sense at all consi0e1in5 the eno13it7 of the loan. The1e 6as% to be su1e% a secu1it7 fo1 sai0 loan% none othe1 than the euitable 3o1t5a5e tainte0 6ith usu17 an0 0is5uise0 as the +ee0 of Sale 6ith Ri5ht to Repu1chase. The p1i/ate 1espon0ents 1espon0ents a15ue0 that the petitione1sJ petitione1sJ contention is t1ue onl7 in cases 6he1e the cont1act o1 inst1u3ent is not 1eecti/e of the t1ue intentions of the cont1actin5 pa1ties as 6oul0 6a11ant 1efo13ation of the sa3e. The7 state0 that if the intention of the pa1ties is to e8ecute a 0ee0 of sale 6ith pacto 0e 1et1o% the cont1act shoul0 be hel0 as such. The petitione1s 6e1e alle5e0l7 full7 a6a1e a6a1e that the 0ee0 of sale 6ith pacto 0e 1et1o is 6hat it pu1po1ts to be an0 nothin5 else. *u1the13o1e% the petitione1s 6aite0 fo1 the pe1io0 of 1e0e3ption to e8pi1e befo1e a/ailin5 of the 1elief 51ante0 b7 the Ci/il Co0e of 1efo13ation of cont1acts. ;e n0 the stan0 of the p1i/ate 1espon0ents 6ithout 3e1it. The intent of the pa1ties to ci1cu3/ent ci1cu3/ent the p1o/ision p1o/ision 0iscou1a5in5 pacto 0e 1et1o t1ansactions is /e17 appa1ent f1o3 the 1eco10s. A1ticle "$: of the Ci/il Co0e states) A1tic A1ticle le "$: "$:. . The cont1a cont1act ct shal shalll be be p1esu p1esu3e0 3e0 to be be an euitable 3o1t5a5e% in an7 of the follo6in5 cases) @" ;hen hen the the p1i p1ice of of a sale sale 6ith 1i5ht 5ht to to 1epu1chase 1epu1chase is unusuall7 ina0euate @ @ ;hen ;hen the the /en0 /en0o1 o1 1e3 e3ai ains ns in poss posses essi sion on as lessee o1 othe16ise @! @! ;hen ;hen upon upon o1 afte afte11 the the e8pi1 8pi1at atio ion n of of the the 1i5h 1i5htt to 1epu1chase anothe1 inst1u3ent e8ten0in5 the pe1io0 of 1e0e3ption o1 51antin5 a ne6 pe1io0 is e8ecute0 @> @> ;hen ;hen the the pu1 pu1ch chas ase1 e1 1etai etains ns fo1 fo1 hi3 hi3se self lf a pa1 pa1tt of the pu1chase p1ice @ ;hen hen the the /en0o en0o11 bi bin0s n0s hi3 hi3se self lf to pa7 pa7 the the ta8es on the thin5 sol0 @$ @$ (n an7 an7 oth othe1 e1 ease eases s 6he 6he11e it it 3a7 3a7 be fai1 fai1l7 l7 infe11e0 infe11e0 that the 1eal intention of the pa1ties is that the t1ansaction shall secu1e the pa73ent of a 0ebt o1 pe1fo13ance pe1fo13ance of an7 othe1 obli5ation. (n an7 of the fo1e5oin5 cases% an7 3one7% f1uits% o1 othe1 benet to be 1ecei/e0 b7 the /en0ee as 1ent o1 othe16ise shall be consi0e1e0 as inte1est 6hich shall be subect to the usu17 la6s. Si5nicantl7% a po1tion of the 0ocu3ent in uestion 1ea0s) @The /en0o1 ha/in5 ust pu1chase0 the sa3e f1o3 the (ntestate estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata @Special P1ocee0in5s No. B-'": of the Cou1t of *i1st (nstance of Ca/ite% 6ith fun0s loane0 to hi3 b7 the he1ein EN+EES. @E3phasis supplie0.
This state3ent appea1in5 appea1in5 in the suppose0 pacto 0e 1et1o sale con13s the 1eal intention of the pa1ties to secu1e the pa73ent of the loan acui1e0 b7 the petitione1s f1o3 the p1i/ate 1espon0ents. The sale 6ith the 1i5ht to 1epu1chase of the th1ee pa1cels of lan0 6as fo1 P>&&%::.::% P>&&%::.::% 6hich 6as e8actl7 the sa3e a3ount pai0 to the estate of the 0ecease0 A5apita Sa1ao 0a. 0e i1ata- Afte1 ha/in5 pu1chase0 the th1ee lots fo1 P>&&%::.::% P>&&%::.::% the /en0o1s shoul0 at least ha/e ea1ne0 a little p1ot o1 inte1est if the7 1eall7 inten0e0 to 1esell the lots the follo6in5 0a7. (nstea0% the7 suIe1e0 a loss of P%:::.:: because the a3ount bo11o6e0% an0 6e n0 51oun0s to belie/e thei1 state3ent of ha/in5 a0/ance0 P%:::.:: of thei1 o6n fun0s as ea1nest 3one7% 6as actuall7 onl7 P>'>%:::.::. P>'>%:::.::. The petitione1s also boun0 the3sel/es to pa7 e8cee0in5l7 stiI p1ices fo1 the p1i/ile5e of 1epu1chase. The intent of the pa1ties is fu1the1 sho6n b7 the fact that the Bun0alians P::%:::.:: P::%:::.:: collectibles 0ue f1o3 the 5o/e1n3ent fo1 co3plete0 const1uction cont1acts coul0 not be collecte0 on ti3e to pa7 fo1 the lots a0/e1tise0 fo1 sale in Bulletin To0a7. The petitione1s ha0 to 1un to the p1i/ate 1espon0ents 6ho ha0 3one7 to len0. The Bun0alians 1ecei/e0 the accounts 0ue f1o3 the 5o/e1n3ent onl7 in "&'' afte1 the p1ocee0in5s in the t1ial cou1t 6e1e 6ell un0e16a7. The stipulation in the cont1act cont1act sha1pl7 escalatin5 escalatin5 the 1epu1chase 1epu1chase p1ice e/e17 3onth enhances the p1esu3ption that the t1ansaction is an euitable 3o1t5a5e. (ts pu1pose is to secu1e the 1etu1n of the 3one7 in/este0 6ith substantial p1ot o1 inte1est% a co33on cha1acte1istic of loans. The p1i/ate 1espon0ents 1espon0ents t17 to capitali4e capitali4e on an a03ission b7 M1s. Bun0alian that she 9accepte09 the t1ansaction no6in5 it to be a cont1act of sale 6ith 1i5ht of 1epu1chase. The 1eliance is 51oun0e0 on sha7 foun0ations. The Bun0alians 6e1e in the const1uction business an0 ne6 uite 6ell 6hat the7 6e1e si5nin5. But /en0o1s co/e1e0 b7 A1ticle "$: of the Ci/il Co0e a1e usuall7 in no position to ba15ain 6ith the /en0ees an0 6ill si5n one1ous cont1acts to 5et the 3one7 the7 nee0. (t is p1ecisel7 this e/il 6hich the Ci/il Co0e 5ua10s a5ainst. (t is not the no6le05e of the /en0o1s that the7 a1e e8ecutin5 a cont1act of sale pacto 0e 1et1o 6hich is the issue but 6hethe1 o1 not the 1eal cont1act 6as one of sale o1 a loan 0is5uise0 as a pacto 0e 1et1o sale. The cont1act also p1o/i0es that 9it 9it is a51ee0 that the /en0o1 shall ha/e the 1i5ht to possess% use% an0 buil0 on% the p1ope1t7 0u1in5 the pe1io0 of 1e0e3ption.9 ;hen the /en0ee acno6le05e0 the 1i5ht of the /en0o1 to 1etain possession of the p1ope1t7 the cont1act is one of loan 5ua1antee0 b7 3o1t5a5e% not a con0itional sale o1 an option to 1epu1chase. @Maco7 /s. T1ini0a0% T1ini0a0% et al.% & Phil. Phil. "&. The 1espon0entsJ contention contention that the 1i5ht to possess% possess% use% o1 buil0 on the lots e3bo0ie0 in the cont1act 6as a 3e1e 91i5ht9 an0 not actual possession appea1s to be sophist17. The 1eco10s sho6 that the Bun0alians const1uction euip3ent such as t1acto1s% pa7loa0e1s% an0 bull0o4e1s 6e1e on the lots. A shop 6as built on the p1e3ises. M1. M1. Bun0alian testie0 that f1o3 the ti3e he pu1chase0 the p1ope1t7 f1o3 the estate of M1s. i1ata up to the 93inute9 he testie0% he ne/e1 lost possession. The Bun0alians pai0 the 1eal estate ta8es on the lots. As a5ainst the e8p1ess e8p1ess p1o/ision of the cont1act an0 the actual possession b7 the petitione1s% the p1i/ate 1espon0ents co3e up 6ith a fa1 fetche0 a15u3ent that since the titles to the lots 6e1e in thei1 han0s% the7 6e1e the ones in le5al possession. Pa1entheticall7% Pa1entheticall7% the titles in thei1 han0s 6e1e still in the na3e of the estate of A5apita Sa1ao 0a. 0e i1ata% the o1i5inal /en0o1-o6ne1. (N (E; O* T,E *OREGO(NG% the 0ecisions ofJ the 1espon0ent Cou1t of Appeals an0 the t1ial cou1t a1e he1eb7 REERSE+ REERSE+ an0 SET AS(+E. The 0ee0 of sale 6ith 1i5ht to 1epu1chase 1epu1chase is 0ecla1e0 as an euitable
3o1t5a5e. The petitione1s a1e o10e1e0 to pa7 thei1 0ebt to the p1i/ate 1espon0ents 6ith le5al 1ate of inte1est f1o3 the ti3e the7 acui1e0 the loan until it is full7 pai0. SO OR+ERE+.
Republic Republic of the Philippines SUPREME COURT Manila SECON+ +((S(ON G.R. No No. LL->=
*eb1ua17 = =% "&=!
,ERMENEG(L+O ,ERMENEG(L+O R. ROSALES% plaintiI-appellant% /s. PEREGR(N BOA% P1o/incial +eput7 She1iI of Sa3a1 an0 the REG(STER O* +EE+S fo1 the P1o/ince of Sa3a1% 0efen0ants-appellees.
+E CASTRO% #.) This case 6as ce1tie0 ce1tie0 to this Cou1t b7 the fo13e1 Cou1t of Appeals pe1 its Res Resolution olution of No/e3be1 "!% "&' the appeal the1eto 3a0e ha/in5 1aise0 pu1el7 le5al uestion% 6hich is 6hethe1 o1 not the Cou1t of *i1st (nstance of Sa3a1% in Ci/il Case No. ! entitle0 9,e13ene5il0o Rosales /s. Pe1e51in boa% et al.% 9 e11e0 in 0ecla1in5 the le5alit7 an0 /ali0it7 of the 1e0e3ption 3a0e b7 the 3o1t5a5o1 Pe01o Oli/e1io Oli/e1io of his title0 p1ope1t7. (t appea1s that b7 /i1tue of the fo1eclosu1e fo1eclosu1e of 1eal estate 3o1t5a5e 0ul7 e8ecute0 b7 the 3o1t5a5o1 Pe01o Oli/e1io in fa/o1 of the +e/elop3ent Ban of the Philippines% as secu1it7 fo1 the pa73ent of the a3ount of P"%:::.::% P"%:::.::% an0 afte1 5i/in5 notice of the 0ate% ti3e an0 place of sale as 1eui1e0 b7 la6% 0efen0antappellee +eput7 She1iI of Sa3a1 Pe1e51in Pe1e51in boa% sol0 at public auction on #anua17 =% "&': to plaintiI-appellant Rosales% Ros ales% the hi5hest bi00e1% fo1 the total a3ount of fou1teen thousan0 /e hun01e0 pesos @P">%::.::% @P">%::.::% the pa1cel of lan0 co/e1e0 b7 T.C.T. No. T-$>$ of the Re5iste1 of +ee0s fo1 the P1o/ince of Sa3a1. The co11espon0in5 co11espon0in5 She1iIJs ce1ticate of sale 6as issue0 in fa/o1 of plaintiI-appellant% 6hich ce1ticate 6as 1e5iste1e0 1e5iste1e0 in the OKce of the Re5iste1 of +ee0s fo1 the P1o/ince of Sa3a1 on *eb1ua17 !% "&':. On #anua17 !% "&'"% afte1 the 3o1t5a5o1 Pe01o Oli/e1io ha0 se1/e0 notice in 61itin5 of the 1e0e3ption an0 ha0 pai0 on sai0 0ate to 0efen0ant-appellee +eput7 She1iI the p1incipal a3ount of P">%::.:: plus P"%$&".:: 1ep1esentin5 1ep1esentin5 the one @" pe1 centu3 inte1est pe1 3onth% the latte1 e8ecute0 a +ee0 of Ce1ticate of Re0e3ption 1esto1in5% con/e7in5 an0 assi5nin5 unto the sai0 3o1t5a5o1% his hei1s an0 assi5ns all the estate% 1i5ht% title an0 inte1est on sai0 fo1eclose0 p1ope1t7. On Ma1ch ":% "&'"% plaintiI-appellant le0 the instant co3plaint fo1 cancellation of ce1ticate of 1e0e3ption alle5in5 that no /ali0 1e0e3ption 6as eIecte0 because 6hile the 3o1t5a5o1 ha0 pai0 6ithin the pe1io0 of 1e0e3ption the pu1chase p1ice in the su3 of P">%::.:: plus P"%$&".:: 1ep1esentin5 " inte1est pe1 3onth% he% ho6e/e1% faile0 to ten0e1 pa73ent of " the full inte1est on the pu1chase p1ice% 6hile shoul0 be P"%'".=>% P"%'".=>% instea0 of Pl%$&".:: actuall7 pai0 b7 the 3o1t5a5o1% the1eb7 lea/in5 lea/in5 a 0ecienc7 in the su3 of P>.=> the su3 of P!.:: 1ep1esentin5 1ep1esentin5 the 1e5ist1ation 1e5ist1ation fee of the ce1ticate of sale% plus inte1est the1eon of P:.:> ! the 0elinuent 1eal estate ta8es of the subect p1ope1t7 fo1 the 7ea1s "&$: to "&': a3ountin5 to P'>.>' an0 > the She1iIJs co33ission in the su3 of P&&.=. On Ma1ch % "&'"% 0efen0ants-appellees le0 an ans6e1 alle5in5 that 6hile it is t1ue that 3o1t5a5o1 Pe01o Pe01o Oli/e1io has ten0e1e0 to 0efen0ant- appellee +eput7 She1iI the a3ount of P">%::.:: plus Pl%$&".:: fo1 1e0e3ption 1e0e3ption pu1pose% the su3 ten0e1e0 bein5 the a3ount of the auction pu1chase p1ice plus " inte1est pe1 3onth the1eon up to the ti3e of 1e0e3ption an0 the ten0e1 bein5 ti3el7 3a0e an0 in 5oo0 faith% the sa3e is a /ali0 one acco10in5 to Section
!:% Rule !& of the Rules of Cou1t that 51antin5 in a15uen0o% that the p1ope1t7 subect of 1e0e3ption is 0elinuent in the pa73ent of 1eal estate ta8es fo1 the 7ea1s "&$: to "&': in the total a3ount of P'>%>'% it 6ill not in an76a7 aIect the 1e5ula1it7 an0 /ali0it7 of the 1e0e3ption fo1 no 61itten notice that an7 such assess3ents o1 ta8es a1e pai0 b7 the plaintiI-appellant as pu1chase1% 6as 5i/en to 0efen0ant appellee +eput7 She1iI 6ho 3a0e the sale the1eof an0 such not ha/e le0% the p1ope1t7 3a7 be 1e0ee3e0 e/en 6ithout pa7in5 such assess3ents o1 ta8es. On Au5ust "$% "&'"% the t1ial cou1t con0ucte0 a p1et1ial of the case. Afte1 such p1e-t1ial an0 upon 3otion of -plaintiI-appellant% the t1ial cou1t 1en0e1e0 a su33a17 u053ent% pu1suant to Rule Rule !> of the Rules Rules of Cou1t% since the ans6e1 of 0efen0ants-appellees 1aises no 5enuine issue of 3ate1ial facts% as 6ell as thei1 a03ission of the 5enuineness an0 0ue e8ecution of the Ce1ticate of Sale e8ecute0 b7 0efen0ant-appellee +eput7 She1iI in fa/o1 of plaintiI-appellant the pa73ent of ent17 fee an0 annotation on TCT No. T-$>: of the Ce1ticate of Sale in the su3 of P!.:: the Ce1ticate of Re0e3ption e8ecute0 b7 0efen0antappellee +eput7 She1iI in fa/o1 of 3o1t5a5o1 Pe01o Oli/e1io the Ce1ticate of +elinuenc7 of 1eal estate ta8es of the subect p1ope1t7 in the a3ount of P'>.>' an0 the non-pa73ent of she1iIJs co33ission in the su3 of P&&.=. (n the su33a17 u053ent the t1ial cou1t 0is3isse0 the plaintiI-appellantJs co3plaint an0 0ecla1e0 that the Ce1ticate of Re0e3ption of the p1ope1t7 sol0 at public auction is /ali0 an0 le5al 96ithout p1eu0ice to the 1i5ht of the plaintiI-appellant to 1eco/e1 f1o3 the 1e0e3ptione1 the su3 of P:.$' 1ep1esentin5 1ep1esentin5 the 0eciencies in the " 3onthl7 inte1est " an0 the su3 of P!.:: 1ep1esentin5 the ent17 an0 annotation fees of the Re5iste1 of +ee0 of Sa3a1 fo1 the 1e5ist1ation of the Ce1ticate of Sale to5ethe1 6ith the su3 of P:.:> 1ep1esentin5 inte1est on the last state0 a3ount f1o3 *eb1ua17 !% "&': to #anua17 !% "&'".9 On +ece3be1 "!% "&'"% plaintiI-appellant% afte1 1eceipt of the Su33a17 #u053ent% le0 his Reco10 on Appeal% Notice of Appeal an0 Appeal Bon0. On Ma7 "%"&'% the t1ial cou1t app1o/e0 the Reco10 Reco10 on Appeal an0 o10e1e0 the t1ans3ittal of the 1eco10s of the case to the Cou1t of Appeals. As afo1e3entione0% the Cou1t of Appeals ce1tie0 the case to this Cou1t on the 51oun0 that it in/ol/es the pu1el7 le5al uestion of 6hethe1 o1 not a /ali0 an0 le5al 1e0e3ption 6as 3a0e b7 the 3o1t5a5o1 Pe01o Oli/e1io of his title0 p1ope1t7. The1e is no uestion uestion that Pe01o Pe01o Oli/e1io has the the 1i5ht to 1e0ee3 the subect p1ope1t7% in /ie6 of the p1o/isions of section $ of Act !"!% as a3en0e0 b7 Act No. >">=. The p1oce0u1e fo1 eIectin5 such 1e0e3ption is containe0 in section !:% Rule !& of the Rules of Cou1t% the pe1tinent po1tion of 6hich p1o/i0es) Sec. !:. Ti3e an0 3anne1 of% an0 a3ounts pa7able on successi/e 1e0e3ptions. 1e0e3ptions. Notice to be 5i/en an0 le0 .The u053ent 0ebto1% o1 1e0e3ptione1% 3a7 1e0ee3 the p1ope1t7 f1o3 the pu1chase1% at an7ti3e 6ithin t6el/e @" 3onths afte1 the sale% on pa7in5 the pu1chase1 the a3ount of his pu1chase% 6ith one pe1 centu3 pe1 3onth inte1est the1eon in a00ition% up to the ti3e of 1e0e3ption% to5ethe1 6ith the a3ount of an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1eon afte1 pu1chase% an0 inte1est on such last 1oa3e0 a3ount at the sa3e 1ate ... 888
888
888
;1itten notice of an7 1e0e3ption 3ust be 5i/en to the OKce1 6ho 3a0e the sale an0 a 0uplicate le0 6ith the 1e5iste1 of 0ee0s in the p1o/ince ... Pu1suant to the abo/e-cite0 p1o/ision% p1o/ision% the 1euisites fo1 a /ali0 1e0e3ption a1e) " the 1e0e3ption 3ust be 3a0e 6ithin t6el/e @" 3onths f1o3 the ti3e of the
1e5ist1ation 1e5ist1ation of the sale in the OKce of the Re5iste1 Re5iste1 of +ee0s @Go1ospe /s. Santos% $& SCRA "&" A5bulos /s. Albe1to% SCRA '&: Santos /s. Rehabilitation *inance Co1po1ation% et al.% ":" Phil. &=: pa73ent of the pu1chase p1ice of the p1ope1t7 in/ol/e0% plus " inte1est pe1 3onth the1eon% if an7% pai0 b7 the pu1chase1 afte1 the sale 6ith the sa3e 1ate of inte1ests @Rosa1io /s. Ta7u5 Ru1al Ban% SCRA ": cite0 in Tolentino Tolentino /s. Cou1t of of Appeals% ":$ SCRA SCRA "! "! an0 ! 61itten notice of the 1e0e3ption 3ust be se1/e0 on the oKce1 6ho 3a0e the sale an0 a 0uplicate le0 6ith the Re5iste1 of +ee0s of the p1o/ince. The1e is no 0ispute% 0ispute% that in the case at ba1% the 3o1t5a5o1 Pe01o Oli/e1io ten0e1e0 pa73ent of the pu1chase p1ice on #anua17 !% "&'"% 6ell 6ithin the 1e0e3ption pe1io0 of t6el/e @" 3onths afte1 the 1e5ist1ation 1e5ist1ation of the sale on *eb1ua17 !%"&': an0 that 0efen0ants-appellees +eput7 She1iI of Sa3a1 an0 the Re5iste1 Re5iste1 of +ee0s of Sa3a1 6e1e 0ul7 notie0 in 61itin5 of the 3o1t5a5o1Js 0esi1e to 1e0ee3 the subect p1ope1t7. Euall7 be7on0 uestion is the fact that 3o1t5a5o1 Pe01o Oli/e1io Oli/e1io ten0e1e0 the su3 of P">%::.:: co11espon0in5 to the pu1chase of the p1ope1t7% an0 the a3ount of P"%$&".:: 1ep1esentin5 1ep1esentin5 the " 3onthl7 inte1est the1eon% althou5h the t1ial cou1t foun0 a 0ecienc7 of P:.$' 0ue an0 o6in5 to the plaintiI-appellant. The 3o1t5a5o1% the1efo1% has substantiall7 co3plie0 6ith the 1eui1e3ents of the la6 to eIect 1e0e3ption% fo1 6hich 1eason a Ce1ticate of Re0e3ption Re0e3ption 6as issue0 in his fa/o1 b7 0efen0antappellee +eput7 She1iI. But plaintiI-appellant 6oul0 insist that althou5h 3o1t5a5o1 Pe01o Oli/e1io Oli/e1io ha0 ten0e1e0 pa73ent of the pu1chase p1ice of P">%::.:: an0 the inte1est of P"%$&".::% P"%$&".::% ne/e1theless% no /ali0 1e0e3ption 6as eIecte0 b7 the latte1% since the1e a1e still fou1 0eciencies 6hich the 3o1t5a5o1 faile0 to pa7. *i1stl7% plaintiI-appellant 6oul0 conten0 that the1e is still a 0ecienc7 inte1est of P>.=> on the pu1chase p1ice since the inte1est the1eon shoul0 be co3pute0 f1o3 the 0ate of the auction sale% that is% #anua17 =% "&':% an0 not f1o3 the 0ate of th e 1e5ist1ation the1eof the1eof on *eb1ua17 *eb1ua17 !% "&':. The contention is 6ithout 3e1it. PlaintiI-appellant has not cite0 an7 autho1it7 to suppo1t his theo17 that the inte1est on the pu1chase p1ice shoul0 be co3pute0 f1o3 the 0ate of the sale an0 not f1o3 the 1e5ist1ation the1eof. ;e 1ule that since the pe1io0 of 1e0e3ption be5ins onl7 f1o3 the 0ate of the 1e5ist1ation of the ce1ticate of sale in the OKce of the Re5iste1 of +ee0s% it bein5 onl7 then that the ce1ticate taes eIect as a con/e7ance% ! the co3putation of the inte1est on the pu1chase p1ice shoul0 also be 3a0e to co33ence f1o3 that 0ate. Secon0l7% althou5h the a3ount of P!.:: 1ep1esentin5 the 1e5ist1ation fee incu11e0 b7 plaintiI-appellant 3a7 be consi0e1e0 as an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1eon afte1 pu1chase%9 still the non-pa73ent of this a3ount b7 the 3o1t5a5o1 Pe01o Oli/e1io 6ill not 1en0e1 in/ali0 his 1e0e3ption% since% as 0iscusse0 abo/e% he has substantiall7 co3plie0 6ith the le5al 1eui1e3ents 1eui1e3ents fo1 a /ali0 1e0e3ption. Thi10l7% as to to the non-pa73ent of 1eal 1eal estate ta8es ta8es of the subect p1ope1t7 fo1 the 7ea1s "&$: to "&': a3ountin5 to P'>.>'% the sa3e shoul0 not aIect the 1e5ula1it7 an0 /ali0it7 of the 1e0e3ption 3a0e b7 the 3o1t5a5o1 Pe01o Oli/e1io. Oli/e1io. The latte1 is not le5all7 boun0 to pa7 such a3ount to plaintiI-appellant as pu1chase1% fo1 Section !:% Rule !& clea1l7 p1o/i0es that 9the u053ent 0ebto1% o1 1e0e3ptione1% 3a7 1e0ee3 the p1ope1t7... p1ope1t7... on pa7in5 the pu1chase1 ... the a3ount of an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1eon afte1 pu1chase an0 inte1est on such last-na3e0 a3ount at the sa3e 1ate.9 No6he1e in the Reco10s Reco10s is it sho6n that plaintiI-appellant ha0 pai0 such a3ount. On the cont1a17% 0efen0ants-appellees in thei1 Ans6e1 > to plaintiI-appellantJs co3plaint% ha/e a/e11e0 a/e11e0 that no 61itten notice that an7 assess3ents o1
ta8es a1e pai0 b7 the latte1 as pu1chase1% 6as 5i/en to 0efen0ant-appellee +eput7 She1iI of Sa3a1 6ho 3a0e the sale the1eof. (n fact% the Solicito1-Gene1al% in his B1ief le0 in behalf of the 0efen0ants-appellees% has 3a0e the follo6in5 obse1/ation. ;e a1e in0ee0 su1p1ise0 ho6 appellant 6as able to secu1e the 1e5ist1ation of his ce1ticate of sale 6ithout 1st pa7in5 the 0elinuent ta8es as 1eui1e0 b7 Section "% Republic Act No. >$. An e8t1a u0icial fo1eclosu1e fo1eclosu1e sale bein5 in the natu1e of a /olunta17 t1ansaction% appellant shoul0 ha/e been 1eui1e0 b7 the Re5iste1 Re5iste1 of +ee0s of Sa3a1 to pa7 the 0elinuent lan0 ta8es on the subect p1ope1t7 befo1e 1e5iste1in5 his ce1ticate of sale. Pa73ent of 0elinuent lan0 ta8es bein5 a con0ition p1ece0ent to the 1e5ist1ation of appellantJs Ce1ticate of Sale% but 6hich% so3eho6% he 6as able to e/a0e% he cannot no6 a/ail of the issue of such 0elinuent lan0 ta8es to 0efeat the 3o1t5a5o1Js 1i5ht of 1e0e3ption. *inall7% the non-pa73ent of the She1iIJs Co33ission in the su3 of P&&.= 6ill not% lie6ise% aIect the /ali0it7 of 1e0e3ption since such a3ount is not inclu0e0 in the pa73ents 1eui1e0 of a 1e0e3ptione1 as set fo1th in sai0 Section !: of Rule !&. (n ne% ;e hol0 that the failu1e of the 3o1t5a5o1 Pe01o Oli/e1io to ten0e1 the a3ount of P'>.>' 1ep1esentin5 1ep1esentin5 the 0elinuent 1eal estate ta8es of the subect p1ope1t7% the 1e5ist1ation fee of P!.:: an0 the inte1est the1eon of P:.:>% the She1iIJs Co33ission in the su3 of P&&.=% an0 the 0ecienc7 inte1est on the pu1chase p1ice of the subect p1ope1t7% 6ill not 1en0e1 the 1e0e3ption in uestion null an0 /oi0% it ha/in5 been establishe0 that he has substantiall7 co3plie0 6ith the 1eui1e3ents 1eui1e3ents of the la6 to eIect a /ali0 1e0e3ption% 6ith his ten0e1 of pa73ent of the pu1chase p1ice an0 the inte1est the1eon 6ithin t6el/e @" 3onths f1o3 the 0ate of the 1e5ist1ation 1e5ist1ation of the sale. This 1ulin5 is in obe0ience of the polic7 of the la6 to ai0 1athe1 than to 0efeat the 1i5ht of 1e0e3ption. $ ;,ERE*ORE% the 0ecision of the cou1t a uo is he1eb7 aK13e0% 6ithout costs. SO OR+ERE+. Maasia1 @Chai13an% Concepcion% #1.% Gue11e1o% Aba0 Santos an0 Escolin% ##.% concu1.
