RULE 37 G.R. No. L-70895. May 30, 1986.

*
HABALUYAS ENTERPRISES, INC. and PEDRO HABALUYAS, petitioners, vs. JUDGE
MAXIMO M. JAPSON, Manila Regional Trial Court, Branch 36; SHUGO NODA & CO.,
LTD., and SHUYA NODA, respondents.
Appeals; The procedure for appeal under Batas 129 outlined.—Section 39 of The Judiciary
Reorganization Act, Batas Pambansa Blg. 129, reduced the period for appeal from final orders or
judgments of the Regional Trial Courts (formerly Courts of First Instance) from thirty (30) to
fifteen (15) days and provides a uniform period of fifteen days for appeal from final orders,
resolutions, awards, judgments, or decisions of any court counted from notice thereof, except in
habeas corpus cases where the period for appeal remains at forty-eight (48) hours. To expedite
appeals, only a notice of appeal is required and a record on appeal is no longer required except in
appeals in special proceedings under Rule 109 of the Rules of Court and in other cases wherein
multiple appeals are allowed. Section 19 of the Interim Rules provides that in these exceptional
cases, the period for appeal is thirty (30) days since a record on appeal is required. Moreover,
Section 18 of the Interim Rules provides that no appeal bond shall be required for an appeal, and
Section 4 thereof disallows a second motion for reconsideration of a final order or judgment.

Same; It is unfair to deprive a party of a right to appeal simply because he availed of a

procedure not prohibited or allowed by the law or the Rules. A change in concept should be applied
prospectively.— After considering the able arguments of counsel for petitioners and respondents,
the Court resolved that the interest of justice would be better served if the ruling in the original
decision were applied prospectively from the time herein stated. The reason is that it would be
unfair to deprive parties of their right to appeal simply because they availed themselves of a
procedure which was not expressly prohibited or allowed by the law or the Rules.

Same; Certiorari; Motions; A motion for new trial or reconsideration is not a prerequisite to an
appeal, petition for review, or petition for review on certiorari.—On the other hand, a motion for
new trial or reconsideration is not a pre-requisite to an appeal, a petition for review or a petition
for review on certiorari, and since the purpose of the amendments above referred to is to expedite
the final disposition of cases, a strict but prospective application of the said ruling is in order.

Same; Same; Same; Effective June 1, 1986 no motion for extension of time to file a motion for
new trial or reconsideration may be filed in the Metropolitan and Municipal Courts, RTC’s and the
I.A.C., except in cases pending in the Supreme Court.—Beginning one month after the
promulgation of this Resolution, the rule shall be strictly enforced that no motion for extension of
time to file a motion for new trial or reconsideration may be filed with the Metropolitan or
Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court. Such a
motion may be filed only in cases pending with the Supreme Courtas the court of last resort, which
may in its sound discretion either grant or deny the extension requested.

Same; Same; Same; In appeals under special proceedings, a motion for extension to file record
on appeal must be filed within the 30-day period to appeal; If not granted, the appeal must be
perfected within the original period.—In appeals in special proceedings under Rule 109 of the Rules
of Court and in other cases wherein multiple appeals are allowed, a motion for extension of time to
file the record on appeal may be filed within the reglementary period of thirty (30 days. (Moya vs.
Barton, 76 Phil. 831; Heirs of Nantes vs. Court of Appeals, July 25, 1983; 123 SCRA 753.) If the
court denies the motion for extension, the appeal must be taken within the original period (Bello
vs. Fernando, January 30, 1962, 4 SCRA 135), inasmuch as such a motion does not suspend the
period for appeal (Reyes vs. Sta. Maria, November 20, 1972, 48 SCRA 1). The trial court may grant
said motion after the expiration of the period for appeal provided it was filed within the original
period. (Valero vs. Court of Ap-peals, June 28, 1973, 51 SCRA 467; Berkenkotter vs. Court of Ap-
peals, September 28, 1973, 53 SCRA 228).