Republic Republic of the Philippines SUPREME COURT Manila SECON+ +((S(ON G.R. No. L-$$&'
Au5ust &% "&=$
LEONAR+O T(OSECO% petitione1% /s. ,ONORABLE COURT O* APPEALS #OSE P. (LLANUEA an0 T(MOTEA P. (LLANUEA% 1espon0ents. #ose T. T. Su3at fo1 petitione1. petitione1. A3a0o *. Ne1a fo1 1espon0ents.
PARAS% #.) A petition fo1 1e/ie6 b7 ce1tio1a1i of the 0ecision of the 1espon0ent (nte13e0iate Appellate Cou1t in AC-G.R. C No. $==== p1o3ul5ate0 on +ece3be1 '% "&=!% as 6ell as of the Resolution Resolution of sai0 appellate cou1t p1o3ul5ate0 on *eb1ua17 "!% "&=> 0en7in5 the Motion fo1 Reconsi0e1ation Reconsi0e1ation of the afo1esai0 0ecision. The facts of this case case a1e as follo6s) follo6s) The 1espon0ent 1espon0ent spouses #ose P. illanue/a an0 Ti3otea P. illanue/a 3o1t5a5e0 to the Ta1lac B1anch of the Philippine National Ban th1ee lots 0esc1ibe0 in OCT No. C-> issue0 b7 the Re5iste1 of +ee0s of Ta1lac to secu1e pa73ent of a loan of E(G,T T,OUSAN+ S( ,UN+RE+ @P=%$::.:: @P=%$::.:: PESOS. ;hen the7 faile0 to co3pl7 6ith the 3o1t5a5e cont1act% the Philippine National Ban petitione0 the P1o/incial She1iI of Ta1lac to fo1eclose upon the p1ope1ties e8t1au0iciall7. The P1o/incial She1iI in the public auction he con0ucte0 on Ma1ch '% "&'' sol0 the lots to Leona10o Tioseco% he1ein petitione1% as the hi5hest bi00e1 fo1 the a3ount of E(G,TEEN T,OUSAN+ N(NE ,UN+RE+ AN+ SEENT *(E @P"=%&'.:: PESOS. The ce1ticate of sale 0ate0 Ma1ch Ma1ch '% "&'' issue0 issue0 b7 the P1o/incial She1iI to Tioseco 6as 1e5iste1e0 in the OKce of the Re5iste1 of +ee0s of Ta1lac on Ma1ch =% "&''. TiosecoJs o6ne1ship o/e1 the p1ope1ties 6as consoli0ate0% the title of the spouses illanue/a 6as cancelle0 an0 TCT No. ">""&> 6as issue0 to Tioseco b7 the Re5iste1 of +ee0s on Ma1ch '% "&'=. (t is clai3e0 b7 Tioseco that so3eti3e befo1e Ma1ch &% "&'= 1espon0ents illanue/a illanue/a /isite0 hi3 in his house an0 oIe1e0 to pa7 the a3ount he ha0 pai0 fo1 the th1ee lots auctione0 oI on Ma1ch '% "&''. Tioseco tol0 the3 that the7 coul0 1e0ee3 the th1ee lots b7 pa7in5 to hi3 the a3ount he pai0 at the auction sale plus inte1est. The 1espon0ents p1o3ise0 to 1etu1n% but ne/e1 0i0. Upon the othe1 han0% it is clai3e0 b7 the 1espon0ents that the7 oIe1e0 to 1e0ee3 the th1ee lots 6ithin the pe1io0 of 1e0e3ption but Tioseco alle5e0l7 0e3an0e0 T;ENT T;O T,OUSAN+ T,OUSAN+ S( ,UN+RE+ ,UN+RE+ *ORT *ORT ONE PESOS AN+ E(G,T CENTAOS @P%$>".:= as 1e0e3ption p1ice. * *in0in5 in0in5 the a3ount 0e3an0e0 e8cessi/e% e8cessi/e% the 1espon0ents illanue/a le0 a suit on Ma1ch '% "&'= to annul the sale in fa/o1 of Tioseco on the 51oun0 that it 6as i11e5ula1 an0 to 1eui1e both the Philippine National Ban an0 Tioseco to 0ete13ine the a3ount the7 shoul0 pa7 to be able to 1e0ee3 the th1ee lots. The Philippine National National Ban state0 in its ans6e1 ans6e1 that at the ti3e of the auction sale of the th1ee lots on Ma1ch '% "&'' the a3ount of E(G,TEEN T,OUSAN+ N(NE ,UN+RE+ SEENT *(E @P"=%&'.:: PESOS 6as 0ue f1o3 the 1espon0ents. The a3ount inclu0e0 the p1incipal of the loan% acc1ue0 inte1est% se1/ice cha15es% e8penses of fo1eclosu1e% an0 atto1ne7Js fees. The ans6e1 also state0 that the auction sale con0ucte0 b7
the P1o/incial She1iI 6as in acco10ance 6ith the fo13alities an0 othe1 1eui1e3ents p1esc1ibe0 b7 la6. (n his ans6e1% Tioseco 0enie0 ha/in5 0e3an0e0 the su3 of T;ENT T;O T,OUSAN+ S( ,UN+RE+ *ORT ONE PESOS AN+ E(G,T CENTAOS @P%$>"-:= f1o3 the 1espon0ents. Afte1 t1ial the lo6e1 cou1t 1en0e1e0 its 0ecision% the 0ispositi/e po1tion of 6hich 1ea0s;,ERE*ORE% the plaintiIs a1e allo6e0 to 1e0ee3 the p1ope1ties co/e1e0 b7 TCT No. ">""&> of the Re5iste1 of +ee0s of Ta1lac b7 the pa73ent to the 0efen0ant Tioseco of of the a3ount of E(G,TEEN T,OUSAN+ N(NE ,UN+RE+ SEENT *(E @P "=%&'.:: PESOS plus " pe1 3onth inte1est the1eon in a00ition f1o3 the ti3e of the sale on Ma1ch '% "&'' to the ti3e of 1e0e3ption% plus an7 assess3ent fo1 ta8ation 6hich 0efen0ant Tioseco 3a7 3a7 ha/e pai0 the1eon the1eon an0 the inte1est on such a3ount at the sa3e 1ate an0 all othe1 e8penses specie0 in Sec. !:% Rule !& of the Rules of Cou1t 6ithin !: 0a7s f1o3 the nalit7 of this u053ent% 6ithout p1onounce3ent as to costs% On appeal b7 petitione1% the (nte13e0iate Appellate Cou1t aK13e0 in toto the 0ecision of the lo6e1 cou1t. ;ith the 0enial of his 3otion fo1 1econsi0e1ation% the petitione1 le0 this petition fo1 1e/ie6 of the 0ecision of the appellate cou1t. Petitione1 3a0e the follo6in5 assi5n3ent of e11o1s) ( T,E TR(AL COURT COURT ERRE+ (N ,OL+(NG ,OL+(NG T,AT T,AT +E*EN+ANT LEONAR+O T(OSECO PUT UP AN AMOUNT B(GGER T,AN ;,AT ;AS PROPER TO PREENT T,E PLA(NT(**S *ROM EERC(S(NG T,E(R R(G,TS O* RE+EMPT(ON. (( T,E TR(AL COURT COURT ERRE+ (N ,OL+(NG ,OL+(NG T,AT T,AT T,E *A(LURE O* T,E PLA(NT(**S TO MA""&> O* T,E REG(STER O* +EE+S O* TARLAC A*TER T(OSECOJS O;NERS,(P O;NERS,(P TO T,E PROPERT(ES PROPERT(ES ;AS ;AS CONSOL(+ATE+. @pp. &-":% Rollo. ;e p1escin0 f1o3 the assi5n3ent of e11o1s 1aise0 an0 p1ocee0 0i1ectl7 to the uestion p1esente0 befo1e this Cou1t) ,a/e the 1espon0ents e8e1cise0 thei1 1i5ht of 1e0e3ption eIecti/el7V ;e ans6e1 in the aK13ati/e. The1e is no uestion uestion that the 1espon0ents ha/e ha/e the 1i5ht to 1e0ee3 the subect p1ope1t7 in /ie6 of the p1o/ision of Section % P.+. No. $&> @Re/ise0 Cha1te1 of PNB) SEC. . Ri5ht of 1e0e3ption of p1ope1t7-Ri5ht p1ope1t7-Ri5ht of possession 0u1in5 1e0e3ption pe1io0.?;ithin one 7ea1 f1o3 the 1e5ist1ation of the fo1eclosu1e sale of 1eal estate% the 3o1t5a5o1 shall ha/e the 1i5ht to 1e0ee3 the p1ope1t7 b7 pa7in5 all clai3s of the Ban a5ainst hi3 on the 0ate of the sale inclu0in5 all the costs an0 othe1 e8penses incu11e0 b7 1eason of the fo1eclosu1e sale an0 custo07 of the p1ope1t7% as 6ell as cha15es an0 acc1ue0 inte1ests. 888
888
888
;hen the 1espon0ents chose to enfo1ce thei1 1i5ht of 1e0e3ption th1u a cou1t action on Ma1ch '% "&'= the7 6e1e 6ell 6ithin thei1 1i5ht as the action 6as le0 6ithin one 7ea1 f1o3 the 1e5ist1ation of the fo1eclosu1e sale of the 1eal estate on Ma1ch &% "&''. P.+. No. $&> is silent as to an7 fo13al ten0e1 of 1epu1chase p1ice as a p1e-con0ition to a /ali0 e8e1cise of the 1i5ht of 1e0e3ption. (t 0oes not e/en 1eui1e an7 p1e/ious notice to the /en0ee% no1 a 3eetin5 bet6een hi3 an0 the 1e0e3ptione1% 3uch less a p1e/ious fo13al fo13al ten0e1 befo1e an7 action is be5un in cou1t to enfo1ce the 1i5ht of 1e0e3ption. (n an7 case% the lac of fun0s 6hich 3a7 1en0e1 the 1i5ht ineKcacious cannot aIect the e8istence of the 1i5ht. (n fact% the lin5 of the action itself% 6ithin the pe1io0 of 1e0e3ption% is eui/alent to a fo13al oIe1 to 1e0ee3 @see Reo/e1os /. Abel an0 San0o/al% >= O.G. !"=. An0 in this connection% a fo13al oIe1 to 1e0ee3% acco3panie0 acco3panie0 b7 a bona 0e ten0e1 of the 1e0e3ption p1ice% altho p1ope1% is not e/en essential 6he1e% as in the instant case% the 1i5ht to 1e0ee3 is e8e1cise0 th1u the lin5 of u0icial action. (n the instant case% the en 0s of ustice 6oul0 be bette1 se1/e0 b7 aIo10in5 the 1espon0ents the oppo1tunit7 to 1e0ee3 the subect p1ope1t7. This 1ulin5 is in obe0ience to the polic7 of the la6 to ai0 1athe1 than to 0efeat the 1i5ht of 1e0e3ption. @#a/ellana /. Mi1asol an0 Nune4% >: Phil. '$". ;,ERE*ORE% the petition fo1 ce1tio1a1i is +EN(E+ an0 the u053ent appeale0 f1o3 is A**(RME+. Costs a5ainst the petitione1. SO OR+ERE+.
Republic Republic of the Philippines SUPREME COURT Manila
Sec. $% Rule !& of the Rules of Cou1t% 6ithin " 0a7s f1o3 the ti3e this 0ecision beco3es nal an0 e8ecuto17.
SECON+ +((S(ON
Shoul0 appellee fail to co3plete the 1e0e3ption p1ice% the she1iI 3a7 eithe1 1elease to appellee the s3alle1 lots an0 1etu1n the enti1e 0eposit 6ithout 1eleasin5 an7 of the ! lots% as the appellee 3a7 elect.
G.R. No. L-=!"
#ul7 &% "&=!
MANUEL R. +ULA% petitione1% /s. ,ON. #U+GE GL(CER(O . CARR(AGA% #u05e of the Cou1t of *i1st (nstance of Cotabato% an0 EUSEB(O C. TANG,AL% TANG,AL% 1espon0ents. 1espon0ents. *1uctuoso S% illa1in fo1 petitione1. Mi5uel B. Alba1 fo1 p1i/ate 1espon0ent.
CONCEPC(ON #R.% #.) Petition fo1 ce1tio1a1i% 6ith p1eli3ina17 inunction% to annul an0 set asi0e the o10e1 of the 1espon0ent u05e 6hich annulle0 the 1e0e3ption of se/e1al pa1cels of lan0 le/ie0 upon an0 sol0 at an e8ecution sale. (n Ci/il Case No. " of the Cou1t of *i1st (nstance of Cotabato% an action fo1 the 1eco/e17 of a su3 of 3one7% the t1ial cou1t 1en0e1e0 1en0e1e0 a 0ecision o10e1in5 the 0efen0ant% Manuel R. +ula7% the petitione1 he1ein% to pa7 the plaintiI% Eusebio C. Tan5hal% the he1ein p1i/ate 1espon0ent% the su3 of P">!%&=:.::. P">!%&=:.::. Se/enteen @"' pa1cels of lan0 belon5in5 to the 0efen0ant 6e1e% conseuentl7% le/ie0 upon then sol0 at a public auction sale to the plaintiI% as the hi5hest bi00e1 the1eof% at p1ices p1oIe11e0 p1oIe11e0 an0 8e0 fo1 each pa1cel% fo1 the su3 of P=%&=.::. " ;ithin the 1e5le3enta17 pe1io0 fo1 1e0e3ption% the 0efen0ant 1e0ee3e0 ei5ht @= of the le/ie0 p1ope1ties b7 pa7in5 the p1ices at 6hich the7 6e1e actuall7 sol0 in the auction sale% fo1 the su3 of P"'%:"'.::% P"'%:"'.::% an0 6as issue0 a Ce1ticate of Re0e3ption. Re0e3ption. Upon 3otion of the plaintiI% ho6e/e1% the t1ial cou1t citin5 the case of +e/elop3ent Ban of the Philippines /s. +ionisio Mi1an5% ! 0ecla1e0 the 1e0e3ption as null an0 /oi0 on the 51oun0 that piece3eal 1e0e3ption is not allo6e0 b7 la6 an0 that fo1 1e0e3ption to be /ali0% the u053ent 0ebto1 shoul0 pa7 the enti1e u053ent 0ebt an0 not the pu1chase p1ice. > ,ence% this petition fo1 ce1tio1a1i 6ith p1eli3ina17 p1eli3ina17 inunction% to annul an0 set asi0e the o10e1 of the 1espon0ent u05e. As p1a7e0 fo1% the Cou1t issue0 a te3po1a17 1est1ainin5 1est1ainin5 o10e1% 1est1ainin5 the 1espon0ents f1o3 enfo1cin5 the uestione0 o10e1. The1e is 3e1it 3e1it in the petition. (n the 1e0e3ption 1e0e3ption of p1ope1ties sol0 at an e8ecution sale% the a3ount pa7able is no lon5e1 the u053ent 0ebt% but the pu1chase p1ice. (n the case of Castillo /s. Na5talon% $ the Cou1t sai0) The p1oce0u1e p1oce0u1e fo1 the 1e0e3ption 1e0e3ption of p1ope1ties p1ope1ties sol0 at e8ecution sale is p1esc1ibe0 in Sec. $% Rule !& of the Rules of Cou1t. The1eun0e1% the u053ent 0ebto1 o1 1e0e3ptione1 3a7 1e0ee3 the p1ope1t7 f1o3 the pu1chase1 6ithin " 3onths afte1 the sale% b7 pa7in5 the pu1chase1 the a3ount of his pu1chase% 6ith ( pe1 3onth inte1est the1eon up to the ti3e of 1e0e3ption% to5ethe1 6ith the ta8es pai0 b7 the pu1chase1 afte1 the pu1chase% if an7. (n othe1 6o10s% in the 1e0e3ption of p1ope1ties sol0 at an e8ecution sale% the a3ount pa7able is no lon5e1 the u053ent 0ebt but the pu1chase p1ice. Consi0e1in5 that appellee ten0e1e0 pa73ent onl7 of the su3 of P!"'.>>% 6he1eas the ! pa1cels of lan0 she 6as seein5 to 1e0ee3 6e1e sol0 fo1 the su3s of P"%>:.::% P>.:: an0 P!:.::% 1especti/el7% 1especti/el7% the afo1e3entione0 afo1e3entione0 a3ount of P!"'.>> is insuKcient to eIecti/el7 1elease the p1ope1ties. ,o6e/e1% as the ten0e1 of pa73ent 6as ti3el7 3a0e an0 in 5oo0 faith% in the inte1est of ustice ;e incline to 5i/e the appellee oppo1tunit7 to co3plete the 1e0e3ption pu1chase of the ! pa1cels as p1o/i0e0 in
The case of +BP /s. /s. Mi1an5% 1elie0 1elie0 upon b7 the 1espon0ent u05e% 6he1ein the Cou1t 1ule0 that the 3o1t5a5o1 6hose p1ope1t7 has been sol0 at public auction% eithe1 u0iciall7 o1 e8t1au0iciall7% e8t1au0iciall7% shall ha/e the 1i5ht to 1e0ee3 the p1ope1t7 b7 pa7in5 an the a3ounts o6e0 to the 3o1t5a5e on the 0ate of the sale% 6ith inte1est the1eon at the 1ate specie0 in the cont1act an0 not the a3ount fo1 6hich the p1ope1t7 6as acui1e0 at the fo1eclosu1e sale is not cont1ollin5 because of 0iIe1ent factual settin5s. The Mi1an5 case in/ol/es the 1e0e3ption of 3o1t5a5e0 p1ope1t7 sol0 at a fo1eclosu1e sale an0 the 3o1t5a5o1 6as o10e1e0 to pa7 his enti1e in0ebte0ness to the 3o1t5a5ee% plus the a51ee0 inte1ests the1eon% befo1e 1e0e3ption can be eIecte0% because the cha1te1 of the 3o1t5a5ee @+BP 1eui1e0 the pa73ent of such a3ount. The Cou1t sai0) The thi10 issue has lie6ise lie6ise been 1esol/e0 1esol/e0 b7 this Cou1t in a si3ila1 case. The issue pose0 the1e in/ol/e0 the p1ice at 6hich the 3o1t5a5o1 shoul0 1e0ee3 his p1ope1t7 afte1 the sa3e ha0 been sol0 at public auction ? 6hethe1 the a3ount fo1 6hich the p1ope1t7 6as sol0% as conten0e0 b7 the 3o1t5a5o1% o1 the balance of the loan obtaine0 f1o3 the banin5 institution% as conten0e0 b7 the 3o1t5a5ee R*C. Cite0 in that case 6as Section !" of Co3. Act No. >&% 6hich 6as the special la6 applicable e8clusi/el7 to p1ope1ties 3o1t5a5e0 6ith the R*C% as follo6s) The 3o1t5a5o1 o1 0ebto1 to the A51icultu1al an0 (n0ust1ial Ban 6hose 1eal p1ope1t7 has been sol0 at public auction% u0iciall7 o1 e8t1a-u0iciall7% e8t1a-u0iciall7% fo1 the full o1 pa1tial pa73ent of an obli5ation to sai0 Ban% shall% 6ithin one 7ea1 f1o3 the 0ate of the auction sale% ha/e the 1i5ht to 1e0ee3 the 1eal p1ope1t7 b7 pa7in5 to the Ban an the a3ount he o6e0 the latte1 on the 0ate of the sale% 6ith inte1est on the total in0ebte0ness at the 1ate a51ee0 upon in the obli5ation f1o3 sai0 0ate% unless the bi00e1 has taen 3ate1ial possession of the p1ope1t7 o1 unless this has been 0eli/e1e0 to hi3% in 6hich case the p1ocee0s of the p1ope1t7 shall co3pensate the inte1est. ... The sa3e p1o/ision p1o/ision applies in the instant instant case. The una/oi0able conclusion is that the appellant% in 1e0ee3in5 the fo1eclose0 p1ope1t7% shoul0 pa7 the enti1e a3ount he o6e0 to the Ban on the 0ate of the sale% 6ith inte1est the1eon at the 1ate a51ee0 upon. The instant case% on the othe1 han0% in/ol/es the 1e0e3ption of p1ope1t7 le/ie0 le/ie0 upon an0 sol0 at public auction to satisf7 a u053ent an0% unlie the Mi1an5 case% the1e is no cha1te1 that 1eui1es the pa73ent of su3s of 3one7 othe1 than those p1o/i0e0 fo1 in Section !: of Rule !&% Re/ise0 Rules of Cou1t. Re0e3ption Re0e3ption of p1ope1ties 3o1t5a5e0 6ith the Philippine National Ban an0 the +e/elop3ent Ban of the Philippines an0 fo1eclose0 fo1eclose0 eithe1 u0iciall7 o1 e8t1au0iciall7 a1e 5o/e1ne0 b7 special la6s 6hich p1o/i0e fo1 the pa73ent of all the a3ounts o6e0 b7 the 0ebto1. This special p1otection 5i/en to 5o/e1n3ent len0in5 institutions is not acco10e0 to u053ent c1e0ito1s in o10ina17 ci/il actions% ;,ERE*ORE% the 61it p1a7e0 fo1 is GRANTE+ GRANTE+ an0 the o10e1 issue0 on #anua17 ""% "&'= shoul0 be% as it is he1eb7% ANNULLE+ an0 SET AS(+E. The te3po1a17 1est1ainin5 o10e1 he1etofo1e issue0 is he1eb7. 3a0e pe13anent. ;ith costs a5ainst the p1i/ate 1espon0ent Eusebio C. Tan5hal. SOOR+ERE+.
Maasia1 @Chai13an% Auino% Gue11e1o% Aba0 Santos an0 Escolin% ##.% concu1. +e Cast1o% #.% is on lea/e.
Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-$::= +ece3be1 % "&= P,(L(PP(NE NAT(ONAL BAN<% petitione1% /s. T,E ,ONORABLE ,ONORABLE COURT COURT O* APPEALS AN+ +((NA +((NA AL(M% 1espon0ents. #uan #. +ia4% Bena3in Bena3in C. 0el Rosa1io Rosa1io an0 Cesa1 Basa fo1 petitione1.
ALAMPA #.) Ci/il Case No. '&' 6hich is an action fo1 Annul3ent of E8t1au0icial *o1eclosu1e an0 Sale of Real P1ope1ties an0 fo1 +a3a5es 6ith P1a7e1 fo1 P1eli3ina17 P1eli3ina17 (nunction 6as le0 on Ap1il $% "&' b7 the p1i/ate 1espon0ent he1ein a5ainst the Philippine National Ban @PNB in the Cou1t of *i1st (nstance of Que4on P1o/ince. On No/e3be1 '. "&'& a 0ecision 6as 1en0e1e0 b7 sai0 cou1t enoinin5 0efen0ant Philippine National Ban f1o3 consoli0atin5 its title o/e1 the 3o1t5a5e0 p1ope1ties an0 0i1ectin5 sai0 ban to allo6 the p1i/ate 1espon0ent% +i/ina B. Ali3% to 1e0ee3 the 3o1t5a5e0 p1ope1ties b7 acceptin5 pa73ent f1o3 the latte1 an0 0is3issin5 all the clai3s an0 counte1clai3s counte1clai3s that the pa1ties 3a7 ha/e a5ainst each othe1 in connection 6ith the case. This 0ecision 6hich 6hich 6as appeale0 b7 the 0efen0ant 0efen0ant PNB 6as aK13e0 on Ma1ch % "&= b7 the *i1st +i/ision of the Cou1t of Appeals in CA-G.R. No. $'"!"R. As succinctl7 state0 in the 0ecision of the Cou1t of Appeals% the follo6in5 3ate1ial facts a1e not 0ispute0. These appea1 to be as follo6s) follo6s) ... On *eb1ua17 % "&$= plaintiI +i/ina Ali3 obtaine0 a loan in the total a3ount of P>:%::: f1o3 f1o3 0efen0ant Philippine National Ban secu1e0 b7 th1ee @! pa1cels of lan0 1e5iste1e0 1e5iste1e0 in the na3e of he1ein plaintiI an0 co/e1e0 b7 the follo6in5 title@a T1ansfe1 Ce1ticate of Title No.=!=> of the Re5iste1 of +ee0s of Lucena Cit7 co3p1isin5 a house of st1on5 3ate1ials locate0 alon5 the National ,i5h6a7% (7a3 +ist1ict% Lucena Cit7% an0 a lot 6ith an a1ea of >: sua1e 3ete1s% 3o1e o1 less @b T1ansfe1 Ce1ticate of Title Nos. T-'&$!" an0 T'&$! of the Re5ist17 of +ee0s fo1 the P1o/ince of Que4on% containin5 an a1ea of = hecta1es each of a total of ""$ hecta1es% plante0 6ith coconut t1ees. *o1 failu1e failu1e of the plaintiI to pa7 he1 total obli5ation upon 3atu1it7 0ate% 0efen0ant Philippine National Ban e8t1au0iciall7 e8t1au0iciall7 fo1eclose0 the 3o1t5a5e p1ope1ties an0 the P1o/incial She1iI of Que4on sol0 the p1ope1ties at public auction on *eb1ua17 "% "&'!. The 0efen0ant Philippine National Ban bein5 the onl7 bi00e1 in sai0 auction sale% all the afo1e3entione0 afo1e3entione0 3o1t5a5e0 p1ope1ties 6e1e 6e1e sol0 to the ban fo1 the a3ount of P&%!:.:: P&%!:.:: 6hich 6as the total obli5ation of the plaintiI as of the 0ate of the sale. The sai0 a3ount al1ea07 inclu0e0 the p1incipal obli5ation% atto1ne7Js fees an0 othe1 cha15es% inte1ests on sai0 a3ounts plus costs of publication of the She1iIJs notice of auction sale. 9On Ap1il $% "&'% plaintiI institute0 the p1esent case fo1 the annul3ent of the afo1esai0 e8t1au0icial fo1eclosu1e an0 sale an0 fo1 0a3a5es 6ith p1a7e1 fo1 p1eli3ina17 p1eli3ina17 inunction.9 *1o3 the 0ecision 1en0e1e0 b7 the Cou1t of *i1st (nstance of Que4on P1o/ince% it can be note0 that
0u1in5 the pen0enc7 of the case in the sai0 cou1t the pa1ties atte3pte0 to confe1 6ith the en0 in /ie6 of settlin5 this case a3icabl7 an0 in the cou1se the1eof the plaintiI 0eposite0 6ith 0efen0ant ban a suKcient a3ount to co/e1 the loan an0 inte1est the1eon the1eon as of *eb1ua17 "% "&'! inclu0in5 1ei3bu1se3ent fo1 costs of publication. Thus at the p1e-t1ial% the pa1ties a51ee0 to sub3it the case fo1 0ecision onl7 upon the issue as to 6hethe1 o1 not the plaintiI shoul0 still pa7 inte1est specie0 in the 3o1t5a5e afte1 the auction sale on *eb1ua17 "% "&'!. The 0efen0ant Philippine National National Ban conten0s that the plaintiI is still obli5ate0 to pa7 the sai0 inte1est citin5 the p1o/isions of P1esi0ential +ec1ee No. $&>% as a3en0e0 b7 P1esi0ential +ec1ee No. ">'=% pa1ticula1l7 Section % pa1a51aph the1eof. On the othe1 han0% plaintiI +i/ina Ali3% the p1i/ate 1espon0ent he1ein cites the case of the +e/elop3ent Ban of the Philippines /e1sus #o/encio A. 2a1a5osa% et al.% => SCRA $$=% 6he1e it 6as the1ein 1ule0 that 6hen the fo1eclosu1e p1ocee0in5s a1e co3plete0 all inte1ests of the 3o1t5a5o1 a1e cut oI f1o3 the p1ope1t7 an0 that this p1inciple is applicable to an e8t1au0icial fo1eclosu1e. (n 1en0e1in5 the 0ecision in fa/o1 of plaintiI +i/ina Ali3% The t1ial cou1t 1easone0 out? ... (n the case at ba1% the fo1eclosu1e an0 subseuent sale of the p1ope1ties 6e1e /ali0% but because of the ti3el7 lin5 of this case an0 in /ie6 of the O10e1 of #une &% "&'% the consoli0ate0 consoli0ate0 sale coul0 coul0 not be 3a0e. (n the li5ht% the1efo1e% of the abo/e cite0 1ulin5 of the Sup1e3e Cou1t% @+BP /s. 2a1a5osa% et al.% sup1a afte1 the public auction sale on *eb1ua17 "% "&'!% the 0efen0ant Philippine National Ban can no lon5e1 0e3an0 pa73ent of inte1est on the p1ope1t7 shoul0 the 3o1t5a5o1 e8e1cise he1 1i5ht of 1e0e3ption.9 @Anne8 9B9 of Petition% Reco10 on Appeal% p. ":") pa1enthesis supplie0 This 1ulin5 6hich 6as 6as sustaine0 b7 the then Cou1t Cou1t of Appeals is no6 the subect of the Petition fo1 Re/ie6 Re/ie6 on ce1tio1a1i p1esente0 p1esente0 to this Cou1t b7 the Philippine National Ban. (n its petition% the PNB assails the 0ecision of the 0efunct appellate cou1t an0 conten0s that the inte1ests specie0 in the 3o1t5a5e shoul0 still be a00e0 to the bi0 o1 pu1chase p1ice co3pute0 f1o3 the ti3e of the auction sale up to the 0ate the 3o1t5a5e0 p1ope1ties a1e 1e0ee3e0 as clea1l7 autho1i4e0 b7 la6. Petitione1 in/oes Republic Act No. "!::% the o1i5inal Cha1te1 of the PNB% P1esi0ential +ec1ee No. $&> @"&'% Republic Act No. !!' no6n as the Gene1al Banin5 La6 an0 Rule !& of the Rules of Cou1t% all of 6hich petitione1 PNB clai3s autho1i4e the i3position of the inte1est specie0 in the 3o1t5a5e. ;hat appea1s f1o3 the case 1eco10s is that the e8t1au0icial e8t1au0icial fo1eclosu1e p1ocee0in5s institute0 b7 the PNB 6as co33ence0 on Ma7 % "&'% pu1suant to a petition fo1 sale un0e1 Act No. !"! le0 b7 its counsel 6ith the P1o/incial She1iI fo1 Que4on P1o/ince. But this PNB sou5ht the f1eclosu1e 1eclosu1e an0 sale of the p1ope1ties of the he1ein p1i/ate 1espon0ent an0 0i1ecte0 sai0 She1iI to publish the Notice of Sale in the Que4on Ti3es% Lucena Cit7. (n conseuence of sai0 petition the P1o/incial P1o/incial She1iI sol0 at public auction the p1ope1ties of he1ein p1i/ate 1espon0ent to the Philippine National Ban% upon the latte1Js bi0 of P&%!:.::. P&%!:.::. The co11espon0in5 co11espon0in5 Ce1ticate of Sale 6as e8ecute0 e8ecute0 b7 the She1iI in fa/o1 of the Philippine National Ban on *eb1ua17 "$% "&'!. Consi0e1in5 that the /e17 step initiate0 b7 the Petitione1 6as a petition fo1 Sale un0e1 Act No. !"! @Anne8 *. Co3plaint% Reco10 on Appeal% Rollo% p. $% the applicable la6 then 6oul0 be no othe1 than the sai0 statute. Act No. !"! bein5 a special la6 that
5o/e1ns pa1ticula1l7 e8t1au0icial fo1eclosu1es% it necessa1il7 e8clu0es e8clu0es the application in this instance of the Gene1al Banin5 Act an0 the p1o/isions on 1e0e3ption un0e1 the Re/ise0 Cha1te1 of PNB% P1esi0ential +ec1ee No. $&>% 6hich 6as enacte0 onl7 in "&'. (n the case at ba1 the 3o1t5a5e cont1act 6as ente1e0 into in "&$=. (n "&$=% the 5o/e1nin5 la6 on PNB ope1ations 6as Republic Act No. "!:: but it has been hel0 that 9Republic Act Act "!:: 0oes not conte3plate e8t1au0icial fo1eclosu1e9 fo1eclosu1e9 @Co /s. PNB% L"'$'% #une &% "&=% ""> SCRA =>% =. Since the applicable la6 is Act !"!% the p1o/isions of Section !:% Rule !&% Rules of Cou1t shall be 0ete13inati/e 0ete13inati/e of the sole issue p1esente0 in this case. Section $ of Act !"!% as a3en0e0 b7 Act >:"=% p1o/i0es) Sec. $. ? (n all cases in 6hich an e8t1au0icial sale is 3a0e un0e1 the special po6e1 he1einbefo1e he1einbefo1e 1efe11e0 to% the 0ebt1o% his successo1s in inte1est o1 an7 u0icial c1e0ito1 o1 u053ent c1e0ito1 of sai0 0ebto1% o1 an7 pe1son ah/in5 a lein on the p1oep1t7 subseuent to the 3o1t5a5e o1 0ee0 of t1ust un0e1 6hich the p1ope1t7 is ol0% 3a7 1e0ee3 the sa3e at an7 ti3e 6ithin the te13 of one 7ea1 f1o3 an0 afte1 the 0ate of the sale an0 such 1e0e3ption shall be 5o/e1ne0 b7 the p1o/isions of sections fou1 hun01e0 an0 si8t7-fou1% inclusi/e% of the Co0e of Ci/il P1oce0u1e% in so fa1 as these a1e not incosistent 6ith the p1o/ision of this Act. @e3phasis supplie0. Section hun01e0 si8t7-fou1 to fou1 hun01e0 si8t7-si8 inclusi/e% of the Co0e of Ci/il P1oce0u1e% P1oce0u1e% beca3e Sections &% !:% an0 !> of Rule !& of ou1 Rules of Cou1t. The sa3e secitons 6e1e 1eite1ate0 in the Re/ise0 Rules of Cou1t in #ul7 "&$> @Co /s. PNB% sup1a. Pu1suant to Section !: of Rule !&% the 1e0e3ptione1% 6ho is the p1i/ate 1espon0ent he1ein% 93a7 1e0eee3 the p1ope1t7 f1o3 the pu1chase1 at an7 ti3e 6ithin t6el/e @" 3onths afte1 the sale% on pa7in5 the p1chase1 the a3ount of his pu1chase% 6ith one pe1 centu3 pe1 3onth inte1est the1eon in a00ition% up to the ti3e of 1e0e3ption% to5ethe1e 6ith the a3ount of an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1ein afte1 pu1chase an0 inte1est on such last na3e0 a3ount at the sa3e inte1est 1ate ...9 This 6oul0 1i5htfull7 1i5htfull7 be so because% as state0 in the case of +BP /s. 2a1a5osa% sup1a% 6hen the fo1eclosu1e fo1eclosu1e p1ocee0in5s a1e co3plete0 an0 the 3o1t5a5e0 p1ope1t7 is sol0 to the pu1chase1 then all inte1est of the 3o1t5a5o1 a1e cut oI f1o3 the p1ope1t7 P1io1 to the co3pletion of the fo1eclosu1e% the 3o1t5a5o1 is liable fo1 the inte1ests on the 3o1t5a5e. ,o6e/e1% afte1 the fo1eclosu1e fo1eclosu1e p1ocee0in5s an0 the e8ecution e8ecution of the co11espon0in5 co11espon0in5 ce1ticate of sale of the p1ope1t7 sol0 at public auction in fa/o1 of the successful bi00e1% the 1e0e3ptione1 3o1t5a5o1 3o1t5a5o1 6oul0 be boun0 to pa7 onl7 fo1 the a3ount of the pu1chase p1ice 6ith inte1ests the1eon at the 1ate of one pe1 centu3 pe1 3onth in a00ition up to the ti3e of 1e0e3ption% to5ethe1 6ith the a3ount of an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1eon afte1 the pu1chase an0 inte1est on such last na3e0 a3ount at the sa3e 1ate. ;,ERE*ORE% the petition in this case is he1eb7 51ante0. The 0ecision appeale0 f1o3 is aK13e0 6ith 3o0ication% so as to 1ea0 as follo6s) @a @a Mai Main5 n5 the the 61i 61itt of p1 p1eli3 eli3in ina1 a17 7 inu inunc ncti tion on iss issue ue0 0 b7 this Cou1t in its O10e1 of #une &% "&=% pe13anent an0 i11e/ocable @b @b Allo Allo6i 6in5 n5 the the pla plain inti tiI I to to 1e0 1e0ee ee3 3 the the 3o 3o1t 1t5a 5a5e 5e0 0 p1ope1ties b7 pa7in5 the a3ount of the pu1chase 6ith inte1ests the1eon the1eon at the 1ate of one pe1 centu3 pe1 3onth up to the 0ate of he1 0eposit of the 1e0e3ption p1ice an0 o10e1in5 the 0efen0ant to accept pa73ent f1o3 the plaintiI
@c @c +is3 +is3is issi sin5 n5 all all the the clai clai3s 3s an0 an0 cou count nte1 e1cl clai ai3s 3s that the pa1ties 3a7 ha/e a5ainst each othe1 in connection 6ith this case. No costs. SO OR+ERE+.
Republic Republic of the Philippines SUPREME COURT Manila *(RST +((S(ON
G.R. No. L-&"!:
Au5ust =% "&'
+EELOPMENT +EELOPMENT BAN< O* T,E P,(L(PP(NES% plaintiIappellee% /s. +(ON(S(O M(RANG% 0efen0ant-appellant. #esus A. A/anceFa A/anceFa an0 Lualhati Lualhati Est1ella-,ila1io Est1ella-,ila1io fo1 plaintiI-appellee. Roue . +esuita0o fo1 0efen0ant-appellant.
MA% "&$! in its Ci/il Case No. !'$% an0 3o0ie0 b7 its O10e1 of #ul7 "% "&$!. (t 0i1ecte0 the 0efen0ant% no6 appellant% to pa7 the plaintiI +e/elop3ent Ban of the Philippines% no6 appellee% the su3 of P"$%:"!."! plus $ inte1est pe1 annu3 f1o3 #ul7 !:% "&' " up to the 0ate of pa73ent% but 0e0uctin5 the1ef1o3 the1ef1o3 the su3 of P!$:.:: 1ep1esentin5 1ep1esentin5 the /alue of an en5ine% 1efe11e0 to in pa1a51aph "" of the stipulation of facts. The 0efen0ant 6as lie6ise lie6ise o10e1e0 o10e1e0 to pa7 P::.:: P::.:: as atto1ne7Js fees% plus the costs of the suit. *1o3 the stipulation sub3itte0 to the t1ial cou1t it appea1s that on Septe3be1 '% "&: the appellant obtaine0 app1o/al of a loan of P">%:::.:: f1o3 the Rehabilitation *inance Co1po1ation% secu1e0 b7 a 1st 3o1t5a5e on 0efen0antJs ho3estea0% fo1 the follo6in5 pu1poses) P"%::: fo1 pu1chase of 6o1 ani3als an0 fa13 i3ple3ents P"%:: fo1 const1uction of fa13house an0 labo1e1sJ ua1te1s an0 P""%:: fo1 0e/elop3ent an0 3aintenance of "=. hecta1es of abaca lan0. The loan 6as 1elease0 1elease0 51a0uall7 to the appellant appellant up to a total of P"!%:::.::. The1eafte1 the appellee 1efuse0 to 3ae an7 fu1the1 1eleases because the plantation 6hich 6as bein5 nance0 6as attace0 b7 3osaic 0isease% 6hich 0est1o7e0 the abaca plants. The appellant% on his pa1t% faile0 to pa7 the 7ea1l7 a3o1ti4ations so in acco10ance 6ith the te13s of the p1o3isso17 p1o3isso17 notes he ha0 si5ne0 an0 the 3o1t5a5e cont1act itself% the p1o/incial she1iI of +a/ao% upon 1euest of the appellee% fo1eclose0 the 3o1t5a5e e8t1au0iciall7 un0e1 the p1o/isions of Act !"!% as a3en0e0% an0 sol0 the 3o1t5a5e0 p1ope1t7 at public auction on #ul7 !:% "&'. B7 that ti3e the appellantJs in0ebte0ness% inclu0in5 inte1est% ha0 1eache0 P"&%'">.!% P"&%'">.!% besi0es the e8penses of the auction sale an0 1e5ist1ation fees% 6hich a3ounte0 to P":".::. The appellee% as the hi5hest bi00e1 fo1 P%:":.::% acui1e0 o6ne1ship of the 3o1t5a5e0 p1ope1t7. p1ope1t7. The appellant 6as 0ul7 a0/ise0 of the sale% 6ith the info13ation info13ation that the sa3e 6as subect to his 1i5ht of 1e0e3ption 6ithin one 7ea1 f1o3 #ul7 !:% "&'. This 1i5ht he ha0 not e8e1cise0 e8e1cise0 6hen the co3plaint 6as le0 b7 the appellee on Ma7 &% "&$. (n his b1ief the appellant assi5ns /e @ e11o1s% 6hich 3a7 be con0ense0 into the follo6in5 issues)
@" @" ;het ;hethe he11 o1 o1 not not the the c1 c1e0it e0ito1 o1 +e/e +e/elo lop3 p3en entt Ban Ban of the Philippines has a 1i5ht to 1eco/e1 the balance of the in0ebte0ness afte1 the 3o1t5a5e0 p1ope1t7 6as sol0 fo1 less than the a3ount the1eof un0e1 e8t1au0icial fo1eclosu1e pu1suant to Act !"!% as a3en0e0) @ @ ;het ;hethe he11 o1 o1 not not the the 0eb 0ebto to1% 1% appe appell llan antt Mi1 Mi1an an5% 5% 3a7 be e8e3pte0 f1o3 pa7in5 the loan on the 51oun0 that it ha0 been 51ante0 to hi3 fo1 the pu1pose of 0e/elopin5 his ho3estea0 b7 plantin5 it to abaca% an0 that sai0 abaca 6as 0est1o7e0 b7 3osaic 0isease o1% failin5 that% 6hethe1 o1 not his obli5ation 3a7 be 1e0uce0 b7 this Cou1t an0 @! @! ;he ;hethe the1 o1 o1 no not the the 3o 3o1t 1t5a 5a5e 5e 0ebt 0ebto o1 6ho 6ho 6ishes to 1epu1chase his ho3estea0 shoul0 pa7 the1efo1 onl7 the p1ice pai0 b7 the pu1chase1 at the auction sale% o1 the total obli5ation incu11e0 b7 hi3 an0 still outstan0in5. On the 1st issue% the appellant conten0s that because the 3o1t5a5e 6as e8t1au0iciall7 fo1eclose0 fo1eclose0 an0 sol0 at less than the 3o1t5a5e 0ebt un0 e1 Act !"! the appellee is not entitle0 to 1eco/e1 the 0ecienc7 because neithe1 this Act% as a3en0e0% no1 the 3o1t5a5e cont1act itself% contains an7 p1o/ision 5i/in5 such 1i5ht to the 3o1t5a5ee. The sa3e uestion has been settle0 settle0 b7 this Cou1t in the case of Philippine Ban of Co33e1ce /s. To3as 0e e1a% ! 6he1e ;e hel0) The sole issue to be 1esol/e0 1esol/e0 in this case case is 6hethe1 the t1ial Cou1t acte0 co11ectl7 co11ectl7 in hol0in5 appellee Ban entitle0 to 1eco/e1 f1o3 appellant the su3 of P&&%:!!.: as 0ecienc7 a1isin5 afte1 the e8t1au0icial e8t1au0icial fo1eclosu1e% fo1eclosu1e% un0e1 Act No. !"!% as a3en0e0% of the 3o1t5a5e0 p1ope1ties in uestion. (t is u15e0% on appellantJs pa1t% that since Act No. !"!% as a3en0e0% is silent as to the 3o1t5a5eeJs 1i5ht to 1eco/e1 0ecienc7 a1isin5 afte1 an e8t1au0icial fo1eclosu1e sale of 3o1t5a5e% he @Mo1t5a5ee 3a7 not 1eco/e1 the sa3e. A 1ea0in5 of the p1o/isions p1o/isions of Act No. !"!% as a3en0e0% @1e e8t1au0icial e8t1au0icial fo1eclosu1e fo1eclosu1e 0iscloses nothin5% it is t1ue% as to 3o1t5a5eeJs 1i5ht to 1eco/e1 such 0ecienc7. But neithe1 0o 6e n0 an7 p1o/ision the1eun0e1 6hich e8p1essl7 o1 i3plie0l7 p1ohibits such 1eco/e17. A1ticle "!" of the ne6 Ci/il Co0e% on the cont1a17% e8p1essl7 p1o/i0es that JThe fo13% e8tent an0 conseuences of a 3o1t5a5e% both as to its constitution% 3o0ication an0 e8tin5uish3ent% an0 as to othe1 3atte1s not inclu0e0 in this Chapte1% shall be 5o/e1ne0 b7 the p1o/isions of the Mo1t5a5e La6 an0 of the Lan0 Re5ist1ation Re5ist1ation La6.J La6.J Un0e1 th e Mo1t5a5e La6% 6hich is still in fo1ce% the 3o1t5a5ee has the 1i5ht to clai3 fo1 the 0ecienc7 1esultin5 f1o3 the p1ice obtaine0 in the sale of the 1eal p1ope1t7 p1ope1t7 at public auction an0 the outstan0in5 obli5ation at the ti3e of the fo1eclosu1e p1ocee0in5s. @See So1iano /s. En1iue4% > Phil. => Banco 0e las (slas *ilipinas /s. Concepcion e ,ios% ! Phil. =:$ Banco Nacional /s. Ba11eto% ! Phil. &. Un0e1 the Rules of Cou1t @Section $% Rule ': W % JUpon the sale of p1ope1t7% un0e1 an o10e1 fo1 a sale to satisf7 a 3o1t5a5e o1 othe1 incu3b1ance the1eon% if the1e be a balance 0ue to the plaintiI afte1 appl7in5 the p1ocee0s of the sale% the Cou1t% upon 3otion% shoul0 1en0e1 a u053ent a5ainst the 0efen0ant fo1 an7 such balance fo1 6hich% b7 the 1eco10 1eco10 of the case% he 3a7 be pe1sonall7 liable to the plaintiI% ....J (t is t1ue that this 1efe1s to a u0icial fo1eclosu1e% fo1eclosu1e% but the un0e1l7in5 p1inciple is the sa3e% that the 3o1t5a5e is but a secu1it7 an0 not a satisfaction of in0ebte0ness. Appellant in/ites the attention of this Cou1t to the ne6 p1o/isions p1o/isions of the Ci/il Co0e on ple05e% pa1ticula1l7 A1ticle ""% 6hich p1o/i0es)
The sale of the thin5 ple05e0 ple05e0 shall e8tin5uish the p1incipal obli5ation% 6hethe1 o1 not the p1ocee0s of the sale a1e eual to the a3ount of the p1incipal obli5ation% inte1est an0 e8penses in a p1ope1 case. ... (f the p1ice of the sale is less% neithe1 shall the c1e0ito1 be entitle0 to the 0ecienc7% not6ithstan0in5 an7 stipulation to the cont1a17. cont1a17. as 6ell as to the fact that in chattel 3o1t5a5e un0e1 A1t. ">=>% pa1a51aph !% the c1e0ito1 shall ha/e no fu1the1 action to 1eco/e1 an7 unpai0 balance if he has chosen to fo1eclose the chattel 3o1t5a5e. These p1o/isions% p1o/isions% fa1 f1o3 suppo1tin5 the appellantJs stan0% 3ilitate a5ainst it% because the7 sho6 that 6hen the Le5islatu1e Le5islatu1e inten0s to ba1 o1 occlu0e a c1e0ito1 f1o3 f1o3 suin5 fo1 an7 0ecienc7 afte1 fo1eclosin5 an0 sellin5 the secu1it7 5i/en fo1 the obli5ation% it 3aes e8p1ess p1o/ision p1o/ision to that eIect. (n the sa3e case of Philippine Ban of Co33e1ce /s. +e e1a% sup1a% this Cou1t sai0 ap1opos) (t is then clea1 that in the absence of a si3ila1 p1o/ision in Act !"!% as a3en0e0% it cannot be conclu0e0 that the c1e0ito1 loses his 1i5ht 5i/en hi3 un0e1 the Mo1t5a5e La6 an0 1eco5ni4e0 in the Rules of Cou1t% to tae action fo1 the 1eco/e17 of an7 unpai0 balance on the p1incipal obli5ation% si3pl7 because he has chosen to fo1eclose his 3o1t5a5e e8t1a-u0iciall7% e8t1a-u0iciall7% pu1suant to a special po6e1 of atto1ne7 5i/en hi3 b7 the 3o1t5a5o1 in the 3o1t5a5e cont1act. As state0 b7 this Cou1t in Me0ina /s. Philippine National Ban @$ Phil. $"% a case analo5ous to the one at ba1% the step taen b7 the 3o1t5a5ee-ban in 1eso1tin5 to e8t1a-u0icial e8t1a-u0icial fo1eclosu1e un0e1 Act No. !"!% 6as J3e1el7 to n0 a p1ocee0in5 fo1 the sale% an0 its action cannot be taen to 3ean a 6ai/e1 of its 1i5ht to 0e3an0 the pa73ent of the 6hole 0ebt.J On the secon0 issue the appellant ass that if he cannot be co3pletel7 absol/e0 he shoul0 at least be 5i/en a 1e0uction of his in0ebte0ness because of his inabilit7 to 1eali4e an7 inco3e f1o3 the abaca he plante0. ,is p1e0ica3ent 3a7 e/oe s73path7% but it 0oes not ustif7 a 0is1e5a10 of the te13s of the cont1act he ente1e0 into. ,is obli5ation the1eun0e1 is neithe1 con0itional no1 aleato17 its te13s a1e clea1 an0 subect to no e8ception. e8ception. The thi10 issue has lie6ise lie6ise been 1esol/e0 1esol/e0 b7 this Cou1t in a si3ila1 case. > The issue pose0 the1e in/ol/e0 the p1ice at 6hich the 3o1t5a5o1 shoul0 1e0ee3 his p1ope1t7 afte1 afte1 the sa3e ha0 been sol0 at public auction 6hethe1 the a3ount fo1 6hich the p1ope1t7 6as sol0% as conten0e0 b7 the 3o1t5a5o1% o1 the balance of the loan obtaine0 f1o3 the banin5 institution% as conten0e0 b7 the 3o1t5a5ee R*C. Cite0 in that case 6as Section !" of Co3. Act No. >&% 6hich 6as the special la6 applicable e8clusi/el7 to p1ope1ties 3o1t5a5e0 6ith the R*C% as follo6s) The 3o1t5a5o1 o1 0ebto1 0ebto1 to the A51icultu1al A51icultu1al an0 (n0ust1ial Ban W % 6hose 1eal p1ope1t7 has been sol0 at public auction% u0iciall7 o1 e8t1a-u0iciall7% e8t1a-u0iciall7% fo1 the full o1 pa1tial pa73ent of an obli5ation to sai0 Ban% shall% 6ithin one 7ea1 f1o3 the 0ate of the auction sale% ha/e the 1i5ht to 1e0ee3 the 1eal p1ope1t7 b7 pa7in5 to the Ban all the a3ount he o6e0 the latte1 on the 0ate of the sale% 6ith inte1est on the total in0ebte0ness at the 1ate a51ee0 upon in the obli5ation f1o3 sai0 0ate% unless the bi00e1 has taen 3ate1ial possession of the p1ope1t7 o1 unless this has been 0eli/e1e0 to hi3% in 6hich case the p1ocee0s of the p1ope1t7 shall co3pensate the inte1est. ... The sa3e p1o/ision p1o/ision applies in the instant instant case. The una/oi0able conclusion is that the appellant% in 1e0ee3in5 the fo1eclose0 p1ope1t7% shoul0 pa7 the enti1e a3ount he o6e0 to the Ban on the 0ate of the sale% 6ith inte1est the1eon at the 1ate a51ee0 upon. ;,ERE*ORE% the 0ecision appeale0 f1o3 is aK13e0% 6ith costs.
Teehanee% Teehanee% Es5ue11a Es5ue11a an0 MuFo4 Pal3a% Pal3a% ##.% concu1. concu1.