PETITION to review the decision of the Manila Regional Trial Court, Br. 36. Japson, J.

FERIA, J.:
1

Respondents have filed a motion for reconsideration of the Decision of the Second Division
Page

of the Court promulgated on August 5, 1985 which granted the petition for certiorari and
prohibition and set aside the order of respondent Judge granting private respondents’ motion for
new trial. The issue in this case is whether the fifteen-day period within which a party may file a
motion for reconsideration of a final order or ruling of the Regional Trial Court may be extended.

Section 39 of The Judiciary Reorganization Act, Batas Pam-bansa Blg. 129, reduced the
period for appeal from final orders or judgments of the Regional Trial Courts (formerly Courts of
First Instance) from thirty (30) to fifteen (15) days and provides a uniform period of fifteen days
for appeal from final orders, resolutions, awards, judgments, or decisions of any court counted from
notice thereof, except in habeas corpus cases where the period for appeal remains at forty-eight
(48) hours. To expedite appeals, only a notice of appeal is required and a record on appeal is no
longer required except in appeals in special proceedings under Rule 109 of the Rules of Court and
in other cases wherein multiple appeals are allowed. Section 19 of the Interim Rules provides that
in these exceptional cases, the period for appeal is thirty (30) days since a record on appeal is
required. Moreover, Section 18 of the Interim Rules provides that no appeal bond shall be required
for an appeal, and Section 4 thereof disallows a second motion for reconsideration of a final order
or judgment.

All these amendments are designed, as the decision sought to be reconsidered rightly states,
to avoid the procedural delays which plagued the administration of justice under the Rules of Court
which are intended to assist the parties in obtaining a just, speedy and inexpensive administration
of justice.

However, the law and the Rules of Court do not expressly prohibit the filing of a motion for
extension of time to file a motion for reconsideration of a final order or judgment.

In the case of Gibbs vs. Court of First Instance (80 Phil. 160), the Court dismissed the
petition for certiorari and ruled that the failure of defendant’s attorney to file the petition to set
aside the judgment within the reglementary period was due to excusable neglect, and,
consequently, the record on appeal was allowed. The Court did not rule that the motion for
extension of time to file a motion for new trial or reconsideration could not be granted.

In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March 30, 1979, 89
SCRA 178), a division of the Court cited the Gibbs decision to support a statement that a motion
to extend the reglementary period for filing the motion for reconsideration is not authorized or is
not in order.

The Intermediate Appellate Court is sharply divided on this issue. Appeals have been
dismissed on the basis of the original decision in this case.

After considering the able arguments of counsel for petitioners and respondents, the Court
resolved that the interest of justice would be better served if the ruling in the original decision
were applied prospectively from the time herein stated. The reason is that it would be unfair to
deprive parties of their right to appeal simply because they availed themselves of a procedure
which was not expressly prohibited or allowed by the law or the Rules. On the other hand, a motion
for new trial or reconsideration is not a pre-requisite to an appeal, a petition for review or a petition
for review on certiorari, and since the purpose of the amendments above referred to is to expedite
the final disposition of cases, a strict but prospective application of the said ruling is in order.
Hence, for the guidance of Bench and Bar, the Court restates and clarifies the rules on this point,
as follows:

1. Beginning one month after the promulgation of this Resolution, the rule shall be strictly
enforced that no motion for extension of time to file a motion for new trial or
reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the Regional
Trial Courts, and the Intermediate Appellate Court. Such a motion may be filed only in
cases pending with the Supreme Court as the court of last resort, which may in its sound
discretion either grant or deny the extension requested.
2. In appeals in special proceedings under Rule 109 of the Rules of Court and in other cases
wherein multiple appeals are allowed, a motion for extension of time to file the record on
2
Page

appeal may be filed within the reglementary period of thirty (30) days. (Moya vs.
 Barton, 76 Phil. 831; Heirs of Nantes vs. Court of Appeals, July 25, 1983, 123 SCRA 753.)
If the court denies the motion for extension, the appeal must be taken within the original
period (Bello vs. Fernando, January 30, 1962, 4 SCRA 135), inasmuch as such a motion
does not suspend the period for appeal (Reyes vs. Sta. Maria, November 20, 1972, 48 SCRA
1). The trial court may grant said motion after the expiration of the period for appeal
provided it was filed within the original period. (Valero vs. Court of Appeals, June 28,
1973, 51 SCRA 467; Berkenkotter vs. Court of Appeals, September 28, 1973, 53 SCRA 228).

All appeals heretofore timely taken, after extensions of time were granted for the filing of a motion
for new trial or reconsideration, shall be allowed and determined on the merits.
WHEREFORE, the motion for reconsideration of, and to set aside, the decision of August 5,
1985 is granted and the petition is dismissed. No costs.

SO ORDERED.
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez,
Jr., Cruz and Paras, JJ., concur.
Motion for reconsideration granted and petition dismissed.
Notes.—If at the expiration of the 15 days within which to appeal an order or decision of the
Agrarian Court to the Supreme Court no appeal is taken, said order or decision shall become final
unless during said 15 days the aggrieved party moves for a reconsideration of the said order or
decision. (Gonzales vs. Santos, 1 SCRA 1151.)
The fifteen-day period within which to file a motion for reconsideration of the decision of the
Court of Appeals may not be extended because the Court has control over its processes and in its
discretion may grant such extension if reasonably sought. (Castañeda vs. Court of Appeals, 27
SCRA 1085.)

3
Page
 RULE 39 G.R. No. 165060. November 27, 2008.*
ALBINO JOSEF, petitioner, vs. OTELIO SANTOS, respondent.

Judgments; Where a judgment or judicial order is void it may be said to be a lawless thing, which can
be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.—The
above Order did not resolve nor take into account petitioner’s allegations in his Opposition, which are
material and relevant in the resolution of the motion for issuance of a writ of execution. This is serious error
on the part of the trial court. It should have made an earnest determination of the truth to petitioner’s
claim that the house and lot in which he and his children resided was their duly constituted family home.
Since it did not, its July 16, 2003 Order is thus null and void. Where a judgment or judicial order is void it
may be said to be a lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever
and whenever it exhibits its head.

Family Law; Family Home; The family home is a real right which is gratuitous, inalienable and free
from attachment, constituted over the dwelling place and the land on which it is situated, which confers
upon a particular family the right to enjoy such properties, which must remain with the person constituting
it and his heirs.—The family home is a real right which is gratuitous, inalienable and free from attachment,
constituted over the dwelling place and the land on which it is situated, which confers upon a particular
family the right to enjoy such properties, which must remain with the person constituting it and his heirs.
It cannot be seized by creditors except in certain special cases.

Same; Same; The protection of the family home is just as necessary in the preservation of the family as
a basic social institution, and since no custom, practice or agreement destructive of the family shall be
recognized or given effect, the trial court’s failure to observe the proper procedures to determine the veracity
of petitioner’s allegations, is unjustified.—The family home is the dwelling place of a person and his family,
a sacred symbol of family love and repository of cherished memories that last during one’s lifetime. It is the
sanctuary of that union which the law declares and protects as a sacred institution; and likewise a shelter
for the fruits of that union. It is where both can seek refuge and strengthen the tie that binds them together
and which ultimately forms the moral fabric of our nation. The protection of the family home is just as
necessary in the preservation of the family as a basic social institution, and since no custom, practice or
agreement destructive of the family shall be recognized or given effect, the trial court’s failure to observe
the proper procedures to determine the veracity of petitioner’s allegations, is unjustified. The same is true
with respect to personal properties levied upon and sold at auction. Despite petitioner’s allegations in his
Opposition, the trial court did not make an effort to determine the nature of the same, whether the items
were exempt from execution or not, or whether they belonged to petitioner or to someone else.
PETITION for review on certiorari of the resolutions of the Court of Appeals.
The facts are stated in the opinion of the Court.59

YNARES-SANTIAGO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court assails the
November 17, 20031Resolution of the Court of Appeals in CA-G.R. SP No. 80315, dismissing
petitioner’s special civil action of certiorari for failure to file a prior motion for reconsideration, and
the May 7, 20042 Resolution denying the motion for reconsideration.