Republic Republic of the Philippines SUPREME COURT Manila SECON+ +((S(ON G.R. No. L-"'$'
#une &% "&=
LET(C(A CO% assiste0 b7 he1 husban0 MU( U<
BARRE+O% #) +i1ect appeal to this Sup1e3e Cou1t pu1suant to Republic Act >>: f1o3 the 0ecision of the Cou1t of *i1st (nstance of Ri4al% B1anch ( in its Ci/il Case No. !":" entitle0 9Cita0el (nsu1ance X Su1et7 Co.% (nc. /s. Philippine National Ban9% the 0ispositi/e po1tion of 6hich 1ea0s) ;,ERE*ORE% this Cou1t n0s that plaintiI has /ali0l7 e8e1cise0 the 1i5ht of 1e0e3ption he1ein-befo1e 0iscusse0 an0 o10e1s the 0efen0ant to) @a @a Accep cceptt the the a3 a3ou ount nt cons consi5 i5ne ne0 0 an0 an0 0epo 0eposi site te0 0 pu1suant to the O10e1 of this Cou1t on Ma1ch ""% "&'$ @b @b E8ec E8ecut ute ea an0 n0 spec speci ica call ll7 7 co3 co3pl pl7 7 to to the the eIec eIects ts of the e8e1cise of the 1i5ht of 1e0e3ption so that 6hate/e1 title is 0ue to the plaintiI afte1 1e0e3ption 3a7 p1ope1l7 acc1ue to plaintiI @c @c +eli +eli/e /e11 an0 an0 su1 su111en0e en0e11 to to pla plain inti tiI I pos posse sess ssio ion n o/e1 the p1ope1t7 in uestion. Consi0e1in5 that this case has been sub3itte0 fo1 0ecision base0 upon fou1 @> li3ite0 uestions of la6 an0 the1e bein5 no e/i0ence p1esente0 an0 sub3itte0 to suppo1t an7 clai3 fo1 0a3a5es% the1e is no p1onounce3ent an0 a6a10 of 0a3a5es as 6ell as costs. SO OR+ERE+. @Pp. "=:-"="% Reco10 on Appeal. (t 5oes 6ithout sa7in5 that un0e1 the Act afo1e3entione0 afo1e3entione0 b7 /i1tue of 6hich this appeal is befo1e Us% the issues ;e a1e calle0 upon to 1esol/e a1e onl7 uestions of la6. B1ie7 state0% the un0ispute0 3ate1ial facts of this case% as 3a7 be culle0 f1o3 the 0ecision of the t1ial cou1t an0 else6he1e in the 1eco10% a1e as follo6s) On No/e3be1 ":% "&$"% the Stan0a10 Pa1ts Manufactu1in5 Co1po1ation% he1einafte1 to be 1efe11e0 to si3pl7 as STAN+AR+% e8ecute0 a 1eal estate 3o1t5a5e in fa/o1 of he1ein 0efen0ant-appellant Philippine National Ban% he1einafte1 to be 1efe11e0 to si3pl7 as PNB% o/e1 p1ope1ties co/e1e0 b7 T1ansfe1 Ce1ticates of Title Nos. T-":= an0 T-!:% both situate0 in Ba5uio Cit7% as collate1al fo1 a loan consi0e1ation of P::%:::.::. On *eb1ua17 :% "&$!% the sa3e 0ebto1 co1po1ation e8ecute0 e8ecute0 an a3en0e0 1eal estate 3o1t5a5e to inclu0e as collate1al fo1 the inc1ease of the abo/e loan to P"%:::%:::.:: P"%:::%:::.:: a p1ope1t7 locate0 at Pason5 Ta3o E8tension 6ithin the Municipalit7 of Maati @then pa1t of Ri4al P1o/ince P1o/ince an0 no6 of Met1o Manila co/e1e0 b7 T1ansfe1 Ce1ticate of Title No. No. >>'>. A00itionall7% A00itionall7% on *eb1ua17 *eb1ua17 :% "&$!% "&$!% the sa3e co1po1ation e8ecute0 e8ecute0 in fa/o1 of PNB a chattel 3o1t5a5e of its pe1sonal p1ope1ties liste0 on pa5es &$ to ":= of the Reco10 on Appeal. On pa5es $-' of appellantJs b1ief it is state0 that as of #ul7 "&% "&'>% the 9bo11o6e0 loan9 of STAN+AR+ totalle0 P>%&$%=:!.$% an0 that the sai0 obli5ation 6as secu1e0% as afo1e3entione0% afo1e3entione0% b7 the 3o1t5a5es on the Ba5uio an0
Maati 1eal estates of STAN+AR+ an0 the chattel 3o1t5a5e on its pe1sonal p1ope1ties abo/e 1efe11e0 to. ;hen STAN+AR+ STAN+AR+ faile0 to pa7 its obli5ation% PNB e8t1au0iciall7 e8t1au0iciall7 fo1eclose0 the 3o1t5a5e on the Ba5uio p1ope1ties as 6ell as the chattel 3o1t5a5e on #ul7 "&% "&'>% 6ith PNB as the hi5hest bi00e1 fo1 P"%">%!:.::. P"%">%!:.::. Subseuentl7% on Au5ust =% "&'>% PNB also fo1eclose0 the 3o1t5a5e on the Maati p1ope1t7 an0 pu1chase0 the sa3e% as hi5hest bi00e1% fo1 P"%!$!%:::.::. ;e uote fu1the1 f1o3 appellantJs b1ief) ;hen Stan0a10 Pa1ts faile0 to pa7 its obli5ation% PNB fo1eclose0 fo1eclose0 the Ba5uio p1ope1ties an0 chattels on #ul7 "&% "&'> 6ith it as the hi5hest bi00e1 fo1 P"%">%!:.:: an0 the Pason5 Ta3o p1ope1t7 on Au5ust =% "&'> also 6ith it as the hi5hest bi00e1 fo1 P"%!$!%:::.::. P"%!$!%:::.::. ,ence% afte1 fo1eclosu1e fo1eclosu1e of the abo/e3entione0 3o1t5a5e% the 0ecienc7 clai3 of the Ban a5ainst Stan0a10 Pa1ts as of Au5ust =% "&'> a3ounte0 to P"%>!>%".:'. Subseuentl7% a Ce1ticate of Sale 0ate0 #ul7 "&% "&'> 6as issue0 b7 the She1iI of Ba5uio Cit7 co/e1in5 TCT Nos. T-':= an0 T-!: @Anne8 9C9% P.S.*.. A Ce1ticate of Sale 0ate0 Au5ust =% "&'> co/e1in5 TCT TCT No. >>'> 6as also issue0 b7 the She1iI Sh e1iI of Ri4al @Anne8 9+9% P.S.*. an0 1e5iste1e0 on Ma1ch ">% "&'$ in the Re5ist17 of +ee0s. Upon failu1e of Stan0a10 Pa1ts to 1e0ee3 the fo1eclose0 p1ope1ties 6ithin the 1e5le3enta17 pe1io0% the PNB consoli0ate0 titles to the Ba5uio p1ope1ties an0 TCT Nos. $:=: an0 $:=" @Anne8es 9E9 an0 9E-"9% 1especti/el7% P.S.*. 6e1e issue0 b7 the Re5iste1 of +ee0s of Ba5uio Cit7 on Ma7 % "&'$ in the na3e of the Ban. On Ma7 ">% "&'$% TCT No. >>'> 6as cancelle0 an0 TCT No. S-="!! issue0 in the na3e of the PNB. Meanti3e% on Ma1ch % "&'$% Cita0el 61ote PNB a lette1 @Anne8 9,9% P.S.*. statin5 the1ein its 0esi1e to 1e0ee3 the p1ope1t7 co/e1e0 b7 TCT No. >>'>% it bein5 the alle5e0 assi5nee of the 1i5ht of 1e0e3ption of Stan0a10 Pa1ts 6ith 1espect onl7 to sai0 p1ope1t7. Cita0el% ho6e/e1% oIe1e0 to 1e0ee3 the p1ope1t7 fo1 onl7 P"%$"%&':.::. P"%$"%&':.::. (n its 1epl7 to sai0 lette1% PNB% in a lette1 0ate0 Ma1ch % "&'$ @Anne8 9(9% P.S.*.% ustiabl7 1efuse0 to accept the ten0e1 of pa73ent of Cita0el consi0e1in5 that the a3ount of P"%$"%&':.:: 6as /e17 3uch lo6e1 than the BanJs total a3ount of P!%!$$%>$.> P!%!$$%>$.> as of Ma1ch % "&'$ pe1 the State3ent of Account of Stan0a10 Pa1ts @Anne8 9G9% P.S.*.. @Pp. '&% B1ief of PNB To To Ou1 3in0 then% the facts that that a1e 0ecisi/e 0ecisi/e he1ein a1e a1e the follo6in5) ". The 3o1t5a5es 5es he he1e in u uestion 6e 6e1e constitute0 6a7 bac in "&$" to "&$!. . The The fo1 fo1eclo eclosu su1e 1e sale sale of the the Ba5u Ba5uio io p1op p1ope1 e1ti ties es an0 the chattels too place on #ul7 "&% "&'> an0 that of the Maati estate on Au5ust =% "&'>. !. Cita Cita0e 0ell (nsu (nsu1a 1anc nce e X Su1 Su1et7 et7 Co.% Co.% (nc. (nc. @C(T @C(TA+ A+EL EL%% fo1 sho1t to 6ho3 STAN+AR+ ha0 in the 3ean6hile @o1 on *eb1ua17 :% "&'$ t1ansfe11e0 its 1i5hts in the 3o1t5a5es he1e in issue% 61ote PNB on Ma1ch % "&'$ statin5 that it 6as 1e0ee3in5 the Maati p1ope1t7% oIe1in5 to pa7 the1efo1 as 1e0e3ption p1ice P"%$"%&':.::. The lette1 of C(TA+EL in this 1e5a10 1ea0s thus) C(TA+EL (NSURANCE X SURET CO.% (NC. Suite : Siatuna Bl05.% A7ala A/e. Maati% Ri4al Tel. Tel. No. ='-!!-:' ='-!!-:' X ='-!>->> ='-!>->> Ma1ch % "&'$ P,(L(PP(NE NAT(ONAL BAN< Escolta% Manila
Re) Le5al Re0e3ption of E8t1a-#u0icial *o1eclose0 P1ope1t7 of Stan0a10 Pa1ts Manufactu1in5 Co1po1ation Un0e1 Act No. !"!% As a3en0e0 Gentle3en) (n connection 6ith the abo/e-3entione0 p1ope1t7 6hich is co/e1e0 b7 TCT No. >>'> of the Re5iste1 of +ee0s *o1 the P1o/ince of Ri4al 6e 6ish to info13 7ou that the C(TA+EL (NSURANCE X SURET CO.% (NC.% is the Assi5nee of the 1i5ht of 1e0e3ption% 6hich 6ill e8pi1e on Ma1ch ""% "&'$% b7 /i1tue of a 9+ee0 of Assi5n3ent an0 ;ai/e1 of Re0e3ption Ri5hts9 0ate0 *eb1ua17 &% "&'$% photostat cop7 of 6hich is attache0 to this lette1 as Anne8 9A9. As assi5nee of the afo1e3entione0 afo1e3entione0 Ri5ht of Re0e3ption% ou1 Co3pan7 is no6 e8e1cisin5 the sa3e b7 ten0e1in5 to 7ou the 1e0e3ption p1ice co3pute0 as follo6s) P"%!$!%:::.:: P"%!$!%:::.:: ? total bi0 of the PNB pe1 its lette1 to the She1iI 0ate0 Au5ust =% "&'> P =%&':.:: ? inte1est inte1est at the 1ate of " a 3onth f1o3 the 0ate of auction% Au5ust =% "&'>% up to the ti3e of 1e0e3ption P"%$"%&':.:: ? TOTAL as e/i0ence0 b7 RCBC Mana5e1Js Chec No. MC "&>"== 0ate0 Ma1ch >% "&'$% 6hich is attache0 to this lette1 as Anne8 9B9. (n /ie6 of the fo1e5oin5% in0l7 acno6le05e the 1eceipt of the 1e0e3ption a3ount an0 cause the issuance of the co11espon0in5 co11espon0in5 Ce1ticate of Re0e3ption in fa/o1 of ou1 Co3pan7. Than 7ou. e17 t1ul7 7ou1s%
An01es L. Af1ica o1 Asst. ice P1es. Raul Le/e1i4a on Mon0a7 Ma1ch =%"&'$. e17 t1ul7 7ou1s% @S50. ARTEM(O S. T(PON Senio1 Supe1/isin5 Att7. @Pp. "!!-"!>% Reco10 on Appeal. . The The Ce Ce1ti 1tica cate te of Sal Sale e 0a 0ate0 te0 Au5 Au5us ustt =% =% "& "&'> co/e1in5 TCT No. >>'> 6as issue0 b7 the She1iI of Ri4al an0 1e5iste1e0 on Ma1ch ">% "&'$ in the Re5ist17 of +ee0s. @Pa5e =% PNBJs b1ief Notabl7% ho6e/e1% acco10in5 to the 0ecision of the t1ial cou1t% the ce1ticate of sale 6as 1e5iste1e0 on Ma1ch ""% "&'$. @Pa5e "'$% Reco10 on Appeal. $. On Ma1 Ma1ch ch ""% "& "&'$% C( C(TA+EL le le0 the the insta nstant nt action in the cou1t belo6 6ith the follo6in5 p1a7e1) p1a7e1) PRAER ;,ERE*ORE% it is 1espectfull7 p1a7e0 that upon the lin5 of this co3plaint this ,ono1able Cou1t fo1th6ith issue an o10e1 autho1i4in5 its B1anch Cle1 to accept a Mana5e1Js Chec in the a3ount of P"%$"%&':.:: an0 0eposit the sa3e 6ith the Ri4al Co33e1cial Banin5 Co1po1ation un0e1 a Sa/in5s Account in o10e1 that the sa3e shall not 1e3ain (0le% an0 in the na3e% of 0efen0ant PNB% subect to the cont1ol an0 0isposition of this ,ono1able Cou1t an0 afte1 hea1in5% u053ent be 1en0e1e0 @a @a O10e O10e1i 1in5 n5 0efe 0efen0 n0an antt to to acc accep eptt the the a3 a3ou ount nt so 0eposite0% an0Ho1 such a3ount as 3a7 be foun0 b7 this ,ono1able Cou1t to be the la6ful 1e0e3ption p1ice fo1 the pa1ticula1 p1ope1t7 in uestion @b @b O10e O10e1i 1in5 n5 0efe 0efen0 n0an antt to to tu1 tu1n n o/e o/e11 the the titl title ea an0 n0 possession of the p1ope1t7 in uestion to plaintiI to5ethe1 6ith its f1uits f1o3 Ma1ch ""% "&'$ up to the ti3e possession is actuall7 su11en0e1e0 to the plaintiI% plus the inte1ests the1eon counte0 f1o3 the 0ate of lin5 of this co3plaint
@S50. *RANC(SCO S. CORPUS P1esi0ent Att7.) aHs @Pa5es "!"-"!!% Reco10 on Appeal >. (33e (33e0i 0iat atel el7 7 o1 o1 on on e/ e/en 0ate 0ate PNB PNB 1e 1eecte ecte0 0 the the abo/e ten0e1% conten0in5 that the oIe1e0 p1ice 6as 3uch lo6e1 than P!%!$$%>$.>% " as of sai0 0ate Ma1ch % "&'$% 6hich PNB 3aintaine0 6as th e co11ect 1e0e3ption p1ice. The follo6in5 6as the 1epl7 of PNB)
@c @c O10e O10e1i 1in5 n5 0efe 0efen0 n0an antt to to e8 e8ecut ecute e suc such h 0oc 0ocu3 u3en ents ts an0 pape1s that 3a7 be necessa17 fo1 the t1ansfe1 of the title an0 possession of the p1ope1t7 in uestion to plaintiI @0 @0 O10e O10e1i 1in5 n5 0efe 0efen0 n0an antt to to pa7 pa7 plai plaint ntiI iI 0a3a 0a3a5e 5es s in in the fo13 of atto1ne7Js fees an0 e8penses of liti5ation% the a3ount of 6hich is left to the soun0 0isc1etion of this ,ono1able Cou1t @e @e
P,(L(PP(NE NAT(ONAL BAN< LEGAL +EPARTMENT Ma1ch % "&'$ M1. *1ancisco S. Co1pus P1esi0ent Cita0el (nsu1ance X Su1et7 Co.% (nc. : Siatuna Bl05.% A7ala A/e. Maati% Ri4al +ea1 M1. Co1pus) This 1efe1s 1efe1s to 7ou1 lette1 of Ma1ch % "&'$ "&'$ 6he1ein 6he1ein 7ou e8p1esse0 7ou1 0esi1e to 1e0ee3 the p1ope1t7 co/e1e0 b7 TCT No. >>'> of the Re5iste1 of +ee0s of Ri4al 6hich 6e acui1e0 f1o3 Stan0a10 Pa1ts Manufactu1in5 Co1p. in the a3ount of P"%$"%&':.:: in the fo13 of RCBC Mana5e1Js Chec No. MC "&>"== 0ate0 Ma1ch >% "&'$. ;e feel that the Le5al +epa1t3ent is in no position to 0eci0e the acceptance of 7ou1 oIe1 because it appea1s that the a3ount oIe1e0 is less than ou1 total clai3. ;e su55est% the1efo1e% that 7ou see eithe1 ice P1esi0ent
O10e O10e1i 1in5 n5 the the 0ef 0efen en0a 0ant nt to pa7 pa7 the the cost costs s of of sui suit. t.
PLA(NT(** *URT,ER PRAS fo1 such othe1 1elief as 3a7 be foun0 ust an0 euitable in the p1e3ises. @Pp. $-=% Reco10 on Appeal. '. The The1e is is no no 0i 0isput spute e tha thatt a 3ana ana5e1 5e1Js chec hec of of the Ri4al Co33e1cial Banin5 Co1po1ation No. MC "&>"== 0ate0 Ma1ch Ma1ch >% "&'$ an0 in the a3ount of P"%$"%&':.:: @Pp. ">-"% Reco10 on Appeal acco3panie0 the co3plaint an0 6as actuall7 0eposite0 un0e1 a sa/in5s account 6ith the sa3e ban b7 o10e1 of the t1ial cou1t of the sa3e 0ate 9in the na3e of the PNB subect to the cont1ol an0 0isposition of the Cou1t.9 @p. :% Reco10 on Appeal. (n the li5ht of the fo1e5oin5 facts% the pa1ties stipulate0 in the pa1tial stipulation facts the7 sub3itte0 to the t1ial cou1t that) B.
Li3itation of issues
The pa1ties a51ee0 a51ee0 that the issues 1aise0 b7 the plea0in5s a1e one of la6% to 6it) ".
;he ;hethe the1 the the 1e0e3 e0e3pt ptio ion n pe pe1io0 io0 has has e8pi 8pi1e0.
. ;hat is is th the co co11ect 1e 1e0e3ption a3 a3ount 1eui1e0 1eui1e0 un0e1 the la6V !. ;heth hethe1 e1 the1 the1e e6 6a as a /ali ali0 an0 an0 eIec eIecti ti/ /e ten ten0e 0e11 of pa73ent. >. ;heth hethe1 e1 the the +ee0 ee0 of Assi5 ssi5n3 n3en entt is bin0 bin0iin5 an0 enfo1ceable a5ainst .
0efe 0efen0 n0an antt PNB PNB.. @P @P. " ""% Rec Reco o10 on on App Appe eal al
Ti3eliness Ti3eliness of the 1e0e3ption 1e0e3ption To To be su1e% ;e ;e n0 the opposin5 postu1es postu1es of the pa1ties on the ti3eliness of the 1e0e3ption he1e in uestion a little blu11e0 blu11e0 an0 confusin5. So% 1athe1 than to t17 to e8t1icate Ou1sel/es Ou1sel/es out of such 3a4e% ;e feel it is suKcient to point out that acco10in5 to the b1ief of appellant% the fo1eclosu1e sale of the subect p1ope1t7 6as 3a0e on Au5ust =% "&'> @pp. '-= an0 the co11espon0in5 co11espon0in5 ce1ticate of sale 6as issue0 b7 she1iI on the sa3e 0a7 an0 91e5iste1e0 91e5iste1e0 on Ma1ch ">% "&'$ in the Re5iste1 of +ee0s.9 @p. =% Reco10 Reco10 on Appeal. 9On Ma7 ">% "&'$ TCT >>'> 6as cancelle0 an0 TCT No. S="!! issue0 in the na3e of PNB9. @i0. (n such a3bi5uous p1e3ises% ;e ha/e no alte1nati/e than to use Ma1ch ""% "&' ! as point of 1efe1ence 1e5a10in5 1e5a10in5 the 0ate of the 1e5ist1ation 1e5ist1ation of the ce1ticate of sale. Appellant assu3es that on this basis the pe1io0 of 1e0e3ption 6as up to Ma1ch ":% "&'$. ;ell% the t1uth of the 3atte1 is that this 0etail is tie0 up ine8t1icabl7 ine8t1icabl7 to the 3ain uestion of la6 that pe1/a0es the 6hole of this cont1o/e1s7. ;hat is the la6 applicable to this case as to the pe1io0 of 1e0e3ptionV Let us not fo15et that the 3o1t5a5e at issue 6as e8ecute0 in "&$!. T1ue it is that as un0e1sco1e0 b7 counsel fo1 PNB% STAN+AR+% the p1e0ecesso1-ininte1est of C(TA+EL% C(TA+EL% 6ho si5ne0 the 0ee0 of 3o1t5a5e a51ee0% an0 C(TA+EL C(TA+EL is boun0 b7 such a51ee3ent% 9to abi0e an0 to be boun0 b7 the p1o/isions of the Cha1te1 of the PNB 9. Specicall7 pa1a51aph @5 of sai0 1eal estate 3o1t5a5e p1o/i0es) p1o/i0es) @5 @5 The The 3o1 3o1t5 t5a5 a5o1 o1 he1 he1eb7 eb7 6ai 6ai/e /es s the the 1i5h 1i5htt 51a 51ant nte0 e0 hi3 un0e1 Section ""& of Co33on6ealth Act No. ">"% no6n as the Public Lan0 Act% as a3en0e0 an0 a51ees to abi0e to be boun0 b7 the p1o/isions of Act No. !"! o1 Act No. &!!% 6hich a3en0e0 Act No. "$"% o1 Republic Act No. "!::% as a3en0e0% no6n as the Ne6 Cha1te1.9 @Pa5e "% PNBJs B1ief. Goin5 b7 the lite1al te13s of this uote0 p1o/ision% p1o/ision% STAN+AR+HC(TA+EL stan0 boun0 b7 the sa3e. (n othe1 6o10s% pa1a51aph @5 of the 3o1t5a5e cont1act 3a0e the p1o/isions of Act No. !"! o1 Act &!!% 6hich a3en0e0 Act No. "$"% o1 Republic Act "!::% as a3en0e0% no6n as the ne6 Cha1te1 pa1t an0 pa1cel of the 3o1t5a5e cont1act. No6% 6hat is the le5al i3po1t o1 conseuence of such e8p1ess inco1po1ation of an0 sub3ission to Act !"! an0 Republic Act "!:: b7 STAN+AR+HC(TA+ELV Republic Act "!:: entitle0 9An Act Re/isin5 the Cha1te1 of the Philippine National Ban9 6as app1o/e0 an0 3a0e eIecti/e on #une "$% "&. (t 6as the1efo1e the la6 6hen in "&$! the 3o1t5a5e he1e in 0ispute 6as e8ecute0. e8ecute0. (t 6as the /e17 la6 that the abo/e-uote0 pa1a51aph @5 of the 3o1t5a5e cont1act 3a0e 1efe1ence to. (n this connection% e/i0entl7 o/e1looe0 b7 counsel fo1 PNB is that Republic Act "!:: 0oes not conte3plate e8t1au0icial p1oce0u1e. p1oce0u1e. Clea1l7 in0icati/e of this is Section : the1eof 6hich p1o/i0es) Sec. :. Ri5ht of 1e0e3ption of p1ope1t7 fo1eclose0. fo1eclose0. ? The 3o1t5a5o1 shall ha/e the 1i5ht% 6ithin the 7ea1 afte1 the sale of 1eal estate as a 1esult
of the fo1eclosu1e of a 3o1t5a5e% to 1e0ee3 the p1ope1t7 b7 pa7in5 the a3ount 8e0 b7 the cou1t in the o10e1 of e8ecution% 6ith inte1est the1eon at the 1ate specie0 in the 3o1t5a5e% an0 all the costs an0 othe1 u0icial e8penses e8penses incu11e0 incu11e0 b7 the Ban b7 1eason 1eason of the e8ecution an0 sale an0 fo1 the custo07 of sai0 p1ope1t7. (n0ee0% con/entional le5al an0 banin5 business sense 0ictates that it 3ust ha/e been because of such o3ission that pa1a51aph @5 abo/e ha0 to e8p1essl7 e8p1essl7 inco1po1ate Act !"! 6hich p1o/i0es fo1 e8t1au0icial fo1eclosu1e. ;e cannot% the1efo1e% escape the conclusion that 6hat STAN+AR+ a51ee0 to in 1espect to the possible fo1eclosu1e of its 3o1t5a5e 6as to subect the sa3e to the p1o/isions of Act !"! shoul0 the PNB opt to utili4e sai0 la6 instea0 of Republic Act Act "!::. On the othe1 han0% Act !"!% as a3en0e0 b7 Act >:"=% is of "&> /inta5e. (ts Section $ /e17 clea1l7 5o/e1ns the 1i5ht of 1e0e3ption in e8t1au0icial e8t1au0icial fo1eclosu1es thus) Sec. $. (n an cases in 6hich 6hich an e8t1au0ic e8t1au0icial ial sale sale is 3a0e un0e1 the special po6e1 he1einbefo1e he1einbefo1e 1efe11e0 to% the 0ebto1% his successo1s in inte1est o1 an7 u0icial c1e0ito1 o1 u053ent c1e0ito1 of sai0 0ebto1% o1 an7 pe1son ha/in5 a lien on the p1ope1t7 subseuent to the 3o1t5a5e o1 0ee0 of t1ust un0e1 6hich the p1ope1t7 is sol0% 3a7 1e0ee3 the sa3e at an7 ti3e 6ithin the te13 of one 7ea1 f1o3 an0 afte1 the 0ate of the sale an0 such 1e0e3ption shall be 5o/e1ne0 b7 the p1o/isions p1o/isions of sections fou1 hun01e0 an0 si8t7-fou1 to fou1 hun01e0 an0 si8t7-si8% inclusi/e% of the Co0e of Ci/il P1oce0u1e% P1oce0u1e% in so fa1 as these a1e not inconsistent 6ith the p1o/isions of this Act. Sections fou1 hun01e0 si8t7-fou1 to fou1 hun01e0 si8t7si8% inclusi/e% of the Co0e of Ci/il P1oce0u1e% P1oce0u1e% since the p1o3ul5ation of the Rules of Cou1t of "&>:% beca3e Sections &% !: an0 !> of Rule !&. The sa3e sections 6e1e 1eite1ate0 in the Re/ise0 Rules of Cou1t in #ul7 "&$>. *1o3 all the fo1e5oin5% ;e a1e of the consi0e1e0 opinion an0 so hol0 that STAN+AR+JSHC(TA+ELJS pe1io0 of 1e0e3ption 6as up to Ma1ch ":% "&'$. > That C(TA+EL C(TA+EL le0 its co3plaint to co3pel PNB to accept its 1e0e3ption onl7 on Ma1ch ""% "&'$ is of no 3o3ent. The uneui/ocal ten0e1 of of 1e0e3ption 6as 6as 3a0e in the lette1 of *1ancisco S. Co1pus% its P1esi0ent% of Ma1ch % "&'$ acco3panie0 b7 a 3ana5e1Js chec of the Ri4al Co33e1cial Co33e1cial Banin5 Co1po1ation a 6ell no6n% bi5 an0 1eputable banin5 institution% fo1 the a3ount it belie/e0 it shoul0 pa7 as 1e0e3ption p1ice. PNB 1eecte0 it on the sole an0 onl7 51oun0 that it consi0e1e0 the a3ount insuKcient. The Cou1t% the1efo1e% the1efo1e% hol0s that the 1e0e3ption 6as 3a0e on ti3e% that is% 6ithin one 7ea1 @o1 e/en t6el/e 3onths f1o3 the 0ate appea1in5 as the 0ate of the 1e5ist1ation of the ce1ticate of sale. ,o6 about the a3ount nee0e0 fo1 such 1e0e3ptionV On this sco1e% PNB insists on p. & et. se. of its b1ief on the applicabilit7 to this case of 9Section of P1esi0ential +ec1ee No. $&>% othe16ise no6n as the ne6 PNB Cha1te19 6hich p1o/i0es) Sect Sectio ion n . . Ri5h Ri5htt of Re0 Re0e3 e3pt ptio ion n of *o1 *o1ec eclo lose se0 0 P1ope1t7 ? Ri5ht of Possession +u1in5 Re0e3ption Pe1io0 ? ;ithin one 7ea1 f1o3 the 1e5ist1ation 1e5ist1ation of the fo1eclosu1e fo1eclosu1e sale of 1eal estate% the 3o1t5a5o1 shall ha/e the 1i5ht to 1e0ee3 the p1ope1t7 b7 pa7in5 all clai3s of the Ban a5ainst hi3 on the 0ate of the sale inclu0in5 all the costs an0 othe1 e8penses incu11e0 b7 1eason of the fo1eclosu1e sale an0 custo07 of the p1ope1t7% as 6ell as cha15es an0 acc1ue0 inte1ests. But P.+. $&> too eIect onl7 on Ma7 =% "&'. PNBJs counsel hi3self has% as al1ea07 3entione0 abo/e% taen the position that it 6as the ol0 P NB Cha1te1% Republic Act "!::% that 6as e8p1essl7 3a0e pa1t of the