Petitioner Albino Josef was the defendant in Civil Case No. 95-110-MK, which is a case for
collection of sum of money filed by herein respondent Otelio Santos, who claimed that petitioner
failed to pay the shoe materials which he bought on credit from respondent on various dates in
1994.

After trial, the Regional Trial Court of Marikina City, Branch 272, found petitioner liable
to respondent in the amount of P404,836.50 with interest at 12% per annumreckoned from
January 9, 1995 until full payment.3

Petitioner appealed4 to the Court of Appeals, which affirmed the trial court’s decision in
toto.5 Petitioner filed before this Court a petition for review on certiorari, but it was dismissed in a
Resolution dated February 18, 2002.6The Judgment became final and executory on May 21, 2002.

On February 17, 2003, respondent moved for issuance of a writ of execution, 7 which was
opposed by petitioner.8 In an Order dated July 16, 2003,9 the trial court granted the motion, the
4

dispositive portion of which reads, as follows:

Page
 “WHEREFORE, premises considered, the motion for issuance of writ of execution is hereby granted. Let
a writ of execution be issued commanding the Sheriff of this Court to execute the decision dated December
18, 1996.
SO ORDERED.”10

A writ of execution was issued on August 20, 200311 and enforced on August 21, 2003. On
August 29, 2003, certain personal properties subject of the writ of execution were auctioned off.
Thereafter, a real property located at Marikina City and covered by Transfer Certificate of Title
(TCT) No. N-105280 was sold on October 28, 2003 by way of public auction to fully satisfy the
judgment credit. Respondent emerged as the winning bidder and a Certificate of Sale12 dated
November 6, 2003 was issued in his favor.

On November 5, 2003, petitioner filed an original petition for certiorari with the Court of
Appeals, questioning the sheriff’s levy and sale of the abovementioned personal and real
properties. Petitioner claimed that the personal properties did not belong to him but to his
children; and that the real property covered by TCT No. N-105280 was his family home thus
exempt from execution.

On November 17, 2003, the Court of Appeals issued the assailed Resolution dismissing the
petition for failure of petitioner to file a motion for reconsideration of the trial court’s July 16, 2003
Order granting the motion for execution and ordering the issuance of a writ therefor, as well as for
his failure to indicate in his petition the timeliness of its filing as required under the Rules of
Court. On May 7, 2004, the appellate court denied petitioner’s motion for reconsideration.

Thus, the instant petition which raises the following issues:

I.
WHETHER OR NOT THE LEVY AND SALE OF THE PERSONAL BELONGINGS OF THE
PETITIONER’S CHILDREN AS WELL AS THE ATTACHMENT AND SALE ON PUBLIC AUCTION OF
HIS FAMILY HOME TO SATISFY THE JUDGMENT AWARD IN FAVOR OF RESPONDENT IS LEGAL.

II.
WHETHER OR NOT THE DISMISSAL OF THE PETITIONER’S PETITION FOR CERTIORARI BY THE
HONORABLE COURT OF APPEALS IS JUSTIFIED UNDER THE CIRCUMSTANCES.

Petitioner argues that the trial court sheriff erroneously attached, levied and sold on
execution the real property covered by TCT No. N-105280 because the same is his family home;
that the execution sale was irregular because it was conducted without complying with the notice
and posting of requirements; and that the personal and real properties were sold for inadequate
prices as to shock the conscience. The real property was allegedly worth P8 million but was sold
for only P848,448.64.