cont1act. (n othe1 6o10s% it 6as b7 /i1tue of such cont1actual stipulation an0 not e8 p1opio /i5o1e that the p1o/isions of the banJs then cu11ent cha1te1 boun0 the 3o1t5a5o1 STAN+AR+. But p1escin0in5 f1o3 possible le5al a6 in such pose an0 that all p1o/isions p1o/isions of the cha1te1 a1e enfo1ceable an0 3ust be 1ea0 into all 3o1t5a5es 6ith the PNB as inte51al pa1ts the1eof% in this instant case% the Cou1t n0s its han0s ine1t an0 shacle0 in the face of the constitutional p1osc1iption a5ainst the i3pai13ent of cont1acts. @Sec. ""% A1t. (% Ne6 Constitution State0 othe16ise% since the cont1act of 3o1t5a5e he1ein 6as ente1e0 into un0e1 a specic la6% Republic Act "!::% e/en the p1inciple that no la6 is una3en0able no1 un1epealable cannot hol0% 6hen the subseuent le5islati/e enact3ent% P.+. P.+. $&>% 6oul0 alte1 an0 3o0if7 to the p1eu0ice of an7 of the pa1ties the te13s of the cont1act un0e1 the ae5is of the p1io1 la6. (n0isputabl7% the application of P.+. $&> to the 3o1t5a5e he1ein in/ol/e0 6oul0 /iolate the Constitution. ,ence% it si3pl7 cannot appl7. State0 othe16ise% b7 /i1tue of the p1o/ision of the 3o1t5a5e cont1act p1ecisel7 cite0 b7 PNB% na3el7% its pa1a51aph @5% uote0 ea1lie1% PNB ha0 the cont1actuall7 acui1e0 acui1e0 option to 1eso1t eithe1 to its Cha1te1% Republic Republic Act "!:: o1 to Act !"!. ;hen it fo1eclose0 fo1eclose0 the 3o1t5a5e at issue% it chose Act !"!. That 6as an option it f1eel7 f1eel7 e8e1c e8e1cise0 ise0 6ithout the least inte1/ention of appellee. An0 it 6as e8e1cise0 e8e1cise0 befo1e P.+. $&> ca3e into bein5. (n fact% the fo1eclosu1e sales too place in "&'> 7et. An0 so% to 3ae the 1e0e3ption subect to a subseuent la6 6oul0 be ob/iousl7 p1eu0icial p1eu0icial to the pa1t7 e8e1cisin5 e8e1cisin5 the 1i5ht to 1e0ee3. ;ithout consi0e1in5 consi0e1in5 the 0ate the loan 6as secu1e0 an0 the 0ate of the 3o1t5a5e cont1act% an0 tain5 into account onl7 the 0ates of the fo1eclosu1es an0 auction sales% it is uite ob/ious that an7 chan5e in the la6 5o/e1nin5 1e0e3ption that 6oul0 3ae it 3o1e 0iKcult than un0e1 the la6 at the ti3e of the sale cannot be 5i/en 1et1oacti/e 1et1oacti/e eIect. Un0e1 the te13s of the 3o1t5a5e cont1act% the te13s an0 con0itions un0e1 6hich 1e0e3ption 3a7 be e8e1cise0 a1e 0ee3e0 pa1t an0 pa1cel the1eof 6hethe1 the sa3e be 3e1el7 con/entional o1 i3pose0 b7 la6. To alte1 those te13s in a 3anne1 p1eu0icial to the 3o1t5a5o1 o1 the pe1son 1e0ee3in5 the p1ope1t7 as his successo1-in-inte1es successo1-in-inte1estt afte1 the fo1eclosu1es fo1eclosu1es an0 sales 6oul0 0enitel7 co3e 6ithin the constitutional p1osc1iption a5ainst i3pai13ent of the obli5ations of cont1acts. ,a/in5 thus co3e to the inelu0ible conclusion that Act !"! an0 Sections & to ! of Rule !& of the Rules of Cou1t 1athe1 than P.+. $&> a1e the la6s applicable to the 1i5ht of 1e0e3ption in/oe0 b7 appellee in this case% it 6oul0 appea1 that all that 1e3ains fo1 Us to 0o is to appl7 the sai0 le5al p1ecepts. Pu1suant to Section !: of Rule !&% 9the u053ent 0ebto1 ? @o1 his successo1-in-inte1est pe1 Section &% he1e Leticia Co% 3a7 1e0ee3 the p1ope1t7 f1o3 the pu1chase1% @he1e PNB at an7 ti3e 6ithin t6el/e 3onths afte1 the sale% on pa7in5 the pu1chase1 the a3ount of his pu1chase% 6ith one pe1 centu3 pe1 3onth inte1est the1eon in a00ition% up to the ti3e of 1e0e3ption% to5ethe1 6ith the a3ount of an7 assess3ents o1 ta8es 6hich the pu1chase1 3a7 ha/e pai0 the1eon afte1 the pu1chase% an0 inte1est on such last na3e0 a3ount at the sa3e 1ate ...9 (n this connection% lest it be a15ue0 that C(TA+EL C(TA+EL 0i0 not inclu0e in its ten0e1 the a3ount of assess3ents o1 ta8es PNB 3i5ht ha/e pai0 befo1e the 1e0e3ption% ,is ,ono1% ;e note that the t1ial u05e% has pointe0 out that in spite of the 1eui1e3ent 1eui1e3ent in the ce1ticate of sale issue0 b7 the she1iI that the pu1chase1 o1 hi5hest bi00e1 sub3its 6ithin !: 0a7s i33e0iatel7 p1ece0in5 the e8pi1ation of the pe1io0 of 1e0e3ption% an app1op1iate state3ent of the a3ount of such assess3ents o1 ta8es% PNB faile0 to co3pl7 6ith such 1eui1e3ent% 1eui1e3ent% hence it 6oul0 be unfai1 to fault C(TA+EL C(TA+EL fo1 the non- inclusion the1eof in its ten0e1. PNB a15ues% ho6e/e1% that it 0i0 fu1nish C(TA+EL on Ma1ch % "&'$ the 1eui1e0 0ata. ;e note% ho6e/e1% that the
state3ent of P!%!$$%>$.> specie0 b7 PNB in its 1epl7 of Ma1ch % "&'$ is not clea1 enou5h to sho6 the 0etails on ta8es an0 assess3ents un0e1 0iscussion. (n an7 e/ent% consi0e1in5 that as ea1lie1 pointe0 out b7 Us% the1e coul0 be a possibilit7 that Ma1ch % "&'$ shoul0 be consi0e1e0 as the last 0a7 of 1e0e3ption% the e8planation of PNB is% at least in euit7% una/ailin5. The1e 6as no 3o1e 3o1e ti3e fo1 C(TA+EL C(TA+EL to ha/e a b1ea0o6n of the P!%!$$%>$.> to n0 out 6hat ite3s 6e1e inclu0e0 the1ein. An76a7% this 0iscussion is p1acticall7 aca0e3ic because in the 3anne1 ;e a1e 1esol/in5 1esol/in5 this case% this point 6oul0 be of no 3o3ent. Befo1e passin5 to anothe1 aspect of this case% it 3a7 not be a3iss to 3ention he1e that in Mo1anJs Co33ents on the Rules of Cou1t @p. !$-!'% "&'& e0.% it is state0 that 6he1e the u053ent 0ebto1% 6hich necessa1il7 inclu0es his successo1-in-inte1est @Section &% a% Rule !& /ali0l7 ten0e1s the necessa17 pa73ent fo1 the 1e0e3ption an0 the ten0e1 is 1efuse0% it is not necessa17 that it be follo6e0 b7 the 0eposit of the 3one7 in cou1t o1 else6he1e @Ena5e /s. 0a. 0e Escano% != Phil. $=' an0 no inte1est afte1 such ten0e1 is 0e3an0able on the 1e0e3ption 3one7. @Ma1tine4 /s. Ca3pbell% ": Phil. $$ *ab1os /s. A5ustin% "= Phil. !!$. The u1isp1u0ence cite0 cite0 b7 PNB a1e not applicable applicable E/en as ;e ha/e so fa1 focuse0 Ou1 0iscussion an0 1esolution of the issues he1ein on the pe1tinent statuto17 p1o/isions% ;e ha/e not 1eall7 close0 Ou1 e7es to the u1isp1u0ence cite0 b7 PNB in its b1ief% fou1 of 6hich a1e 6o1th7 of 3ention% na3el7 Me0ina /s. PNB% $ Phil. $. Nepo3uceno /s. R*C% G.R. No. L">=''% No/. !%"&$: Pe1e4 /s. PNB% "' SCRA =!! an0 +BP /s. Mi1an5 $$ SCRA ">". The case of Pe1e4% Pe1e4% sup1a% 0i0 not in/ol/e in/ol/e a 1e0e3ption 1e0e3ption in the sense that it is in issue in this case. (n fact% the point in/ol/e0 in the instant case is not e/en touche0 in the s7llabus the1eof in SCRA. SCRA. This is because 6hat 6as fun0a3entall7 the p1oble3 the1ein 6as 6hethe1 o1 not it 6as obli5ato17 on the pa1t of the ban3o1t5a5ee to fo1eclose u0iciall7 the 3o1t5a5e inas3uch as the 3o1t5a5o1 0ie0. As the Cou1t sai0% 9the 3ain issue in this appeal is the application of Section '% Rule =' of the Rules of "&>: @no6 Section ' of Rule $=% a 1ep1o0uction of Section ':= of the Co0e of Ci/il P1oce0u1e9. P1oce0u1e9. ,ence% an7thin5 sai0 the1ein at issue 3a7 be 0ee3e0 as obite1. (f an7thin5 in that opinion is 1ele/ant he1eto% it is that po1tion the1eof that ustl7 an0 euitabl7 hol0s hol0s that f1o3 6hate/e1 6hate/e1 a3ount shoul0 be pa7able to the 3o1t5a5ee Ban% shoul0 be 0e0ucte0 9the /alue of an7 1ents an0 p1ots 0e1i/e0 b7 the @sai0 ban f1o3 the p1ope1t7 in uestion9. @at p. =>: (n the Nepo3uceno case% sup1a% 6hat conf1onte0 the Cou1t 6as a uestion 1elati/e to a 3o1t5a5e 6ith the Rehabilitation *inance Co1po1ation @R*C fo1 sho1t% no6 the +e/elop3ent Ban of the Philippines. The Cou1t foun0 no 0iKcult7 in not appl7in5 Section $ of Act !"! because it foun0 that the1e is in Section !" of the Cha1te1 of the R*C a p1o/ision basicall7 si3ila1 to Section of P1esi0ential +ec1ee $&>% no6 bein5 in/oe0 he1e b7 PNB. Natu1all7% Natu1all7% the Cou1t uphel0 the R*CJs contention that the 6hole a3ount of the 3o1t5a5o1Js in0ebte0ness shoul0 be pai0. But in th e instant case% as al1ea07 0iscusse0 ea1lie1% P.+. $&> ca3e too late. +BP /s. Mi1an5 sup1a% follo6s in p1inciple the Nepo3uceno 1ulin5 that the special p1o/isions in the cha1te1 of +BP 5o/e1n in 3atte1s of 1e0e3ption of p1ope1t7 acui1e0 b7 it in a fo1eclosu1e sale. So% ;e nee0 not eluci0ate an7 fu1the1 on its inapplicabilit7 he1eto. (t is the ea1lie1 case of Me0ina /s. PNB% sup1a% that nea1l7 app1o8i3ates app1o8i3ates the position PNB is p1essin5 on Us no6% because in a po1tion of the opinion the1eof% Chief
#ustice A/enceFa A/enceFa as co11ectl7 co11ectl7 un0e1line0 un0e1line0 b7 PNB in its b1ief% state0) As 6e ha/e in0icate0 abo/e% the1e is no uestion 6ith 1e5a10 to the plaintiIsJ 1i5ht% as successo1s of the Manila Co33e1cial Co3pan7% to 1epu1chase the pa1cels co/e1e0 co/e1e0 b7 the t1ansfe1 ce1ticates of title Nos. "!' an0 "!&. The uestion is 6hethe1% as the ban conten0s an0 the t1ial cou1t has hel0% the 1e0e3ption shoul0 be 3a0e b7 pa7in5 to the ban the enti1e a3ount o6ne0 to it b7 the Manila Co33e1cial Co33e1cial Co3pan7. The appellants conten0 that this 1e0e3ption 3a7 be 3a0e b7 onl7 1ei3bu1sin5 the ban 6hat it has pai0 fo1 the sale 3a0e to it. (n this 1espect 6e a1e also of the opinion that the u053ent appeale0 f1o3 is co11ect. @Pa5e $ But this state3ent nee0s cla1ication. To6a10s the conclu0in5 po1tion of the opinion% he e8plaine0 that) (t 6ill be 1e3e3be1e0 that the 3o1t5a5e cont1act bet6een the ban an0 the Manila Co33e1cial Co33e1cial Co3pan7 6as e8ecute0 on Octobe1 !:% "&:% befo1e the app1o/al of Act No. !"! in Ma1ch% "&>. (f% befo1e Act No. !"! too eIect% the Manila Co33e1cial Co3pan7 ha0 /iolate0 the cont1act% be7on0 all 0oubt the ban 6oul0 ha/e been able to sell the 3o1t5a5e0 p1ope1t7% 6ithout the necessit7 of a u0icial action% an0 the sale thus 3a0e 6oul0 ca117 the 1i5ht of 1epu1chase on the pa1t of the 0ebto1 th1ou5h the pa73ent of the enti1e a3ount of the 0ebt. ;hen the banJs 1i5ht to fo1eclose fo1eclose the 3o1t5a5e of the Manila Co33e1cial Co3pan7 acc1ue0% Act No. !"! 6as al1ea07 in fo1ce. Of cou1se% this la6% bein5 5ene1al% 0i0 not aIect the cha1te1 of the ban% 6hich 6as a special la6. la6. Thus% 6hen the ban% in o10e1 to sell the 3o1t5a5e0 p1ope1t7 e8t1au0iciall7% e8t1au0iciall7% 1eso1te0 to Act No. !"!% it 0i0 so 3e1el7 to n0 a p1ocee0in5 fo1 the sale but that action cannot be taen to 3ean a 6ai/e1 of its 1i5ht to 0e3an0 the pa73ent of the 6hole 0ebt befo1e the p1ope1t7 can be 1e0ee3e0. The 1eco10 contains nothin5 to sho6 that the ban 3a0e this 6ai/e1 of sai0 1i5ht. @Pp $$-$' The1e is he1e he1e an i3plication that in in un0e1tain5 the fo1eclosu1e the1ein in/ol/e0% the PNB 1elie0 on Act !"!. This is not uite accu1ate% fo1 in the openin5 pa1a51aph of the sa3e opinion% it is state0 that) On Octobe1 !:% "&: the Manila Co33e1cial Co33e1cial Co. an0 La ebana ebana Co. 3o1t5a5e0 fou1 fou1 pa1cels of lan0 6ith To11ens titles% 0esc1ibe0 in the co3plaint% to the Philippine National Ban% the 1st an0 fou1th pa1cels bein5 in the na3e of the La ebana Co. an0 the secon0 an0 thi10 in the na3e of the Manila Co33e1cial Co. The 3o1t5a5e 6as 5i/en to secu1e the pa73ent of P$=:%::: o1 fo1 6hate/e1 a3ount the Manila Co33e1cial Co. 3i5ht be in0ebte0 to the Philippine National Ban. One of the clauses of the 3o1t5a5e p1o/i0es that in case of a /iolation b7 the Manila Co33e1cial Co. of an7 of the con0itions of the cont1act the Philippine National Ban 3a7 tae possession of the 3o1t5a5e0 p1ope1t7 an0 sell o1 0ispose of it b7 public o1 p1i/ate sale% 6ithout 1st ha/in5 to le a co3plaint o1 to 5i/e an7 notice% an0 at such sale% if public% it 3a7 acui1e fo1 itself all o1 an7 of the pa1cels of lan0. @Pa5e $" @E3phasis supplie0 Thus% it is to Ou1 3in0 3in0 close1 to the t1uth that it 6as 6as b7 /i1tue of such cont1actual clause% 1athe1 than Act !"!% e/en if the 1euest to the she1iI 0i0 3ention sai0 Act that PNB fo1eclose0. (n an7 e/ent% the Cou1t 0i0 tae into account that the 3o1t5a5e at issue in that case 6as e8ecute0 befo1e the app1o/al of Act !"! an0 obse1/e0 that 6ithout such Act% the 1i5ht of the ban to full pa73ent 6oul0 ha/e been in0isputable. This is the sa3e p1inciple of non-i3pai13ent of the cont1acts b7 subseuent le5islati/e action ;e ha/e 3a0e 1efe1ence to abo/e in p1eclu0in5 the applicabilit7 he1eto of P.+. $&>.
On the 3ino1 issues ;e a1e not i3p1esse0 that PNB is 1eall7 se1ious in its pose that the ten0e1 b7 3ana5e1Js chec b7 C(TA+EL C(TA+EL 6as ineKcacious. *o1 one thin5% that obli5ation 6as 6ai/e0 6hen in its lette1 of 1eection% the ban 0i0 not in/oe it. @G1e5o1io A1aneta% (nc. /s. +e Pate1no an0 i0al% &" Phil. '=$ Mo1e i3po1tantl7% this Cou1t has al1ea07 sanctione0 1e0e3ption b7 chec. @#a/ellana /s. Mi1asol% >: Phil. '$" Neithe1 0o ;e n0 an7 substantial 6ei5ht in PNBJs pose that the t1ansfe1 o1 con/e7ance of STAN+AR+JS 1i5ht of 1e0e3ption to C(TA+EL an0 the latte1 to Leticia Co is not bin0in5 on it. (n Lichauco /s. Ole5a1io% et al.% >! Phil. >:% this Cou1t hel0 that 96hethe1 o1 not ... an e8ecution e8ecution 0ebto1 6as le5all7 autho1i4e0 to sell his 1i5ht of 1e0e3ption% is a uestion al1ea07 0eci0e0 b7 this Cou1t in the aK13ati/e in nu3e1ous 0ecisions on the p1ecepts of Sections >$! an0 >$> an0 othe1 sections 1elate0 the1eto% of the Co0e of Ci/il P1oce0u1e. P1oce0u1e. 9 @The 3entione0 p1o/isions a1e ca11ie0 o/e1 in Rule !& of the Re/ise0 Re/ise0 Rules of Cou1t. That the t1ansfe1s o1 con. con/e7ances in uestion 6e1e not 1e5iste1e0 is of 3iniscule si5nicance% the1e bein5 no sho6in5 that PNB 6as 0a3a5e0 o1 coul0 be 0a3a5e0 b7 such o3ission% ;hen C(TA+EL C(TA+EL 3a0e its ten0e1 on Ma7 % "&'$% PNB 0i0 not uestion the pe1sonalit7 of C(TA+EL at all. (t is no6 too late an0 pu1el7 technical to 1aise such an innocuous failu1e to co3pl7 6ith A1ticle "$ of the Ci/il Co0e. The fo1e5oin5 fo1e5oin5 0iscussion ine8o1abl7 ine8o1abl7 points to the conclusion that the p1ice of 1e0e3ption of P"%$"%&':.:: ten0e1e0 b7 C(TA+EL on Ma1ch % "&'$ 6as the co11ect a3ount. Since PNB 1efuse0 to allo6 the 1e0e3ption thus le5all7 ten0e1e0% appl7in5 the la6 st1ictl7% it 6oul0 stan0 to lose P"%'>>%'$.> P"%'>>%'$.> of 6hat it clai3s 6as the total in0ebte0ness o1 outstan0in5 obli5ation of C(TA+EL as of Ma1ch ""% "&'$. To To a/oi0 this loss% loss% PNB in/oes% in/oes% as al1ea07 state0 state0 abo/e% P.+. No. $&>% but ;e ha/e also pointe0 out ea1lie1 that to appl7 sai0 0ec1ee 6oul0 1esult in the i3pai13ent of the cont1actual obli5ation of C(TA+EL% 6hich cannot be allo6e0 un0e1 the Constitution. ,o6e/e1% ;e a1e pe1sua0e0 that all such consi0e1ations 6oul0 1en0e1 the 1esult of this case sho1t of 6hat appea1s to be substantial ustice in the li5ht of the situation on han0. (t st1ies Us as 1athe1 unconscionable that b7 a lite1al application of the la6 an0 pe1haps 0ue to a 3istae in the a3ount of the bi0 3a0e b7 PNB% $ the ban 6oul0 not 5et full satisfaction of its c1e0it. (n0ee0% the1e 6oul0 be unust en1ich3ent on the pa1t of the 0ebto10ebto1- 3o1t5a5o1 in such an e/entualit7. Ou1 sense of ustice cannot pe13it such ineuitous a0/anta5e. ;ith this point in 3in0% ;e 0ee3 it fai1e1 an0 so hol0 that consi0e1in5 the uniue factual 3ilieu of this case% A1ticles an0 "> of the Ci/il Co0e shoul0 be the 5ui0eposts of Ou1 0ecision he1e. Sai0 a1ticles p1o/i0e) ART. . E/e17 pe pe1son 6h 6ho th th1ou5h an an ac act of of pe1fo13ance b7 anothe1% o1 an7 othe1 3eans% acui1es o1 co3es into possession of so3ethin5 at the e8pense of the latte1 6ithout ust o1 le5al 51oun0% shall 1etu1n the sa3e to hi3. 888
888
888
ART ART. "> ">. . Ce1t Ce1tai ain n la6 la6fu ful% l% /olu /olunt nta1 a17 7 an0 an0 uni unila late te1a 1all acts 5i/e 1ise to the u1i0ical 1elation of uasi-cont1act to the en0 that no one shall be unustl7 en1iche0 o1 benete0 at the e8pense of anothe1. anothe1. Althou5h the 1epo1t of the Co0e Co33ission states that)
Anothe1 1ule is e8p1esse0 in a1ticle 6hich co3pels the 1etu1n of a thin5 acui1e0 96ithout ust o1 le5al 51oun0.9 This p1o/ision e3bo0ies the 0oct1ine that no pe1son shoul0 unustl7 en1ich hi3self at the e8pense of anothe1% 6hich has been one of the 3ainsta7s of e/e17 le5al s7ste3 fo1 centu1ies. (t is 3ost nee0ful that this ancient p1inciple be clea1l7 an0 specicall7 consec1ate0 in the p1opose0 Ci/il Co0e to the en0 that in cases not fo1eseen b7 the la63ae1% no one 3a7 unustl7 benet hi3self to the p1eu0ice of anothe1. anothe1. The Ge13an Ci/il Co0e has a si3ila1 p1o/ision @a1t. =".
;,ERE*ORE% the u053ent of the t1ial cou1t a5ainst the Philippine National Ban he1ein on appeal is he1eb7 3o0ie0 an0 anothe1 one is he1eb7 1en0e1e0 in fa/o1 of the sai0 0efen0ant-appellant ban in acco10ance 6ith the fo13ula he1ein abo/e state0% an0% acco10in5l7% upon pa73ent b7 LET(C(A CO of the a3ount 0ue it pu1suant to the abo/e co3putation% PNB is he1eb7 o10e1e0 to t1ansfe1 the title to the p1ope1t7 in uestion to LET(C(A CO. This pa73ent 3ust be 3a0e 6ithin ten @": 0a7s f1o3 the nalit7 of this u053ent. No costs.
it 3a7 be sai0 that 6hate/e1 of the p1inciple of unust en1ich3ent 3a7 not be co/e1e0 b7 A1ticle % A1ticle "> 3aes its enhance3ent in this u1is0iction 3ost co3p1ehensi/e
Concepcion% #1.% Gue11e1o% +e Cast1o an0 Escolin% ##.% concu1. Auino an0 Aba0 Santos% ##.% too no pa1t.
Conseuentl7% it is but ust an0 p1ope1 that PNB shoul0 be pai0 the full a3ount of P!%!$$%>$.> P!%!$$%>$.> 6ithout an7 inte1est as of Ma1ch ""% "&'$% 6hen it 1efuse0 a 1e0e3ption le5all7 an0 /ali0l7 ten0e1e0. On the othe1 han0% the a3ount of P"%$"%&':.:: ten0e1e0 ten0e1e0 b7 C(TA+EL on Ma1ch % "&'$ an0 6hich 6as 0eposite0 in a sa/in5s account% 01a6in5 inte1est appa1entl7 less than " p.a.% in the na3e of PNB b7 o10e1 of the t1ial cou1t shoul0 be co3pute0 to ha/e ea1ne0 le5al inte1est o1 " p.a.% co3poun0e0 annuall7% since Ma1ch ""% "&'$% p1o/i0e0 ho6e/e1 that shoul0 such a3ount inclu0in5 the co3poun0e0 inte1est at " p.a. so ea1ne0 be less than P!%!$$%>$.>% petitione1 he1ein shoul0 pa7 PNB such 0iIe1ence% an0 p1o/i0e0% on the othe1 han0% that 6ith this a11an5e3ent% PNB 0oes not ha/e to account to C(TA+ELHLET(C(A CO fo1 an7 of the 1entals it ha0 ea1ne0 f1o3 the ti3e it too possession of the p1ope1t7. (n the nal anal7sis% instea0 of PNB losin5 P"%'>>%'$.>% P"%'>>%'$.>% un0e1 st1ict technical le5al 1easonin5% as e8plaine0 abo/e% appl7in5 he1eto the p1inciple of unust en1ich3ent% 6hich ;e 0ee3 in the peculia1 ci1cu3stances ci1cu3stances at this instant case to be the fai1est 6a7 of 1esol/in5 this cont1o/e1s7% it 6oul0 still be pai0 b7 petitione1 a ce1tain a3ount% not to 3ention 6hat 3ust be uite substantial an0 consi0e1able% the 1entals the sai0 ban it has ea1ne0% 6hich it 0oes not ha/e to account fo1. (n closin5% ;e 3a7 a00 that in Escano% sup1a% this Cou1t lai0 0o6n as a polic7 that 91e0e3ptions a1e looe0 looe0 upon 6ith fa/o1% an0 6hen an inu17 is to follo6% a libe1al const1uction 6ill be 5i/en to ou1 1e0e3ption la6s to the en0 that the p1ope1t7 of the 0ebto1 3a7 pa7 as 3an7 of the 0ebto1Js liabilities9% liabilities9% PNB ha/in5 fo1eclose0 fo1eclose0 on the Ba5uio p1ope1ties an0 the chattels of STAN+AR+ fo1 6hat appea1s coul0 ha/e been a fai1e1 p1ice% it is but in consonance 6ith the Escano polic7 that the 1e0e3ption he1ein in/ol/e0 be allo6e0 on the basis of the inunction a5ainst unust en1ich3ent. ' ;e 3a7 a00 he1e the obse1/ation% tau5ht b7 co33on business e8pe1ience% that 6hen a ban 51ants a loan% secu1e0 b7 an7 collate1al% 6hat is of uppe13ost consi0e1ation to such len0e1 is the bo11o6e1Js capacit7 to pa7 acco10in5 to the te13s stipulate0% an0 not 1eall7 the acuisition of the collate1al% if onl7 to 3aintain the banJs liui0it7 position as con/enientl7 as possible. Acui1e0 Acui1e0 assets 5ene1all7 a00 to liui0it7 p1oble3s of bans. The fo1eclosu1e of the secu1it7 is a 3easu1e of last 1eso1t% hence 6hen b7 the e8e1cise e8e1cise of the 1i5ht of 1e0e3ption% the ban can 1eco/e1 the 3one7 it has loane0% nothin5 coul0 be 3o1e p1ope1 than to allo6 the bo11o6e1 to 1etain his p1ope1t7. Of cou1se% peculia1 instances a1e natu1all7 e8cepte0. That is 6h7 this 0ecision cannot be in/oe0 as a p1ece0ent fo1 othe1 pa1ties not e8actl7 si3ila1l7 situate0 as the appellee in this case. Shoul0 the1e be an7 thou5ht that Ou1 1esolution of this case is not st1ictl7 acco10in5 to le5al p1inciples% let e/e17one be 1e3in0e0 that this Cou1t has inhe1ent euit7 u1is0iction it can al6a7s e8e1cise e8e1cise in settin5s atten0e0 b7 unusual ci1cu3stances to p1e/ent 3anifest inustice that coul0 1esult f1o3 ba1e technical a0he1ence to the lette1 of the la6 an0 unp1ecise u1isp1u0ence un0e1 it.
SECON+ +((S(ON YG.R. No. L-$'> ) #ul7 !"% "&=".Z ALP,A (NSURANCE AN+ SURET CO.% (NC.% PlaintiIAppellant% /s. ESPERAN2A C. REES% ARTURO R. REES an0 +EELOPMENT BAN< O* T,E P,(L(PP(NES% +efen0ants-Appellees.
+EC(S(ON
BARRE+O% #.)