Petitioner also argues that the appellate court gravely abused its discretion in dismissing
the petition based purely on technical grounds, i.e., his failure to file a motion for reconsideration
of the trial court’s order granting execution, and his failure to indicate in his petition
for certiorari the timeliness of filing the same with the Court of Appeals.
Respondent, on the other hand, argues that petitioner’s alleged family home has not been shown
to have been judicially or extra judicially constituted, obviously referring to the provisions on
family home of the Civil Code—not those of the Family Code which should apply in this case; that
petitioner has not shown to the court’s satisfaction that the personal properties executed upon and
sold belonged to his children. Respondent argues that he is entitled to satisfaction of judgment
considering the length of time it took for the parties to litigate and the various remedies petitioner
availed of which have delayed the case.

The petition is meritorious.

Petitioner, in his opposition to respondent’s motion for issuance of a writ of execution,

claimed that he was insolvent; that he had no property to answer for the judgment credit; that the
house and lot in which he was residing at the time was his family home thus exempt from
5
Page

execution; that the household furniture and appliances found therein are likewise exempt from
execution; and that these furniture and appliances belonged to his children Jasmin Josef and Jean
Josef Isidro. Thus, as early as during proceedings prior to the issuance of the writ of execution,
petitioner brought to the fore the issue of exemption from execution of his home, which he claimed
to be a family home in contemplation of the civil law.

However, instead of inquiring into the nature of petitioner’s allegations in his opposition,
the trial court ignored the same and granted respondent’s motion for execution. The full text of the
July 16, 2003 Order provides, as follows:
“This resolves the “Motion for the Issuance of Writ of Execution” filed by plaintiff thru counsel and the
“Opposition” thereto filed by the defendant on her own behalf.
The records show that a decision was rendered by this Court in favor of the plaintiff on December 18,
1995 which decision was affirmed by the Court of Appeals on June 26, 2001 and by the Supreme Court on
February 18, 2002. On June 18, 2003, this Court received the entire records of the case from the Court of
Appeals.63
Considering the foregoing, it is now the ministerial duty of the Court to issue a writ of execution
pursuant to Sec. 1, Rule 39 of the Rules of Court.
WHEREFORE, premises considered, the motion for issuance of writ of execution is hereby granted. Let
a writ of execution be issued commanding the Sheriff of this Court to execute the decision dated December
18, 1996.
SO ORDERED.”13

The above Order did not resolve nor take into account petitioner’s allegations in his
Opposition, which are material and relevant in the resolution of the motion for issuance of a writ
of execution. This is serious error on the part of the trial court. It should have made an earnest
determination of the truth to petitioner’s claim that the house and lot in which he and his children
resided was their duly constituted family home. Since it did not, its July 16, 2003 Order is thus
null and void. Where a judgment or judicial order is void it may be said to be a lawless thing, which
can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its
head.14

The family home is a real right which is gratuitous, inalienable and free from attachment,
constituted over the dwelling place and the land on which it is situated, which confers upon a
particular family the right to enjoy such properties, which must remain with the person
constituting it and his heirs. It cannot be seized by creditors except in certain special cases.15

Upon being apprised that the property subject of execution allegedly constitutes petitioner’s
family home, the trial court should have observed the following procedure:
1. “Determine if petitioner’s obligation to respondent falls under either of the exceptions under
Article 15516 of the Family Code;
2. Make an inquiry into the veracity of petitioner’s claim that the property was his family
home;17 conduct an ocular inspection of the premises; an examination of the title; an interview of
members of the community where the alleged family home is located, in order to determine if
petitioner actually resided within the premises of the claimed family home; order a submission
of photographs of the premises, depositions, and/or affidavits of proper individuals/parties; or a
solemn examination of the petitioner, his children and other wit-
nesses. At the same time, the respondent is given the opportunity to cross-examine and present evidence
to the contrary;
3. If the property is accordingly found to constitute petitioner’s family home, the court should
determine:
a) if the obligation sued upon was contracted or incurred prior to, or after, the effectivity of
the Family Code;18
b) if petitioner’s spouse is still alive, as well as if there are other beneficiaries of the family
home;19
c) if the petitioner has more than one residence for the purpose of determining which of them,
if any, is his family home;20 and
d) its actual location and value, for the purpose
of applying the provisions of Articles 15721 and 16022 of the Family Code.