An appeal f1o3 the 0ecision of the Cou1t of *i1st (nstance of Manila in Ci/il Case No. >&&=:% Alpha (nsu1ance an0 Su1et7 Co.% (nc. /s. Espe1an4a C. Re7es% et al.% ce1tie0 b7 the Cou1t of Appeals to this Cou1t fo1 the 1eason that the sole assi5n3ent of e11o1 of appellant 1aises pu1el7 a le5al uestion. The follo6in5 facts facts a1e un0ispute0) un0ispute0) The spouses Espe1an4a C. C. Re7es an0 A1tu1o A1tu1o R. R. Re7es e8ecute0 e8ecute0 on No/e3be1 "% "&= in fa/o1 of Alpha (nsu1ance an0 Su1et7 Co.% (nc. a secon0 3o1t5a5e o/e1 thei1 t6o pa1cels of lan0 c1ana0@6ith a total a1ea of >: sua1e 3ete1s an0 the buil0in5s the1eon% locate0 at Maati% Ri4al% in consi0e1ation of Alpha (nsu1ance[s un0e1tain5 to act as su1et7 of the sai0 spouses in ce1tain loans c1ana0@not to e8cee0 P":%:::.:: to be obtaine0 f1o3 bans o1 nancial institutions. The t6o lots 6e1e p1e/iousl7 3o1t5a5e0 to the +e/elop3ent Ban of the Philippines as secu1it7 fo1 a loan of P"'%:::.::. (n "&=% Espe1an4a C. Re7es bo11o6e0 P%:::.:: f1o3 the P1u0ential Ban an0 T1ust Co3pan7. (n "&&% she bo11o6e0 bo11o6e0 also P%:::.:: f1o3 the Philippine Banin5 Co1po1ation. Alpha (nsu1ance 6as he1 su1et7 an0 co3ae1 in t6o p1o3isso17 notes co/e1in5 the sai0 loans. She an0 he1 husban0 e8ecute0 in0e3nit7 a51ee3ents in fa/o1 of Alpha (nsu1ance in a00ition to the secon0 3o1t5a5e. +ue to the 0efault of Espe1an4a C. Re7es% Re7es% Alpha (nsu1ance% as soli0a17 0ebto1% 6as const1aine0 to pa7 the t6o loans total balance of 6hich as of No/e3be1 "% "&$" 6as P'%'.::% plus " inte1est pe1 annu3. As the Re7es spouses 0i0 not 3ae an7 1ei3bu1se3ent to Alpha (nsu1ance% the latte1 le0 on Ma1ch '% "&$ in the Cou1t of *i1st (nstance of Manila the fo1eclosu1e action abo/e-3entione0 a5ainst the spouses an0 the +BP. The +BP in its ans6e1 ans6e1 alle5e0 that it ha0 a 1st 1st 3o1t5a5e on the t6o lots 6hich 6as supe1io1 to Alpha (nsu1ance[s 3o1t5a5e. (t p1a7e0 that% in case of fo1eclosu1e% fo1eclosu1e% the p1ocee0s of the sale be 1st applie0 to its c1e0it. The Re7es spouses 0i0 not le an ans6e1. The7 6e1e 0ecla1e0 in 0efault. 0efault. #u05e #ose L. Mo7a in his 0ecision 0ate0 *eb1ua17 *eb1ua17 "% "&$!% si3pl7 o10e1e0 o10e1e0 the Re7es spouses to pa7 Alpha (nsu1ance the su3 of P'%'.:: 6ith " inte1est a 7ea1 f1o3 No/e3be1 % "&$". Because the u05e ha0 i5no1e0 the p1a7e1 in Alpha (nsu1ance[s co3plaint fo1 the fo1eclosu1e of its secon0 3o1t5a5e% it le0 a 3otion fo1 1econsi0e1ation% p1a7in5 that the fo1eclosu1e of the secon0 3o1t5a5e be o10e1e0 an0 that the Re7es spouses be 1eui1e0 to pa7 atto1ne7[s fees.
#u05e Mo7a in his o10e1 o10e1 of *eb1ua17 *eb1ua17 "&% "&$! "&$! a6a10e0 a6a10e0 P''.: as atto1ne7[s fees% but he hel0 that the secon0 3o1t5a5e coul0 not be 1eco5ni4e0 as an encu3b1ance because the +BP 0i0 not consent to its e8ecution. #u05e Mo7a 1elie0 1elie0 on the 1ulin5 in Associate0 Associate0 (nsu1ance X Su1et7 Co.% (nc. /s. Re5iste1 of +ee0s of Pa3pan5a% ": Phil. "!% 6hich const1ue0 the follo6in5 p1o/isions p1o/isions of Co33on6ealth Act No. >&% the la6 c1eatin5 the A51icultu1al an0 (n0ust1ial Ban) \SEC. $. Secu1ities on loans 51ante0 b7 the A51icultu1al an0 (n0ust1ial Ban shall not be subect to attach3ent no1 can the7 be inclu0e0 in the p1ope1t7 of insol/ent pe1sons o1 institutions% unless all 0ebts an0 obli5ations of the 0ebto1 to the A51icultu1al an0 (n0ust1ial Ban ha/e been p1e/iousl7 p1e/iousl7 pai0% inclu0in5 acc1ue0 inte1est% collection e8penses% an0 othe1 cha15es.]" This Cou1t hel0 the1ein the1ein that this section e3b1aces e3b1aces \le/7 on e8ecution o1 an7 othe1 encu3b1ance% unless the sa3e is c1eate0 6ith the consent] of the ban an0 that \@A 0iIe1ent inte1p1etation 6oul0 0efeat the /e17 pu1pose of the la6 6hich is to 3aintain unha3pe1e0 the /alue of the p1ope1t7 until the encu3b1ance shall ha/e been 1elease0.] Alpha (nsu1ance le0 a 3otion fo1 1econsi0e1ation 1econsi0e1ation 6he1ein it alle5e0 that the secon0 3o1t5a5e 6as app1o/e0 b7 +BP Go/e1no1 Robe1to Robe1to S. Bene0icto c1ana0@E8h. A- an0 that the secon0 3o1t5a5e 6as 1e5iste1e0 1e5iste1e0 because of that app1o/al an0 because the +BP 0eli/e1e0 the o6ne1[s 0uplicate of the title to Alpha (nsu1ance in o10e1 to eIect the 1e5ist1ation. Ne/e1theless% #u05e Mo7a 0enie0 the 3otion. Alpha (nsu1ance appeale0 to this Cou1t. Cont1o/e1sies Cont1o/e1sies of this natu1e shoul0 not e/en be liti5ate0% 3uch less 1each this Sup1e3e Cou1t% a00in5 to its al1ea07 al3ost un3ana5eable 0ocet. The issue bet6een the pa1ties is so insubstantial that a little 3o1e eIo1t on the pa1t of 1especti/e counsels of the pa1ties an0 the t1ial cou1t to 5et to5ethe1 as to 6hat shoul0 be 0one 6oul0 ha/e clea1e0 up 3atte1s in a 3anne1 ;e a1e ce1tain 6oul0 ha/e been satisfacto17 to all conce1ne0. To thin that a liti5ation lie this shoul0 last since Ma1ch '% "&$ o1 3o1e than al3ost t6o 0eca0es a5o 6hen plaintiI-appellant le0 its action of fo1eclosu1e fo1eclosu1e is a blac spot in the a03inist1ation of ustice in this count17 count17. This situation is intole1able intole1able an0 the 3e3be1s of the Ba1 an0 the t1ial u05es ou5ht to chan5e thei1 attitu0es an0 0i1ect thei1 eIo1ts to6a10s 3o1e i3po1tant an0 substantial le5al 3atte1s% the1eb7 se1/in5 public inte1est to the ut3ost 6ithin thei1 e8pecte0 capabilities. +eci0in5 the le5al uestion befo1e Us% e/en if the +BP 6e1e ust an o10ina17 1st 3o1t5a5ee 6ithout an7 p1efe1ential liens un0e1 Republic Act No. = o1 Co33on6ealth Act >&% >&% the statutes 3entione0 in the Associate0 (nsu1ance case 1elie0 upon b7 the t1ial cou1t% it 6oul0 be unuestionable that nothin5 3a7 be 0one to fa/o1 plaintiI-appellant% a 3e1e secon0 3o1t5a5ee% until afte1 the obli5ations of the 0ebto1sappellees 6ith the 1st 3o1t5a5ee ha/e been full7 satise0 an0 settle0. (n la6% st1ictl7 speain5% 6hat 6as 3o1t5a5e0 b7 the Re7eses to Alpha 6as no 3o1e than thei1 euit7 of 1e0e3ption. Thus% 6hat ;e ;e pe1cei/e to be 3ost app1op1iate app1op1iate to 0o at this late sta5e is to see to it that the obli5ations in uestion a1e pai0 soonest. ,o6e/e1% to insist no6% afte1 so 3an7 6aste0 7ea1s% on follo6in5 in this case the o10ina17 fo1eclosu1e p1oce0u1e p1o/i0e0 b7 la6 6oul0 onl7 cause fu1the1 unnecessa17 0ela7 in the te13ination of the insubstantial cont1o/e1s7 a3on5 the pa1ties he1ein. (n +e la Ri/a /s. Re7noso% $" Phil. '!>% Antonio 0e la Ri/a% the secon0 3o1t5a5ee% le0 an action a5ainst the
3o1t5a5o1 Ma1celiano Re7noso Re7noso to fo1eclose fo1eclose the secon0 1ealt7 3o1t5a5e. La U1bana Mutual Buil0in5 an0 Loan Association% Association% the 1st 3o1t5a5ee% 6as oine0 as a co0efen0ant. This Cou1t hel0 that La U1bana U1bana 6as p1ope1l7 p1ope1l7 oine0 as a co-0efen0ant an0 aK13e0 the lo6e1 cou1t[s u053ent o10e1in5 Re7noso Re7noso to pa7 6ithin ninet7 0a7s the a3ounts 0ue to La U1bana an0 +e la Ri/a% an0% in case of failu1e to 0o so% o10e1in5 the sale at public auction of the 3o1t5a5e0 p1ope1t7 an0 the application of the p1ocee0s of the sale to the t6o 3o1t5a5e 0ebts. ;ithin this p1ece0ent% the Cou1t is of the consi0e1e0 opinion an0 so hol0s that to a/oi0 fu1the1 0ela7 in 61itin5 nis to the instant case 6hich sta1te0 6a7 bac in "&$% 6ithout an7 3o1e a0o% all that has to be 0one he1e is to ha/e the p1ope1t7 he1ein in/ol/e0 o10e1e0 b7 the t1ial cou1t sol0 at public auction i33e0iatel7% the p1ocee0s the1eof the1eof to be use0 to pa7 the outstan0in5 obli5ation% if still the1e be an7% of the 0efen0antsappellees Espe1an4a Re7es an0 A1tu1o Re7es to the +e/elop3ent Ban of the Philippines if the1e be an7 e8cess the1eafte1% the1eafte1% the sa3e be use0 to pa7 thei1 obli5ation to the plaintiI-appellant% an0 shoul0 the1e still be an7 fu1the1 e8cess% the sa3e shoul0 be 5i/en to the sai0 +efen0ants-Appellees. +efen0ants-Appellees. ACCOR+(NGL% u053ent is he1eb7 1en0e1e0 3o0if7in5 the 0ecision of the t1ial cou1t to confo13 6ith the p1oce0u1e p1oce0u1e he1ein outline0. No costs. Auino% Concepcion #1.% #1.% Aba0 Santos an0 +e Cast1o% ##.% concu1.
Republic Republic of the Philippines SUPREME COURT Manila SECON+ +((S(ON
G.R. Nos. Nos. L-!>!"' an0 L-!>!! No/e3be1 =% "&'! "&'! MARCELO STEEL CORPORAT(ON% ,ON. ;AL*R(+O +E LOS ANGELES% in his capacit7 as #u05e% Cou1t of *i1st (nstance of Ri4al% B1anch (% Que4on Cit7% an0 T,E S,ER(** O* QUE2ON C(T% petitione1s% /s. COURT O* APPEALS% PETRA R. *AR(N an0 BEN#AM(N *AR(N% 1espon0ents. *lo1entino *lo1entino (. Capco fo1 petitione1s. Ra3on M. 0e Cla1o fo1 1espon0ents.
BARRE+O% #.) Petitions fo1 1e/ie6 of the 0ecision of the Cou1t of Appeals in CA-G. R. No. >'"&-R% entitle0 Pet1a *a1in% et al.% /s. ,on. ;alf1i0o 0e los An5eles% etc. et al.% 51antin5 a petition fo1 ce1tio1a1i ce1tio1a1i of he1ein p1i/ate 1espon0ents% the spouses Bena3in an0 Pet1a *a1in% an0 annullin5 an0 settin5 asi0e the o10e1s sepa1atel7 issue0 b7 the Cou1t of *i1st (nstance of Que4on Cit7 in its Ci/il Case No. Q-&!=> an0 in L. R. C. Reco10 No. '$="% the 1st bein5 an o10e1 0ate0 +ece3be1 &% "&': 0en7in5 p1i/ate 1espon0entsJ 3otion to stop the She1iI of Que4on Cit7 f1o3 p1ocee0in5 6ith the e8t1au0icial e8t1au0icial fo1eclosu1e sale of the p1ope1ties he1ein in/ol/e0 6hich sai0 p1i/ate 1espon0ents ha0 3o1t5a5e0 to he1ein petitione1 Ma1celo Steel Co1po1ation% afte1 the sai0 cou1t ha0 al1ea07 1en0e1e0 u053ent 0is3issin5 the co3plaint fo1 p1ohibition to enoin sai0 fo1eclosu1e% but pen0in5 the appeal the1eof% an0 the secon0 bein5 the o10e1 0ate0 *eb1ua17 >% "&'" 51antin5 the sa3e petitione1Js 3otion fo1 a 61it of possession of the sai0 p1ope1ties 6hich it ha0 acui1e0 in the fo1eclosu1e fo1eclosu1e sale 6hich the cou1t ha0 1efuse0 to 1est1ain in the othe1 case. The bac51oun0 facts facts a1e state0 in in the 0ecision of the Cou1t of Appeals thus) This is a petition fo1 fo1 ce1tio1a1i ce1tio1a1i to annul the o10e1 0ate0 0ate0 +ece3be1 &% "&':% issue0 in Ci/il Case N o. Q-&!=> of the Cou1t of *i1st (nstance of Que4on Cit7% B1anch (% an0 the 61it of possession issue0 in L.R.C. Rec. No. '$=" of sai0 cou1t. (t appea1s that on Octobe1 !:% "&$>% the petitione1 spouses e8ecute0 a 0ee0 of 1eal estate 3o1t5a5e% in fa/o1 of 1espon0ent Ma1celo Steel Co1po1ation% he1einafte1 1efe11e0 to as 1espon0ent co1po1ation o/e1 a pa1cel of lan0 co/e1e0 b7 T.C.T. No. >$=& of the Re5iste1 Re5iste1 of +ee0s of Que4on Cit7% as secu1it7 fo1 the pa73ent of a p1o3isso17 note in the su3 of P$::%:::.::. On #ul7 >% "&$% the 1espon0ent co1po1ation le0 6ith the She1iI of Que4on Cit7 a /e1ie0 lette1-petition fo1 the e8t1a-u0icial fo1eclosu1e of the afo1e-3entione0 afo1e-3entione0 1eal estate 3o1t5a5e. Acco10in5l7% the 1espon0ent She1iI of Que4on Cit7 a0/e1tise0 an0 sche0ule0 the e8t1a-u0icial e8t1a-u0icial fo1eclosu1e sale of the 3o1t5a5e0 p1ope1t7 fo1 Au5ust $% "&$. On Au5ust "% "&$% the petitione1s le0 a5ainst the 1espon0ent co1po1ation an0 the 1espon0ent She1iI of Que4on Cit7 a petition captione0 9P1ohibition 9P1ohibition 6ith (nunction an0 +a3a5es9 0ocete0 as Ci/il Case No. Q &!=> of the Cou1t of *i1st (nstance of Ri4al% 6he1ein the7 p1a7e0 that the 1espon0ent she1iI be
pe13anentl7 enoine0 f1o3 p1ocee0in5 6ith the sche0ule0 sale at public auction of the 3o1t5a5e0 p1ope1t7% an0 that the 1espon0ent co1po1ation be con0e3ne0 to pa7 the petitione1s P::%:::.:: as actual an0 3o1al 0a3a5es an0 P:%:::.:: as penal an0 co3pensato17 0a3a5e an0 P!:%:::.:: as atto1ne7Js fees% on the 51oun0 that the7 ha/e not been in 0efault in the pa73ent of thei1 obli5ation. On Au5ust "% "&$% the 1espon0ent u05e issue0 an o10e1 co33an0in5 the 1espon0ent She1iI an0 the 1espon0ent co1po1ation to 0esist f1o3 p1ocee0in5 6ith the public auction sale of the 3o1t5a5e p1ope1t7 sche0ule0 on Au5ust $% "&$. Afte1 t1ial% the 1espon0ent u05e 1en0e1e0 a 0ecision on Octobe1 !% "&':% the 0ispositi/e po1tion of 6hich 1ea0s as follo6s) 9;,ERE*ORE% 9;,ERE*ORE% u053ent is he1eb7 1en0e1e0 as follo6s) ". The The abo abo/e /e-e -en ntit title0 le0 cas case e is is he he1eb7 o10e o10e11e0 +(SM(SSE+% fo1 lac of suKcient basis . O10e O10e1i 1in5 n5 the the pet petit itio ione ne1s 1s%% oi oint ntl7 l7 an0 an0 se/ se/e1 e1al all7 l7%% to pa7 the su3 eui/alent to " of the total obli5ation 0ue% as 1easonable atto1ne7Js fees !. O10e O10e1i 1in5 n5 peti petiti tion one1 e1s s to pa7 pa7 1espo espon0 n0en entt Ma1 Ma1celo celo Steel Co1po1ation% ointl7 an0 se/e1all7% the su3 of P:%:::.:: as actual e8e3pla17 0a3a5es >. O10e O10e1i 1in5 n5 the the pet petit itio ione ne1s 1s%% oi oint ntl7 l7 an0 an0 se/ se/e1 e1al all7 l7%% to pa7 the costs of the suit. The o10e1 of status status uo issue0 b7 the Cou1t un0e1 0ate of Au5ust "% "&$ is he1eb7 L(*TE+ an0 SET AS(+E% an0 the She1iI of Que4on Cit7 3a7 no6 p1ocee0 6ith the e8t1au0icial fo1eclosu1e fo1eclosu1e of the 3o1t5a5e.9 Petitione1s Petitione1s 1ecei/e0 a cop7 of the 0ecision on Octobe1 "% "&':. On Octobe1 "&% "&':% 1espon0ent co1po1ation le0 6ith 1espon0ent She1iI anothe1 /e1ie0 lette1-petition lette1-petition info13in5 the latte1 of the 0ecision 1en0e1e0 in Ci/il Case No. Q-&!=> an0 p1a7in5 fo1 the e8t1a-u0icial fo1eclosu1e fo1eclosu1e of the 1eal estate 3o1t5a5e. Actin5 on sai0 lette1-petition% lette1-petition% the 1espon0ent She1iI issue0 the necessa17 notices settin5 the public auction sale of the 3o1t5a5e0 p1ope1t7 on +ece3be1 &% "&':. On Octobe1 !:% "&':% petitione1s le0 thei1 notice of appeal% appeal bon0 an0 1eco10 on appeal. On +ece3be1 >% "&':% petitione1s 1ile0 an 9U15ent Motion to Reui1e Respon0ents to +esist *1o3 P1ocee0in5 P1ocee0in5 ;ith The Public Auction Sale of Petitione1sJ P1ope1ties.9 Afte1 1espon0ent 1espon0ent co1po1ation le0 its opposition to sai0 3otion% the 1espon0ent u05e issue0 on +ece3be1 &% "&':% an o10e1 0en7in5 petitione1sJ afo1e3entione0 3otion to stop 1espon0ent She1iI f1o3 p1ocee0in5 6ith the sche0ule0 auction sale of petitione1sJ 3o1t5a5e0 p1ope1t7. On the sa3e 0ate% the 1espon0ent She1iI p1ocee0e0 6ith the auction sale of the 3o1t5a5e0 p1ope1t7% 1espon0ent co1po1ation bein5 the successful bi00e1% an0 issue0 the co11espon0ent ce1ticate of sale 0ate0 +ece3be1 &% "&':. On the sa3e 0ate% +ece3be1 &% "&':% the 1espon0ent #u05e issue0 an o10e1 app1o/in5 app1o/in5 petitione1s petitione1s 1eco10 1eco10 on appeal. On #anua17 "% "&'"% the 1espon0ent co1po1ation le0 in L.R.C. Rec. No. '$=" an in0epen0ent petition fo1 the issuance of a 61it of possession entitle0 9(n the Matte1 of the Petition *o1 (ssuance of ;1it of Possession O/e1 a Pa1cel of Lan0 Co/e1e0 B7 T1ansfe1 Ce1ticate of Title No. >=& of The OKce of The Re5iste1 Of +ee0s of Que4on Cit7 (n The Na3e Of Mo1t5a5o1 Pet1a R. *a1in
Ma11ie0 To Bena3in *a1in Ma1celo Steel Co1po1ation @Mo1t5a5e Petitione19. Petitione19. This petition 6as also assi5ne0 to the 1espon0ent #u05e. Petitione1s 0i0 not le an opposition to sai0 petition. On #anua17 "=% "&'"% the 1espon0ent #u05e issue0 an o10e1 0i1ectin5 the p1esentation an0 sub3ission of e/i0ence befo1e the B1anch Cle1 of Cou1t. Afte1 the 1espon0ent co1po1ation ha0 sub3itte0 its e/i0ence in suppo1t of its petition% the 1espon0ent #u05e issue0 an o10e1 on *eb1ua17 >% "&'"% 51antin5 the petition fo1 the issuance of a 61it of possession. The1eupon% the petitione1s petitione1s le0 the p1esent p1esent petition. Upon these facts% the Cou1t of Appeals hel0 the t1ial cou1t e8cee0e0 its u1is0iction 6hen it 0enie0 the 3otion of the *a1ins seein5 to enoin the fo1eclosu1e sale of thei1 3o1t5a5e0 p1ope1ties inas3uch as the7 ha0 al1ea07 pe1fecte0 thei1 appeal f1o3 the 0ecision 0is3issin5 thei1 petition fo1 p1ohibition a5ainst sai0 sale. Acco10in5 Acco10in5 to the appellate cou1t% since the 1e3e07 pu1sue0 b7 the *a1ins 6as not an o10ina17 action of inunction 6ithin the conte3plation of Section > of Rule !& no1 one fo1 the annul3ent of 3o1t5a5e% but a special ci/il action of p1ohibition% the 0ecision the1ein is not i33e0iatel7 e8ecuto17 as a 3atte1 of 1i5ht but onl7 of soun0 u0icial 0isc1etion un0e1 Section of the sa3e 1ule% an0 consi0e1in5 that the p1e/ailin5 pa1t7 ha0 not e/en 3o/e0 fo1 i33e0iate e8ecution% the t1ial cou1t coul0 not ha/e a/aile0 of its po6e1s un0e1 this last 3entione0 p1o/ision. p1o/ision. (t is uite ob/ious that the Cou1t of Appeals has 3isse0 the point. As a 3atte1 of fact% it is plain that the t1ial cou1t 0i0 not issue an7 o10e1 of e8ecution. The she1iIJs act of p1ocee0in5 6ith the fo1eclosu1e fo1eclosu1e sale 6as not 0one b7 /i1tue of an7 such o10e1 of e8ecution% but pu1suant to his autho1it7 an0 0ut7 un0e1 Act !"! as a3en0e0 b7 Act >""= 5o/e1nin5 the e8t1au0icial e8t1au0icial fo1eclosu1e fo1eclosu1e of 3o1t5a5es% 6hich is si3pl7 to sell the 3o1t5a5e0 p1ope1ties at public auction to the hi5hest bi00e1% upon /e1ie0 petition of the 3o1t5a5ee an0 6ithout the nee0 of an7 u0icial o10e1. o10e1. (n othe1 6o10s% the she1iI 6ent ahea0 not because he 6as so o10e1e0 b7 the cou1t% but p1ecisel7 because the cou1t 1efuse0 to 1est1ain hi3 b7 0is3issin5 1espon0entsJ petition fo1 p1ohibition an0 liftin5 the status uo o10e1 it ha0 p1eli3ina1il7 p1eli3ina1il7 issue0 upon the lin5 of the co3plaint. Un0e1 these ci1cu3stances% the pe1fection of 1espon0entsJ appeal coul0 not b7 itself ha/e ha0 the eIect of 1esto1in5 the status uo o10e1% 6ithout an e8p1ess e8p1ess o10e1 in that sense% 6hich% of cou1se% the cou1t ha0 the po6e1 to issue. The Cou1t has so hel0 as ea1l7 as No/e3be1 "!% "&: in ;atson X Co. /s. En1iue4% foun0 in olu3e ( of the Philippine Repo1ts at pa5es >=: to >=>. The 1ulin5 the1ein 3a0e 6hich is /e17 illu3inatin5 applies fou1-sua1e to the case at ba1. The plaintiI% at the co33ence3ent co33ence3ent of this action action obtaine0 a p1eli3ina17 inunction as p1a7e0 fo1 in its co3plaint. The case 6as afte16a10s t1ie0% an0 in Septe3be1% "&:% a nal u053ent the1ein 6as ente1e0 in fa/o1 of the 0efen0ants an0 the te3po1a17 inunction 6as 0issol/e0. On the :th of Septe3be1 a bill of e8ceptions 6as pe1fecte0 an0 si5ne0 b7 the u05e% an0 a ce1tie0 cop7 the1eof 6as then t1ans3itte0 to this cou1t. (n this cou1t the plaintiI has p1esente0 a 3otion asin5 that the p1eli3ina17 p1eli3ina17 inunction be continue0. Befo1e 0iscussin5 0iscussin5 the po6e1 of this cou1t to 51ant a p1eli3ina17 p1eli3ina17 inunction% un0e1 these ci1cu3stances% it see3s necessa17 to 0ete13ine 6hethe1 o1 not the p1eli3ina17 p1eli3ina17 inunction 51ante0 belo6 6as continue0 in fo1ce b7 the lin5 of the bill of e8ceptions. e8ceptions. A1ticle ">> of the La6 of Ci/il P1oce0u1e% no6 in fo1ce% sa7s) 9But the lin5 of a bill of e8ceptions shall of itself sta7 e8ecution e8ecution until the nal 0ete13ination of the action% unless%9 etc. A1ticle "::' of the Re/ise0 Re/ise0 Statutes of the Unite0 States states the 3anne1 of obtainin5 a
supe1se0eas in cases pen0in5 in the *e0e1al cou1ts. The 3eanin5 of the 6o10 6o10 9supe1se0eas9 as use0 use0 in that section has been 0ene0 as follo6s) 9A supe1se0eas% p1ope1l7 so calle0% is a suspension of the po6e1 of the cou1t belo6 to issue an e8ecution on the u053ent o1 0ec1ee appeale0 f1o3 o1% if a 61it of e8ecution has issue0% it is a p1ohibition e3anatin5 f1o3 the cou1t of appeals a5ainst the e8ecution of the 61it. @,o/e7 /s. Mc+onal0% ":& U.S. ":. As so const1ue0% a1ticle "::' of the Re/ise0 Statutes of the Unite0 States is substantiall7 the eui/alent of ou1 a1ticle ">>. This uestion as to 6hethe1 a supe1se0eas has% in the *e0e1al cou1ts% the eIect of continuin5 in fo1ce an inunction 0issol/e0 b7 the lo6e1 cou1t has f1euentl7 been passe0 upon b7 the Sup1e3e Cou1t. That cou1t has sai0) 9The 9The 5ene1al 1ulin5 is 6ell settle0 that an appeal f1o3 a 0ec1ee 51antin5% 1efusin5% o1 0issol/in5 an inunction 0oes not 0istu1b its ope1ati/e eIect. @,o/e7 /s. Mc+onal0% ":& U.S. ":-"$" Slau5hte1house Cases% ": ;all.% '!-&' Leona10 /s. O4a1 Lan0 Co3pan7% "" U.S.% >$->$=. ;hen an inunction has been 0issol/e0 it can not be 1e/i/e0 e8cept b7 a ne6 e8e1cise of u0icial po6e1% an0 no appeal b7 a 0issatise0 pa1t7 can of itself 1e/i/e it. @. The t1uth is that the case is is not 5o/e1ne0 b7 the o10ina17 1ules that 1elate to a supe1se0eas of e8ecution% e8ecution% but b7 those p1inciples an0 1ules 6hich 1elate to chance17 p1ocee0in5s e8clusi/el7. ... (n this count17 the 3atte1 is usuall7 1e5ulate0 b7 statutes o1 1ules of cou1t% an0% 5ene1all7 speain5% an appeal% upon 5i/in5 the secu1it7 1eui1e0 1eui1e0 la6% 6hen secu1it7 is 1eui1e0% suspen0s fu1the1 p1ocee0in5s an0 ope1ates as a supe1se0eas of e8ecution. ... But the 0ec1ee itself 3a7 ha/e an int1insic eIect 6hich can onl7 be suspen0e0 b7 an aK13ati/e o10e1 eithe1 of the cou1t 6hich 3aes the 0ec1ee o1 of the appellate t1ibunal. This cou1t% in the Slau5hte1house Slau5hte1house Cases% ": ;all.% ;all.% '!% 0eci0e0 that an appeal f1o3 a 0ec1ee 51antin5% 1efusin5% o1 0issol/in5 0issol/in5 an inunction 0oes not 0istu1b its ope1ati/e eIect. M1. #ustice CliIo10% 0eli/e1in5 the opinion of the cou1t% sa7s) 9(t is uite ce1tain that neithe1 an inunction no1 a 0ec1ee 0issol/in5 an inunction passe0 in ci1cuit cou1t is 1e/e1se0 o1 nullie0 b7 an appeal o1 61it of e11o1 befo1e the cause is hea10 in this cou1t.9 (t 6as 0eci0e0 that neithe1 a 0ec1ee fo1 an inunction no1 a 0ec1ee 0issol/in5 an inunction 6as suspen0e0 in its eIect b7 the 61it of e11o1% thou5h all the 1euisites fo1 supe1se0eas 6e1e co3plie0 6ith. (t 6as not 0eci0e0 that the cou1t belo6 ha0 no po6e1% if the pu1pose of ustice 1eui1e0 it% to o10e1 a continuance of the status uo until a 0ecision shoul0 be 3a0e b7 the appellate cou1t% o1 until that cou1t shoul0 o10e1 the cont1a17. This po6e1 un0oubte0l7 e8ists% an0 shoul0 al6a7s be e8e1cise0 e8e1cise0 6hen an7 i11e3e0iable inu17 3a7 1esult f1o3 the 0ec1ee as 1en0e1e0. @ ,o/e7 /s. Mc+onal0% ":&% U.S.% "&. (n Minnesota the supe1se0eas statute p1o/i0e0 that the appeal f1o3 the o10e1 of u053ent shoul0 9sta7 all p1ocee0in5s the1eon an0 sa/e all 1i5hts aIecte0 the1eb7.9 the1eb7.9 The cou1t of this State% 1el7in5 upon the last of the t6o clauses uote0% hel0 that an appeal f1o3 an o10e1 0issol/in5 an inunction continue0 the inunction in fo1ce. The e/ils 6hich 6oul0 1esult f1o3 such a hol0in5 a1e fo1cibl7 pointe0 pointe0 out b7 #u05e Mitchell in a 0issentin5 opinion. ,e sai0) 9Althou5h a plaintiIs pape1s a1e so insuKcient on thei1 face o1 so false in thei1 alle5ations that if he shoul0 appl7 on notice fo1 an inunction% an7 cou1t 6oul0% on a hea1in5% p1o3ptl7 1efuse to 51ant one% 7et% if he can n0 an76he1e in the State a u05e o1 cou1t co33issione1 6ho 6ill i3p1o/i0entl7 i3p1o/i0entl7 51ant one e8 pa1te% 6hich the cou1t on the 1st an0 onl7 hea1in5 e/e1 ha0 0issol/es% he can% b7 appealin5 an0 lin5 bon0% 3ae the e8 pa1te inunction i3pe1/ious to all u0icial inte1fe1ence until the appeal is 0ete13ine0 in this cou1t. ... Such 1esult is so unust an0 so utte1l7 inconsistent 6ith all no6n 1ules euit7 p1actice that no cou1t shoul0 a0opt such a const1uction unless absolutel7 shut up to it b7 the clea1
an0 uneui/ocal lan5ua5e of the statute. @State /s. +uluth St. R7. Co.% >' Minn.% !$&. The sup1e3e cou1t cou1t of that State afte16a10s% afte16a10s% althou5h a0he1in5 to that 0ecision on the 51oun0 of sta1e 0ecisis% state0 that in thei1 opinion it 6as unsoun0. @State e8 1el. Lea17 /s. +ist1ict Cou1t% '= Minn.% >$>. ;e ha/e in these (slan0s no appeal f1o3 o10e1s 51antin5 o1 0issol/in5 p1eli3ina17 inunctions% 7et 6hat 6as sai0 b7 #ustice Mitchell applies to a case 6he1e% upon a full t1ial in a cou1t belo6% the u05e has 0eci0e0 that neithe1 upon the facts no1 the la6 is the plaintiI entitle0 to an7 1elief. To allo6 a plaintiI in such a case% b7 tain5 an appeal an0 5i/in5 a supe1se0eas bon0% to continue an inunction in fo1ce 6oul0 be 3anifestl7 unust. ;e a0opt the 1ule announce0 b7 the Sup1e3e Cou1t of the Unite0 States an0 hol0 that the lin5 of the bill of e8ceptions in the case at ba1 0i0 not ope1ate to 1e/i/e the p1eli3ina17 inunction 6hich 6as 0issol/e0 in an0 b7 the nal u053ent. ;e also a0opt the othe1 conclusion of that cou1t to the eIect that the u05e belo6 has the po6e1% if the pu1poses of ustice 1eui1e it% to o10e1 a continuance of the status uo until a 0ecision shoul0 be 3a0e b7 the appellate cou1t o1 until that cou1t shoul0 o10e1 to the cont1a17. ;e ha/e al1ea07 in eIect 0ecla1e0 that p1inciple in the case of Ma8i3o Co1tes /s. Palanca uti/o% uti/o% 0eci0e0 Au5ust $% "&:. "&:. This 0oct1ine 6as 1eite1ate0 a fe6 fe6 0a7s late1 in Sitia Sitia Teco Teco /s. entu1a% entu1a% " Phil. >&' >&' thus) +u1in5 the pen0enc7 of the suit the plaintiI applie0 fo1 a p1eli3ina17 inunction inunction on the 51oun0% as state0 in the o1al a15u3ent of counsel% that the house place0 b7 the plaintiI upon the lot ha/in5 been 0est1o7e0 b7 o10e1 of the 3unicipalit7 the 0efen0ants 1epossesse0 the3sel/es of the p1e3ises an0 6e1e p1epa1in5 to buil0 a house the1eon. Upon a t1ial of the case u053ent 6as 1en0e1e0 a5ainst the plaintiI on the 3e1its of the suit% an0 the inunction 6as 0issol/e0. The plaintiI has appeale0 the case b7 a bill of e8ceptions an0 has 3a0e application to this cou1t to 1esto1e the inunction on the 51oun0 that the ope1ati/e eIect of the u053ent b7 6hich the inunction 6as 0issol/e0 has% b7 /i1tue of the appeal taen an0 the 5i/in5 of a supe1se0eas bon0% been lost% an0 that the u053ent in the case shoul0 not ha/e the eIect of 0istu1bin5 the inte1locuto17 inunction. (n the case of ;atson ;atson X Co. /s. En1iue4% 0eci0e0 b7 this cou1t Octobe1 $% "&:% it is hel0 that an appeal f1o3 an o10e1 0issol/in5 an inunction 0oes not suspen0 the ope1ation of the 0ecision so as to 1e/i/e the inte1locuto17 inunction. ;e ha0 occasion to 1eaK13 the sa3e 1ulin5 in A5uila1 /s. Tan% G. R. No. L-!$::% 1en0e1e0 in #anua17 !:% "&': !" SCRA :-">. No6% in connection 6ith the issuance b7 the t1ial cou1t% upon 3otion of petitione1 an0 6ithout obection of the *a1ins% of the 61it of possession in the L.R.C. case% the appellate cou1t 1ule0 that the sa3e a3ounte0 to an e8ecution e8ecution of the 0ecision in the ci/il case% an0 such bein5 the case% the t1ial cou1t shoul0 ha/e 0esiste0 f1o3 0oin5 it in /ie6 of the 1espon0entsJ appeal. ;e 0o not a51ee. (t is Ou1 consi0e1e0 opinion that the 61it of possession 6as p1ope1l7 issue0% since% as al1ea07 0iscusse0 abo/e% the fo1eclosu1e fo1eclosu1e p1ocee0in5 con0ucte0 b7 the she1iI 6as not p1e0icate0 on an7 u0icial o10e1. A5ain% the e11oneous pose of the Cou1t of Appeals 1uns counte1 to stan0in5 u1isp1u0ence on the 3atte1. 3atte1. (n +e G1acia /s. San #ose% &> Phil. $!% 6hich is lie6ise on all fou1s 6ith the situation p1esentl7 befo1e Us% the Cou1t hel0)
Petitione1 is the 1e5iste1e0 o6ne1 of the 1eal p1ope1t7 0esc1ibe0 in T1ansfe1 Ce1ticate of Title No. !'!" of the Lan0 Reco10s of the cit7 of Manila% 6hich% b7 6a7 of e8t1au0icial e8t1au0icial fo1eclosu1e of a 3o1t5a5e constitute0 upon the sa3e in fa/o1 of the Rehabilitation *inance Co1po1ation% 6as on No/e3be1 ">% "&% sol0 to the Republic Su1et7 X insu1ance Co.% (nc.% as the hi5hest bi00e1 at a public auction con0ucte0 b7 the she1iI of sai0 cit7 un0e1 a special po6e1 of atto1ne7 attache0 to the 3o1t5a5e 0ee0 an0 pu1suant Act. No. !"!% as a3en0e0 b7 Act No. >""=. Th1ee 0a7s afte1 the sale% the pu1chase1 le0 an e8 pa1te 3otion% 0ul7 /e1ie0% in the fou1 b1anch of the Cou1t of *i1st (nstance of Manila as autho1i4e0 section ' of the sa3e Act% as a3en0e0% p1a7in5 that it be 5i/en possession of the p1ope1t7 0u1in5 the 1e0e3ption pe1io0 an0 oIe1in5 to fu1nish the co11espon0in5 bon0. But befo1e the 3otion coul0 acte0 upon% he1ein petitione1 le0 an opposition the1eto an0 follo6e0 it 6ith a co3plaint fo1 the annul3ent of the sale an0 a 3otion 0is3iss the petition fo1 a 61it of possession o1 to postpone consi0e1ation the1eof until the co3plaint fo1 annul3ent coul0 be 0eci0e0. Bein5 specicall7 e3po6e1e0 b7 the Act to 51ant such 61it on an e8 pa1te 3otion b7 the pu1chase1% the cou1t 1efuse0 to be si0e t1ace0 an0 autho1i4e0 the issuance of the 61it upon the lin5 of a bon0 6ithout p1eu0ice to the 1i5ht of the opposito1 to uestion the /ali0it7 of the sale in the 3anne1 p1o/i0e0 b7 la6. Conten0in5 that the lo6e1 cou1t acte0 6ithout u1is0iction an0 6ith 6ith 51a/e abuse of 0isc1etion 0isc1etion in autho1i4in5 the issuance of the 61it% petitione1 has co3e to this Cou1t fo1 a 61it of ce1tio1a1i an0 p1ohibition. The petition is 6ithout 6ithout 3e1it. Sections ' an0 = of Act No. !L!% as a3en0e0% p1o/i0e) SEC. '. (n an7 sale 3a0e un0e1 the p1o/isions p1o/isions of this Act% the pu1chase1 3a7 petition the Cou1t of *i1st (nstance of the p1o/ince o1 place 6he1e the p1ope1t7 o1 an7 pa1t the1eof is situate0% to 5i/e hi3 possession the1eof 0u1in5 the 1e0e3ption pe1io0% fu1nishin5 bon0 in an a3ount eui/alent to the use of the p1ope1t7 fo1 a pe1io0 of t6el/e 3onths% to in0e3nif7 the 0ebto1 in case it be sho6n that th e sale 6as 3a0e 6ithout /iolatin5 the 3o1t5a5e o1 6ithout co3pl7in5 6ith the 1eui1e3ents 1eui1e3ents of this Act. Such petition shall be 3a0e un0e1 oath an0 le0 in fo13 o1 an e8 pa1te 3otion in the 1e5ist1ation o1 ca0ast1al p1ocee0in5s if the p1ope1t7 is 1e5iste1e0% o1 in special p1ocee0in5s in the case of p1ope1t7 1e5iste1e0 1e5iste1e0 un0e1 the Mo1t5a5e La6 o1 un0e1 section one hun01e0 an0 ninet7-fou1 of the A03inist1ati/e Co0e% o1 of an7 othe1 1eal p1ope1t7 encu3be1e0 6ith a 3o1t5a5e 0ul7 1e5iste1e0 1e5iste1e0 in the oKce of an7 1e5iste1 of 0ee0s in acco10ance 6ith an7 e8istin5 la6% an0 in each case the cle1 of cou1t shall% upon the lin5 of such petition% collect the fees specie0 in pa1a51aph ele/en of section one hun01e0 an0 fou1teen of Act Nu3be1e0 *ou1 hun01e0 an0 ninet7 si8% as a3en0e0 b7 Act Nu3be1e0 T6ent7-ei5ht hun01e0 an0 si8t7-si8% an0 the cou1t shall% upon app1o/al of the bon0% o10e1 that a 61it of possession issue a001esse0 to the she1iI of the p1o/ince in 6hich the p1ope1t7 is situate0% 6ho shall e8ecute sai0 o10e1 i33e0iatel7. SEC. =. The 0ebto1 3a7% in the p1ocee0in5s p1ocee0in5s in 6hich 6hich possession 6as 1eueste0 but not late1 than thi1t7 0a7s afte1 the pu1chase1 6as 5i/en possession% petition that the sale be set asi0e an0 the 61it of possession cancelle0% specif7in5 specif7in5 the 0a3a5es suIe1e0 b7 hi3% because the 3o1t5a5e 6as not /iolate0 o1 the sale 6as not 3a0e in acco10ance 6ith the p1o/isions he1eof% an0 the cou1t shall tae co5ni4ance of this petition in acco10ance 6ith the su33a17 p1oce0u1e p1o/i0e0 p1o/i0e0 fo1 in section one hun01e0 an0 t6el/e of Act Nu3be1e0 *ou1 hun01e0 an0 ninet7-si8 ninet7-si8 an0 if it n0s the co3plaint of the 0ebto1 ustie0% it shall 0ispose in his fa/o1 of all o1 pa1t of the bon0 fu1nishe0 b7 the pe1son
6ho obtaine0 possession. Eithe1 of the pa1ties 3a7 appeal f1o3 the o10e1 of the u05e in acco10ance 6ith section fou1teen of Act Nu3be1e0 *ou1 hun01e0 an0 ninet7-si8 but the o10e1 of possession shall continue in eIect 0u1in5 the pen0enc7 of the appeal. As 3a7 be seen% the la6 e8p1essl7 e8p1essl7 autho1i4es the pu1chase1 to petition fo1 a 61it of possession 0u1in5 the 1e0e3ption pe1io0 b7 lin5 an e8 pa1te 3otion un0e1 oath fo1 that pu1pose in the co11espon0in5 co11espon0in5 1e5ist1ation o1 ca0ast1al p1ocee0in5 in the case of p1ope1t7 6ith To11ens To11ens title title an0 upon the lin5 of such such 3otion an0 the app1o/al of the co11espon0in5 bon0% the la6 also in e8p1ess te13s 0i1ects the cou1t to issue the o10e1 fo1 a 61it of possession. Un0e1 the le5al p1o/isions abo/e copie0% the o10e1 fo1 a 61it of possession issues as a 3atte1 of cou1se upon the lin5 of the p1ope1 3otion an0 the app1o/al of the co11espon0in5 bon0. No 0isc1etion 0isc1etion is left to the cou1t. An0 an7 uestion 1e5a10in5 1e5a10in5 the 1e5ula1it7 1e5ula1it7 an0 /ali0it7 of the sale @an0 the conseuent cancellation of the 61it is left to be 0ete13ine0 in a subseuent p1ocee0in5 as outline0 in section =. Such uestion is not to be 1aise0 as a ustication fo1 opposin5 the issuance of the 61it of possession% since% un0e1 the Act% the p1ocee0in5 fo1 this is e8 pa1te. (t thus appea1 that the 1espon0ent #u05e% in o10e1in5 the issuance of a 61it of possession in this case% 3e1el7 obe7e0 an e8p1ess 3an0ate of the la6 in the 3anne1 an0 upon the te13s the1ein p1o/i0e0% an0 petitione1 3a7 not co3plain that he has been 0ep1i/e0 of a substantial 1i5ht 6ithout 0ue p1ocess% because the o10e1 states that it is to be 96ithout p1eu0ice to the 1i5hts of the opposito1 to uestion the /ali0it7 of the abo/e 3entione0 sale in the 3anne1 p1o/i0e0 b7 la6. ,a/in5 3e1el7 follo6e0 an e8p1ess p1o/ision of the la6% 6hose /ali0it7 is not uestione0% the #u05e cannot be cha15e0 6ith ha/in5 acte0 6ithout u1is0iction o1 6ith 51a/e abuse of 0isc1etion. The 1ule that the pu1chase1 at a u0icial public auction is not entitle0 to possession 0u1in5 the pe1io0 of 1e0e3ption is not applicable to a sale un0e1 Act No. !"! 6he1e the 51antin5 of sai0 possession e8p1essl7 autho1i4e0. ... As 3a7 be 5leane0 f1o3 the fo1e5oin5 0isse1tation of #ustice Ale8 Re7es fo1 the Cou1t% e/en the 3ain 1e3e07 of p1ohibition sou5ht b7 the *a1ins 6as uncalle0 fo1. The plain% spee07 an0 a0euate a0euate an0 e/en 3o1e e8pe0itious 1e3e07 a/ailable a/ailable to the3 6as that specicall7 p1o/i0e0 p1o/i0e0 fo1 in Section = of Act !"!% as a3en0e0% uote0 in the opinion% 6hich is b7 the su33a17 petition un0e1 Section "" of Act >&$% the Lan0 Re5ist1ation Act. ;e su13ise that the issue of alle5e0 usu17 1aise0 b7 1espon0ents 3ust ha/e been consi0e1e0 b7 the t1ial u05e 6ho also 0eci0e0 the ci/il case in 6hich sai0 0efense 6as 1aise0 as not substantial enou5h to 6a11ant its bein5 taen up in an o10ina17 action outsi0e of the lan0 cou1t. PREM(SES CONS(+ERE+% CONS(+ERE+% the 0ecision of the Cou1t of Appeals un0e1 1e/ie6 is 1e/e1se0 an0 the petition fo1 ce1tio1a1i le0 b7 the 1espon0ent *a1ins the1ein is 0is3isse0% 6ith costs a5ainst sai0 1espon0ents. 2al0i/a1 @Chai13an% *e1nan0o% Antonio% *e1nan0e4 an0 Auino% ##.% concu1.
Republic Republic of the Philippines SUPREME COURT Manila SECON+ +((S(ON G.R. No. L-=! No/e3be1 % "&= P,(L(PP(NE NAT(ONAL BAN<% petitione1% /s. ,on. M(+PANTAO A+(L% in his capacit7 as P1esi0in5 #u05e of the C*( (loilo% (loilo% B1anch ((% an0 the ,E(RS ,E(RS O* T,E LATE TEO+ORO TEO+ORO MELL(2A Co3pose0 of ANGEL(NA LOBATON +A. +E MELL(2A% etc.% ROSEMAR(E C,ANG% RAMUN+O TEO+ORO MELL(2A% #R.% MAR(LN MELL(2A% #OSE TEO+ORO TEO+ORO MELL(2A% et al.% 1espon0ents. 1espon0ents. #uan L. +ia4% Ra3on Ra3on *. *. A/ia0o A/ia0o an0 (si01o *. Real% #1.% #1.% fo1 petitione1. Eu5enio O. O1i5inal fo1 1espon0ents.
+E CASTRO% #) This is a special special ci/il action fo1 fo1 ce1tio1a1i ce1tio1a1i 6hich sees to annul the se/e1al inuncti/e o10e1s issue0 b7 1espon0ent u05e% an0 p1a7in5 that% instea0% the 61it of possession issue0 in fa/o1 of petitione1% as pu1chase1 in the fo1eclosu1e fo1eclosu1e sale% 0ate0 Ap1il :% "&'&% be i33e0iatel7 enfo1ce0. (t appea1s that on JAu5ust % "&'>% 1espon0ent An5elina Lobaton Melli4a% fo1 he1self an0 as u0icial a03inist1at1i8 of the estate of Teo0o1o U7 Melli4a% obtaine0 a loan f1o3 petitione1 in the a3ount of P=:%:::.:: 6hich 6as secu1e0 b7 a 3o1t5a5e o/e1 t6o pa1cels of lan0 co/e1e0 b7 TCT Nos. =$$ an0 T-=$'% *o1 failu1e failu1e of sai0 1espon0ent to pa7 the loan on 3atu1it7% the 3o1t5a5e 6as fo1eclose0 fo1eclose0 e8t1au0iciall7 on *eb1ua17 "$% "&'$ at 6hich fo1eclosu1e sale% petitione1 pu1chase0 the p1ope1ties fo1 P&'%&!.'!. P&'%&!.'!. The p1ope1ties 6e1e not 1e0ee3e0 6ithin the pe1io0% hence the title o/e1 the sa3e 6e1e consoli0ate0 in the na3e of petitione1% an0 conseuentl7 TCT .Nos. T-:> T-:> an0 T-:>! T-:>! 6e1e 6e1e issue0 in its na3e on #une $% $% "&'=. On Ap1il "&% "&'&% petitione1 le0 an e8-pa1te petition fo1 issuance of a 61it of possession befo1e the Cou1t of *i1st (nstance of (loilo% B1anch ((% 6hich 6as 51ante0 b7 an o10e1 0ate0 Ap1il :% "&'&. Upon issuance of the 61it% the +eput7 She1iI se1/e0 the sa3e upon p1i/ate 1espon0ents% but the latte1 1eueste0 fo1 a 51ace pe1io0 of se/en @' 0a7s to /acate the p1e3ises in uestion to 6hich the She1iI a51ee0. On Ma7 =% "&'&% the She1iI 1etu1ne0 to the p1e3ises in uestion an0 n0in5 that p1i/ate 1espon0ents a1e still sta7in5 in the p1e3ises an0 ha0 not co3plie0 6ith the 61it of possession% i33e0iatel7 o10e1e0 o10e1e0 thei1 eect3ent. At a1oun0 one oJcloc in the afte1noon% befo1e the eect3ent 6as co3plete0% the She1iI 1ecei/e0 an o10e1 0ate0 Ma7 =% "&'&% issue0 3otu p1op1io b7 1espon0ent u05e% suspen0in5 the i3ple3entation i3ple3entation of the 61it of possession fo1 9hu3anita1ian 1easons9 fo1 a pe1io0 of fteen @" 0a7s. Befo1e the e8pi1ation of the fteen @" 0a7 pe1io0% p1i/ate 1espon0ents le0 a co3plaint 0ate0 Ma7 ">% "&'& fo1 the annul3ent of the e8t1au0icial e8t1au0icial fo1eclosu1e% 61it of possession an0 consoli0ation of o6ne1ship on 51oun0 that the p1ope1ties 6e1e fo1eclose0 fo1eclose0 6ithout pe1sonal notice to an7 of the p1i/ate 1espon0ents. The co3plaint 6as 0ocete0 as Ci/il Case No. "=&> an0 6as assi5ne0 to the Cou1t of *i1st (nstance of (loilo% B1anch . Upon 3otion of p1i/ate 1espon0ents 9to consoli0ate the t1ial of the t6o cases%9 the P1esi0in5 #u05e of sai0 B1anch% in an o10e1 0ate0 Ma7 >% "&'&% t1ansfe11e0 t1ansfe11e0 the case of B1anch ((% p1esi0e0 b7 1espon0ent u05e. (n the p1ocee0in5 fo1 the 61it of possession% p1i/ate 1espon0ents le0 a 3otion fo1 1econsi0e1ation 1econsi0e1ation of the o10e1 51antin5 the 61it of possession% 6hile petitione1 le0 a 3otion to 0ecla1e p1i/ate 1espon0ents in
conte3pt fo1 1efusal to /acate the p1e3ises% 6hich 3otions 6e1e o10e1e0 b7 1espon0ent u05e hel0 in abe7ance pen0in5 the 1esolution of the p1eu0icial uestion 1aise0 b7 p1i/ate 1espon0ents in Ci/il Case No. "=&>. On #une "% "&'&% 1espon0ent u05e% actin5 on p1i/ate 1espon0entsJ p1a7e1 fo1 inunction% issue0 an o10e1 1est1ainin5 petitione1 f1o3 f1o3 0istu1bin5 the status uo% an0 on #ul7 % "&'&% 1espon0ent u05e issue0 an o10e1 51antin5 the 61it of p1eli3ina17 p1eli3ina17 inunction. Subseuentl7% petitione1 le0 the follo6in5) " Motion to Reui1e PlaintiI to +eposit (nco3eH*1uits of the +ispute0 P1ope1t7 0ate0 #ul7 $% "&'& Motion fo1 Reconsi0e1ation Reconsi0e1ation of the o10e1 of #ul7 % "&'& 0ate0 #ul7 "'% "&'& an0 ! Motion to +is3iss% the Co3plaint 0ate0 Au5ust % "&'&. The 1st t6o 3otions 6e1e 0enie0 b7% 1espon0ent u05e on Au5ust "!% "&'&% an0 the last 3otion% on No/e3be1 % "&'&. As coul0 1ea0il7 be seen% the 3ain uestion is 6hethe1 o1 not 1espon0ent u05e 51a/e abuse0 his 0isc1etion% a3ountin5 to lac of u1is0iction. in issuin5 the o10e1s 0ate0 Ma7 =% "&'&% #une "% "&'&% #ul7 % "&'& an0 Au5ust "!% "&'& all of 6hich% in eIect% enoine0 the enfo1ce3ent of the 61it of possession. The petitione1 sustains the aK13ati/e% conten0in5 that since pu1suant to +e los An5eles /s. Cou1t of Appeals% et al. " citin5 +e G1acia /s. San #ose% &> Phil. $'% it is 3iniste1ial upon the cou1t to issue a 61it of possession in fa/o1 of the pu1chase1 in a fo1eclosu1e sale of a 3o1t5a5e0 p1ope1t7% it follo6s that the e8ecution e8ecution of the 61it of possession cannot be suspen0e0% 3uch less% 1est1aine0 b7 1espon0ent u05e. (t also conten0s that% as pu1chase1% it beco3es the o6ne1 of the p1ope1t7 entitle0 to us possi0en0i as p1o/i0e0 in A1ticle >= of the Ci/il Co0e. (t is% ho6e/e1% clai3e0 b7 p1i/ate 1espon0ents that 1espon0ent u05e% cont1a17 to petitione1Js sub3ission% acte0 6ithin his autho1it7% alle5in5 that pu1suant to Section of Rule "! of the Rules of Cou1t% the cou1t has inhe1ent po6e1 to 9a3en0 an0 cont1ol @the cou1tJs p1ocesses an0 o10e1 so as to 3ae the3 confo13able to la6 an0 ustice.9 The7 fu1the1 clai3e0 that the case cite0 b7 petitione1 is not applicable because in the instant case the 61it has al1ea07 been issue0. Petition shoul0 be 51ante0. Section > of P.+. No. != 91eui1in5 5o/e1n3ental nancial institutions to fo1eclosu1e fo1eclosu1e 3an0ato1il7 all loans 6ith a11ea1a5es% inclu0in5 inte1est an0 cha15es a3ountin5 to at least : of the total outstan0in5 obli5ations%9 p1o/i0es) Section >. As a 1esult of fo1eclosu1e o1 an7 othe1 le5al p1ocee0in5s 6he1ein 6he1ein the p1ope1ties of the 0ebto1 6hich a1e fo1eclose0% fo1eclose0% attache0% o1 le/ie0 upon in satisfaction of a u053ent a1e sol0 to a 5o/e1n3ent nancial institution% the sai0 p1ope1ties shall be place0 in the possession an0 cont1ol of the nancial institution conce1ne0% 6ith the assistance of the A13e0 *o1ces *o1ces of the Philippines 6hene/e1 necessa17. The Petition fo1 ;1it of Possession Possession shall be acte0 upon b7 the cou1t 6ithin fteen @" 0a7s f1o3 the 0ate of lin5. Pu1suant to the abo/e p1o/ision% it is 3an0ato17 fo1 the cou1t to place the 5o/e1n3ent nancial institution% 6hich petitione1 is% in the possession an0 cont1ol of the p1ope1t7. As state0% the sai0 0ec1ee 6as enacte0 9in o10e1 to eIect the ea1l7 collection of 0elinuent loans f1o3 5o/e1n3ent nancial institutions an0 enable the3 to continue eIecti/el7 nancin5 the 0e/elop3ent nee0s of the count179 6ithout bein5 ha3pe1e0 b7 actions b1ou5ht to the cou1ts b7 bo11o6e1s. Also% Section $ of Act No. !"!% as a3en0e0 b7 Act >""=% the la6 that 1e5ulates the 3etho0s aIectin5 e8t1au0icial e8t1au0icial fo1eclosu1e of 3o1t5a5e p1o/i0es that in cases in 6hich an e8t1au0icial e8t1au0icial sale is 3a0e% 91e0e3ption shall be 5o/e1ne0 b7 the p1o/isions of
sections fou1 hun01e0 an0 si8t7-fou1 to fou1 hun01e0 an0 si8t7-si8% inclusi/e% of the Co0e of Ci/il P1oce0u1e P1oce0u1e insofa1 as these a1e not inconsistent 6ith the p1o/isions p1o/isions of this Act.9 @Sections >$>->$$ of the Co0e of Ci/il P1oce0u1e 6e1e supe1se0e0 b7 Sections -' an0 Section !" of Rule !& of the Rules of Cou1t 6hich in tu1n 6e1e 1eplace0 b7 Sections & to !" an0 Section ! of Rule !& of the Re/ise0 Rules of Cou1t. Section ! 6hich is one of the specic p1o/isions applicable to the case at ba1 p1o/i0es that 9if no 1e0e3ption be 3a0e 6ithin t6el/e @" 3onths afte1 the sale% the pu1chase1% o1 his assi5nee% is entitle0 to a con/e7ance an0 possession of p1ope1t7. ... . The possession of the p1ope1t7 shall be 5i/en to the pu1chase1 o1 last 1e0e3ptione1 b7 the oKce1 unless a thi10 pa1t7 is actuall7 hol0in5 the p1ope1t7 a0/e1sel7 to the u053ent 0ebto1.9 0ebto1.9 The 1ule% the1efo1e% the1efo1e% is that afte1 afte1 the 1e0e3ption pe1io0 pe1io0 has e8pi1e0% the pu1chase1 of the p1ope1t7 has the 1i5ht to be place0 in possession the1eof. the1eof. Acco10in5l7% it is the inescapable 0ut7 of the She1iI to enfo1ce the 61it of possession% especiall7% especiall7% as in this case% a ne6 title has al1ea07 been issue0 in the na3e of the pu1chase1% (n fact% un0e1 Section ' of the sai0 Act !"!% upon 6hich the 0e los An5eles an0 0e G1acia cases 6e1e base0% e/en befo1e the 1e0e3ption pe1io0% it is 3iniste1ial upon the cou1t to issue a 61it of possession in fa/o1 of a pu1chase1% p1o/i0e0 that a p1ope1 3otion has been le0% a bon0 app1o/e0% an0 no thi10 pe1son is in/ol/e0. The 1i5ht of the pu1chase1 pu1chase1 to be place0 in the possession of the p1ope1t7 is bolste1e0 b7 Section = of the afo1ecite0 Act 6hich p1o/i0es p1o/i0es that if the u05e n0s the co3plaint assailin5 the le5alit7 of the fo1eclosu1e sale ustie0% it shall not t1ansfe1 the possession of the p1ope1t7% e/en on appeal% but 6ill onl7 p1ocee0 a5ainst the bon0 poste0 b7 the pu1chase1. pu1chase1. Section = 1ea0s) The 0ebto1 3a7% in the p1ocee0in5s p1ocee0in5s in 6hich possession 6as 1eueste0 but not late1 than thi1t7 0a7s afte1 the pu1chase1 6as 5i/en possession% petition that the sale be set asi0e an0 the 61it of possession cancelle0% specif7in5 specif7in5 the 0a3a5es suIe1e0 b7 hi3% because the 3o1t5a5e 6as not /iolate0 o1 the sale 6as not 3a0e in acco10ance 6ith the p1o/isions the1eof% an0 the cou1t shall tae co5ni4ance of this petition in acco10ance 6ith the su33a17 p1oce0u1e p1oce0u1e p1o/i0e0 fo1 in section one hun01e0 an0 t6el/e of Act Nu3be1e0 *ou1 ,un01e0 an0 Ninet7-Si8% Ninet7-Si8% an0 if it n0s the co3plaint of the 0ebto1 ustie0% it shall 0ispose in his fa/o1 of all o1 pa1t of the bon0 fu1nishe0 b7 the pe1son 6ho obtaine0 possession. Eithe1 of the pa1ties 3a7 appeal f1o3 the o10e1 of the u05e in acco10ance 6ith sections fou1teen of act nu3be1e0 *ou1 ,un01e0 an0 Ninet7-Si8. (n the case at ba1% the 61it of possession 6as issue0 but its enfo1ce3ent 6as suspen0e0 b7 the 51ace pe1io0 5i/en b7 the She1iI 6ho has no autho1it7 to 0o so% an0 late1 b7 the o10e1 of the u05e on a /e17 0ubious 51oun0 as 9hu3anita1ian 1eason.9 (f the applicable la6s clea1l7 allo6 the pu1chase1 to ha/e possession of the p1ope1t7 fo1eclose0 an0 3an0ate the cou1t to 5i/e eIect to such 1i5ht% it 6oul0 be a 51oss e11o1 fo1 the u05e to suspen0 the i3ple3entation of the 61it of possession% 6hich% as sho6n% shoul0 issue as a 3atte1 of cou1se. ;e a1e of the opinion that once the 61it of possession has been issue0% the Cou1t has no alte1nati/e but to enfo1ce the 61it 6ithout 0ela7% especiall7 as in this case% no 3otion fo1 the suspension of the enfo1ce3ent 6as le0. The 1i5ht of the petitione1 petitione1 to the possession of the the p1ope1t7 is clea1l7 unassailable. (t is foun0e0 on its 1i5ht of o6ne1ship. As the pu1chase1 of the p1ope1ties in the fo1eclosu1e sale% an0 to 6hich the 1especti/e titles the1eto ha/e al1ea07 been issue0% petitione1Js 1i5ht o-%%e1 the p1ope1t7 has beco3e absolute% /estin5 upon hi3 the 1i5ht of possession o/e1 an eno73ent of the p1ope1t7 6hich the Cou1t 3ust ai0 in eIectin5 its 0eli/e17. Afte1 such 0eli/e17% the pu1chase1 beco3es
the absolute o6ne1 of the p1ope1t7. As ;e sai0 % in Tan Soo ,uat /s. On56ico% ! the 0ee0 of con/e7ance entitle0 the pu1chase1 to ha/e an0 to hol0 the pu1chase0 p1ope1t7% this 3eans% that the pu1chase1 is entitle0 to 5o i33e0iatel7 upon the 1eal p1ope1t7% an0 that it is the She1iIJs inescapable 0ut7 to place hi3 in such possession. Respon0ents Respon0ents cannot clai3 that the 61it of possession 6as suspen0e0 un0e1 the autho1it7 set fo1th in Rule ""! of the Rules of Cou1t. To in/oe the po6e1 51ante0 the1ein% the cou1t 3ust act 6ithin the la6 an0 6ith ustice. ;hen the 1eason 5i/en b7 the u05e in issuin5 the o10e1 of suspension 6as not specie0 in the o10e1% but state0 onl7 in 5ene1al te13% as 9hu3anita1ian 1easons%9 1easons%9 the Cou1t 0i0 not act 6ithin the boun0s of the la6. The o10e1 6as% fu1the13o1e% issue0 3otu p1op1io an0 6ithout the petitione1 bein5 aIo10e0 the 1i5ht to p1esent its si0e. ;e cannot 5i/e Ou1 app1o/al to the actuation of 1espon0ent u05e% fo1 an o10e1 suspen0in5 the i3ple3entation of an ea1lie1 o10e1 is lie an inunction 6hich 3ust be issue0 al6a7s 6ith ci1cu3spection% ci1cu3spection% an0 upon p1ope1 3otion of the pa1t7 conce1ne0. As it is% the suspension o10e1 has a fa1-1eachin5 fa1-1eachin5 eIect. (t enable0 p1i/ate 1espon0ents to 6ithhol0 the possession f1o3 petitione1 an0 le the co3plaint 6he1e an inunction 6as sou5ht. ,a0 not 1espon0ent u05e issue0 such o10e1% petitione1 coul0 ha/e al1ea07 taen taen possession of the p1ope1t7% the1eb7 acui1in5 an absolute o6ne1ship o/e1 the p1ope1t7% an0 inunction coul0 no lon5e1 ha/e been issue0. A p1ohibito17 inunction cannot be issue0 6hen the act sou5ht to be enoine0 has al1ea07 been co33itte0. > Neithe1 can a 3an0ato17 inunction issue% fo1 it is a 6ell-settle0 1ule that inunction 6ill not lie to tae the p1ope1t7 out of cont1ol of the pa1t7 in possession. The o10e1s of the u05e enoinin5 the enfo1ce3ent enfo1ce3ent of the 61it of possession a1e /ulne1able to attac. *i1stl7% *i1stl7% the 1i5ht of p1i/ate 1espon0ents to inuncti/e o10e1 is% at least% 0oubtful% an0 it is a settle0 1ule that to be entitle0 to the inunction% the applicantJs 1i5ht o1 title 3ust be clea1 an0 unuestione0. (n the instant case% the 51oun0 1elie0 upon b7 p1i/ate 1espon0ents is not in0ubitable% 6hile the fo1eclosu1e fo1eclosu1e p1ocee0in5 has in its fa/o1 the p1esu3ption of 1e5ula1it7. An0 secon0l7% P.+. No. !=% as afo1estate0% 3aes it 3an0ato17 fo1 the cou1t to place a 5o/e1n3ent nancial institution in possession of the p1ope1t7. To enoin PTB f1o3 tain5 possession of the p1ope1t7 6oul0 be to 1en0e1 nu5ato17 the p1o/isions of sai0 0ec1ee% pa1ticula1l7 Section the1eof) the1eof) Section . No 1est1ainin5 1est1ainin5 o10e1% te3po1a17 o1 pe13anent in. unction shall be issue0 b7 the cou1t a5ainst an7 5o/e1n3ent nancial institution in an7 action taen b7 such institution in co3pliance 6ith the 3an0ato17 fo1eclosu1e p1o/i0e0 in Section " he1eof% 6hethe1 such 1est1ainin5 o10e1% te3po1a17 o1 pe13anent inunction is sou5ht b7 the bo11o6e1@s o1 an7 thi10 pa1t7 o1 pa1ties% e8cept afte1 0ue hea1in5 in 6hich it is establishe0 b7 the bo11o6e1 an0 a03itte0 b7 the 5o/e1n3ent nancial institution conce1ne0 that t6ent7 pe1cent @: of the outstan0in5 a11ea1a5es a11ea1a5es has been pai0 afte1 the 1in5 of fo1eclosu1e fo1eclosu1e p1ocee0in5s. (n case a 1est1ainin5 o10e1 o1 inunction is issue0 the bo11o6e1 bo11o6e1 shall ne/e1theless be le5all7 obli5ate0 to liui0ate the 1e3ainin5 balance of the a11ea1a5es% a11ea1a5es% pa7in5 ten pe1cent @": of the a11ea1a5es outstan0in5 as of the ti3e of fo1eclosu1e% plus inte1est an0 othe1 cha15es% on e/e17 succee0in5 thi1tieth @!:th 0a7 afte1 the issuance of such 1est1ainin5 o10e1 o1 inunction until the enti1e a11ea1a5es ha/e been liui0ate0. These shall be in a00ition to the pa73ent of a3o1ti4ations cu11entl7 3atu1in5. The 1est1ainin5 o10e1 o1 inunction shall auto3aticall7 be 0issol/e0 shoul0 the bo11o6e1 fail to 3ae an7 of the abo/e-3entione0
pa73ents on 0ue 0ates% an0 no 1est1ainin5 o10e1 o1 inunction shall be issue0 the1eafte1. the1eafte1. This shall be 6ithout p1eu0ice to the e8e1cise b7 the 5o/e1n3ent nancial institutions of such 1i5hts an0Ho1 1e3e0ies a/ailable to the3 un0e1 thei1 1especti/e cha1te1s an0 thei1 1especti/e cont1acts 6ith thei1 0ebto1s% no1 shoul0 this p1o/ision be const1ue0 as 1est1ictin5 the 5o/e1n3ent nancial institutions conce1ne0 f1o3 app1o/in5% solel7 at its o6n 0isc1etion% an7 1est1uctu1in5% 1est1uctu1in5% 1ecapitali4ation% o1 an7 othe1 a11an5e3ent that 6oul0 place the enti1e account on a cu11ent cu11ent basis% p1o/i0e0% ho6e/e1% that at least t6ent7 pe1cent @: of the a11ea1a5es outstan0in5 at the ti3e of the fo1eclosu1e fo1eclosu1e is pai0. All 1est1ainin5 o10e1s an0 inunctions e8istin5 as of the 0ate of this +ec1ee on fo1eclosu1e fo1eclosu1e p1ocee0in5s le0 b7 sai0 5o/e1n3ent nancial institutions shall be consi0e1e0 lifte0 unless nall7 1esol/e0 1esol/e0 b7 the cou1t 6ithin si8t7 @$: 0a7s f1o3 0ate he1eof. ;,ERE*ORE% u053ent is he1eb7 1en0e1e0 annullin5 an0 settin5 asi0e all the inuncti/e o10e1s issue0 b7 1espon0ent u05e 0ate0 Ma7 =% "&'&% #une "% "&'&% #ul7 % "&'& an0 Au5ust "!% "&'& an0 o10e1in5 1espon0ent u05e to place petitione1 petitione1 in possession of the the pu1chase0 p1ope1t7 6ithout 0ela7. ;ithout cost. SO OR+ERE+. Maasia1% Concepcion% #1.% Gue11e1o an0 Escolin% ##.% concu1. Aba0 Santos% #.% too no pa1t.
Republic Republic of the Philippines SUPREME COURT Manila
afte1 the o10e1 of #une % "&$ in the 1st case @Ci/il Case >''=% atte3pt 6as e/e1 3a0e b7 appellant to cu1e the 0efects so pointe0l7 e8p1esse0 b7 the cou1t in that o10e1.
EN BANC G.R. No. L-":""
Au5ust !:% "&$'
(SABEL OCAMPO% plaintiI-appellant% /s. (GNAC(O +OMALANTA an0 PONC(ANO MART(NE2% in his capacit7 as P1o/incial She1iI of Ca/ite% 0efen0antsappellees. A1tu1o M. Topacio% #1. fo1 plaintiI-appellant. Teo0o1o Teo0o1o O. O. +o3alanta fo1 0efen0ant-appellee. 0efen0ant-appellee. SANC,E2% #.) Sole uestion 1aise0 on appeal is this) (s a cou1t o10e1 con13in5 a she1iIJs sale upon a u053ent in a 1eal estate fo1eclosu1e fo1eclosu1e case a ba1 to a subseuent action b7 the u053ent 0ebto1 to annul the sale upon 51oun0s 6hich 6e1e 1aise0 in sai0 fo1eclosu1e p1ocee0in5sV *i1st% to the bac51oun0 facts. A conteste0 case to fo1eclose fo1eclose a 1eal estate an0 chattel 3o1t5a5e YCi/il Case >''=% Cou1t of *i1st (nstance of Manila% 9(5nacio +o3alanta% plaintiI /s. (sabel O. 0a. 0e Chi Chioco% et al.% 0efen0ants9Z% 1esulte0 in u053ent o10e1in5 appellant (sabel O. 0a. 0e Chi Chioco @no6 no6n as (sabel Oca3po to pa7 appellee (5nacio +o3alanta P%:::.::% P%:::.::% 6ith " inte1est pe1 3onth f1o3 +ece3be1 % "&= until full pa73ent% an0 P::.:: as atto1ne7sJ fees% an0 0i1ectin5 that afte1 failu1e to pa7 the abo/e a3ounts in ninet7 0a7s% the p1ope1ties 3o1t5a5e0 be sol0 at public auction% subect to a 1st 3o1t5a5e in fa/o1 of the Philippine National Ban in 1efe1ence to appellantJs lan0 @locate0 in Tan4a% Tan4a% Ca/ite 3o1t5a5e0." The u053ent 0ebt 1e3aine0 1e3aine0 unpai0. The cou1t% on +o3alantaJs 3otion% issue0 a 61it of e8ecution. e8ecution. Pu1suant the1eto% on Ma7 =% "&$% appellee she1iI sol0 at public auction the 3o1t5a5e0 lan0 of !%= sua1e sua1e 3ete1s to the hi5hest bi00e1% appellee (5nacio +o3alanta% fo1 P!%!'.::. +o3alanta 3o/e0 to con13 the sale. O/e1 appellantJs obection% the cou1t% on #une % "&$% con13e0. Afte1 Afte1 the #une % "&$ o10e1 ha0 beco3e nal% appellant sta1te0 the p1esent suit @Ci/il Case N->&$ of the Cou1t of *i1st (nstance of Ca/ite% entitle0 9(sabel Oca3po% plaintiI /s. (5nacio +o3alanta an0 Ponciano Ma1tine4 an his capacit7 as P1o/incial P1o/incial She1iI of Ca/ite% 0efen0ants9 to annul the she1iIJs sale. G1oun0s) Appellant 3o1t5a5o1 6as not p1ope1l7 notie0 of the fo1ecloseu1e fo1ecloseu1e sale an0 the p1ice fo1 6hich the p1ope1t7 6as sol0 6as 9/e17 3uch lo6e1 than the actual 3a1et /alue9 an0 shocin5 to the conscience% an0 thus in/ali0. Appellee +o3alanta 3o/e0 to 0is3iss the co3plaint belo6. ,is 1eason% inte1 alia) 1es u0icata. The cou1t% on No/e3be1 No/e3be1 &% "&$% 0is3isse0 0is3isse0 the case 96ith p1eu0ice an0 6ith costs a5ainst the plaintiI.9 A 3o/e to 1econsi0e1 6as th6a1te0 belo6 in the o10e1 of No/e3be1 "% "&$. ,ence% this appeal. ". A0/e1te0 to ea1lie1 is that the #une % "&$ o10e1 of con13ation of the she1iIJs sale in the 1st case ? Case >''= ? 6as issue0 o/e1 appellantJs opposition. That obection p1oecte0 p1oecte0 befo1e the cou1t cou1t the /e17 sa3e 51oun0s 1elie0 upon in the co3plaint he1ein ? the secon0 case ? to 6it% lac of notice b7 the P1o/incial She1iI to appellant of the fo1eclosu1e sale% an0 i11e5ula1ities i11e5ula1ities in the auction sale an0 nonconfo13it7 the1eof the1eof to the 1ules of cou1t. Acco10in5 to the o10e1 of con13ation% the th1ust of appellantJs sai0 obection is that she 96as not notie0 of th e she1iIJs sale an0 that the p1ice fo1 6hich the p1ope1t7 6as sol0 is unconscionable.9 But these factual alle5ations% so the sa3e in o10e1 of #une % "&$ st1esses% st1esses% 9ha/e not been establishe0 b7 an7 e/i0ence%9 no1 6as appellantJs opposition /e1ie0. Nothin5 in the 1eco10 1eco10 su55ests that
. La6 an0 u1isp1u0ence ha/e fo13ulate0 the 1ule that con13ation of sale of 1eal estate in u0icial fo1eclosu1e p1ocee0in5s cuts oI all inte1ests of the 3o1t5a5o1 in the 1eal estate sol0 an0 /ests the3 in the pu1chase1. pu1chase1. Con13ation Con13ation 1et1oacts to the 0ate of the sale. An o10e1 of con13ation in cou1t fo1eclosu1e p1ocee0in5s is a nal o10e1% not 3e1el7 inte1locuto17. The 1i5ht to appeal the1ef1o3 has lon5 been 1eco5ni4e0.! (n fact% it is the nal o10e1 f1o3 6hich appeal 3a7 be taen in u0icial fo1eclosu1e fo1eclosu1e p1ocee0in5s.> No appeal appeal 6as taen. taen. (t follo6s that sai0 o10e1 is nal% bin0in5. !. Not that the 0ispute0 o10e1 of con13ation 3a7 be labelle0 null an0 /oi0% as appellant 6oul0 6ant it to be. The p1esu3ption that the notice of sale of 1eal 1eal estate in fo1eclosu1e fo1eclosu1e p1ocee0in5s has been 5i/en% hol0s t1ue he1e. *o1% *o1% in0ee0% a le5al tenet of lon5 stan0in5 is that oKcial 0ut7 p1esu3pti/el7 has been 1e5ula1l7 pe1fo13e0. Appellant plea0e0 such lac of notice. ,e1 0ut7 it 6as to p1o/e it in cou1t. She 0i0 not."D6ph".Ft An0 if the notice that appellant he1e co3plains of is pe1sonal notice to he1% she is 61on5. Because% pe1sonal notice is not 1eui1e0 b7 Section "$ of Rule !& of the "&>: Rules of Cou1t% no6 Section "=% Rule !& of the ne6 Rules. This le5al p1o/ision 6as 5i/en u0icial no0 as ea1l7 as "&!: in La U1bana /s. Belan0o% > Phil. &!:% &! ? a case of fo1eclosu1e of 1eal estate 3o1t5a5e ? 6he1e 6e p1onounce0 that 9YtZhe la6 0oes not 1eui1e that such notication be 5i/en pe1sonall7 to the pa1t7 upon 6hose p1ope1t7 e8ecution e8ecution is le/ie0.9 No1 6as the1e an a/e13ent in the co3plaint no6 befo1e us that if a 1esale shoul0 tae place% 9the 1ealt7 6oul0 b1in5 a hi5he1 p1ice9 the1eat% a ci1cu3stance 9essential to 1escin0 a sale 1e5ula1l7 3a0e an0 con13e0 b7 a co3petent cou1t% on the 51oun0 of ina0euac7 of p1ice.9$ The 3e1e a/e13ent that the p1ice is unconscionable is nothin5 3o1e than a conclusion of la6. The /alue of such alle5ation is fu1the1 0o6n51a0e0 b7 the lac of p1oof. This is one case 6hich epito3i4es the fatal 0istance bet6een alle5ation an0 p1oof. >. P1ope1l7 to be pointe0 out he1e is that the 0is3issal o10e1 of No/e3be1 &% "&$ no6 on appeal% states that the le5alit7 of the fo1eclosu1e fo1eclosu1e sale uestione0 in this action 96as an issue that coul0 ha/e been% an0 6as in fact% 1aise0 an0 liti5ate0 in the ante1io1 suit9 @Ci/il Case >''=. E8cept fo1 the P1o/incial She1iI 6ho is a no3inal 0efen0ant he1e% the pa1ties in the t6o suits belo6 a1e the sa3e) (sabel Oca3po an0 (5nacio +o3alanta. Subect 3atte1 is the sa3e lan0. The u053ent an0 o10e1 of con13ation con13ation of the she1iIJs sale in the 1st suit ha/e both beco3e nal. The 1st suit is a u0icial u0icial fo1eclosu1e fo1eclosu1e of 3o1t5a5e 3o1t5a5e the secon0% annul3ent of the fo1eclosu1e fo1eclosu1e sale con0ucte0 in the 1st suit. A p1ocee0in5 fo1 u0icial fo1eclosu1e of 3o1t5a5e is an action uasi in 1e3. (t is base0 on a pe1sonal clai3 sou5ht to be enfo1ce0 a5ainst a specic p1ope1t7 of a pe1son na3e0 pa1t7 0efen0ant. An0% its pu1pose is to ha/e the p1ope1t7 sei4e0 an0 sol0 b7 cou1t o10e1 to the en0 that the p1ocee0s the1eof be applie0 to the pa73ent of plaintiIJs clai3.' To To be 1ea0 as cont1ollin5 cont1ollin5 he1e a1e a1e Sections >> an0 >% >% Rule !& of the Rules of Cou1t ? 6hich is no6 substantiall7 e3bo0ie0 in Section >&% Rule !& of the ne6 Rules of Cou1t% /i4) Sec. >&. EIect of u053ents.?The eIect of a u053ent o1 nal o10e1 1en0e1e0 b7 a cou1t o1 u05e of the Philippines% ha/in5 u1is0iction to p1onounce the u053ent o1 o10e1% o10e1% 3a7 be as follo6s) follo6s)
@a (n case of a u053ent o1 o10e1 a5ainst a specic thin5% o1 in 1espect to the p1obate of a 6ill% o1 the a03inist1ation of the estate of a 0ecease0 pe1son% o1 in 1espect to the pe1sonal% political o1 le5al con0ition o1 status of a pa1ticula1 pe1son o1 his 1elationship to anothe1% the u053ent o1 o10e1 is conclusi/e upon the title to the thin5% the 6ill o1 a03inist1ation% o1 the con0ition% status o1 1elationship of the pe1son ho6e/e1% the p1obate of a 6ill o1 51antin5 of lette1s of a03inist1ation shall onl7 be p1i3a facie e/i0ence of the 0eath of the testato1 o1 intestate @b (n othe1 cases the u053ent o1 o10e1 is% 6ith 1espect to the 3atte1 0i1ectl7 a0u05e0 o1 as to an7 othe1 3atte1 that coul0 ha/e been 1aise0 in 1elation the1eto% conclusi/e bet6een the pa1ties an0 thei1 successo1s in inte1est inte1est b7 title subseuent to the co33ence3ent of the action o1 special p1ocee0in5% liti5atin5 fo1 the sa3e thin5 an0 un0e1 the sa3e title an0 in the sa3e capacit7 @c (n an7 othe1 liti5ation bet6een the sa3e pa1ties o1 thei1 successo1s in inte1est% that onl7 is 0ee3e0 to ha/e been a0u05e0 in a fo13e1 u053ent 6hich appea1s upon its face to ha/e been so a0u05e0% o1 6hich 6as actuall7 an0 necessa1il7 inclu0e0 the1ein o1 necessa17 the1eto. Pa1a51aph Pa1a51aph @a of the fo1e5oin5 1ule is co33onl7 no6n to spea of u053ents in 1e3 pa1a51aph @b is sai0 to 1efe1 to u053ents in pe1sona3 an0 pa1a51aph @c is the concept un0e1stoo0 in la6 as 9conclusi/eness of u053ent.9 = ,e1e% the 1st suit 6as an action uasi in 1e3. A u053ent the1ein 9is 9is conclusi/e onl7 bet6een the
pa1ties.9& +i1ectl7 +i1ectl7 applicable is pa1a51aph @b abo/euote0. B7 that p1o/ision% the con13ation o10e1 in the fo1eclosu1e fo1eclosu1e case is% 96ith 1espect to the 3atte1 0i1ectl7 a0u05e0 o1 as to an7 othe1 3atte1 that coul0 ha/e been 1aise0 in 1elation the1eto% conclusi/e conclusi/e bet6een the pa1ties9 an0 thei1 p1i/ies. As 6e /ie6 this case f1o3 anothe1 stan0point% 6e 1each the sa3e 1esult. (t is t1ue that the cause of action in the 1st suit is not e8actl7 i0entical to the cause of action in the secon0. *o1% the latte1 3e1el7 challen5es the le5alit7 of the she1iIJs sale in the 1st p1ocee0in5. ;e 0o sa7% ho6e/e1% that such le5alit7 of sale is an issue 6hich coul0 ha/e been% an0 6as in fact 1aise0 an0 1eecte0 in the 1st case. Thus% co3in5 into pla7 also is pa1a51aph @c abo/e-uote0. The1efo1e% The1efo1e% the uestion 1aise0 b7 appellant in the p1esent suit shoul0 be 90ee3e0 to ha/e been a0u05e0 in a fo13e1 u053ent 6hich appea1s upon its its face to ha/e been so a0u05e0% o1 6hich 6as actuall7 an0 necessa1il7 inclu0e0 the1ein o1 necessa17 the1eto.9 (t is thus be7on0 0oubt that the p1esent action is ba11e0 b7 the conclusi/eness of u053ent in the ante1io1 suit. ": This case 3ust be 0is3isse0. Confo13abl7 Confo13abl7 to the fo1e5oin5% the lo6e1 cou1tJs o10e1 of No/e3be1 &% "&$ 0is3issin5 this case% an0 the o10e1 of No/e3be1 "% "&$ 0en7in5 1econsi0e1ation the1eof% a1e he1eb7 aK13e0. Costs a5ainst plaintiI-appellant. So o10e1e0. Concepcion% C.#.% Re7es% #.B.L.% +i4on% Maalintal% Maalintal% Ben54on% #.P.% Sanche4% Cast1o% An5eles an0 *e1nan0o% ##.% concu1. concu1.