The family home is the dwelling place of a person and his family, a sacred symbol of family
love and repository of cherished memories that last during one’s lifetime.23 It is the sanctuary of
6

that union which the law declares and protects as a sacred institution; and likewise a shelter for
Page

the fruits of that union. It is where both can seek refuge and strengthen the tie that binds them
together and which ultimately forms the moral fabric of our nation. The protection of the family
home is just as necessary in the preservation of the family as a basic social institution, and since
no custom, practice or agreement destructive of the family shall be recognized or given effect,24 the
trial court’s failure to observe the proper procedures to determine the veracity of petitioner’s
allegations, is unjustified.

The same is true with respect to personal properties levied upon and sold at auction. Despite
petitioner’s allegations in his Opposition, the trial court did not make an effort to determine the
nature of the same, whether the items were exempt from execution or not, or whether they
belonged to petitioner or to someone else.25

Respondent moved for issuance of a writ of execution on February 17, 2003 while petitioner
filed his opposition on June 23, 2003. The trial court granted the motion on July 16, 2003, and the
writ of execution was issued on August 20, 2003. Clearly, the trial court had enough time to conduct
the crucial inquiry that would have spared petitioner the trouble of having to seek relief all the
way to this Court. Indeed, the trial court’s inaction on petitioner’s plea resulted in serious injustice
to the latter, not to mention that its failure to conduct an inquiry based on the latter’s claim
bordered on gross ignorance of the law.

Being void, the July 16, 2003 Order could not have conferred any right to respondent. Any
writ of execution based on it is likewise void. Although we have held in several cases26 that a claim
for exemption from execution of the family home should be set up and proved before the sale of the
property at public auction, and failure to do so would estop the party from later claiming the
exemption since the right of exemption is a personal privilege granted to the judgment debtor
which must be claimed by the judgment debtor himself at the time of the levy or within a
reasonable period thereafter, the circumstances of the instant case are different. Petitioner
claimed exemption from execution of his family home soon after respondent filed the motion for
issuance of a writ of execution, thus giving notice to the trial court and respondent that a property
exempt from execution may be in danger of being subjected to levy and sale. Thereupon, the trial
court is called to observe the procedure as herein laid out; on the other hand, the respondent should
observe the procedure prescribed in Article 160 of the Family Code, that is, to obtain an order for
the sale on execution of the petitioner’s family home, if so, and apply the proceeds—less the
maximum amount allowed by law under Article 157 of the Code which should remain with the
petitioner for the rebuilding of his family home—to his judgment credit. Instead, both the trial
court and respondent completely ignored petitioner’s argument that the properties subject of the
writ are exempt from execution.

Indeed, petitioner’s resort to the special civil action of certiorari in the Court of Appeals was
belated and without benefit of the requisite motion for reconsideration, however, considering the
gravity of the issue, involving as it does matters that strike at the very heart of that basic social
institution which the State has a constitutional and moral duty to preserve and protect, as well as
petitioner’s constitutional right to abode, all procedural infirmities occasioned upon this case must
take a back seat to the substantive questions which deserve to be answered in full.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The November 17, 2003
and May 7, 2004 Resolutions of the Court of Appeals in CA-G.R. SP No. 80315 are REVERSED
and SET ASIDE. The July 16, 2003 Order of the Regional Trial Court of Marikina City, Branch
272 in Civil Case No. 95-110-MK, as well as the writ or writs of execution thus issued in said case,
are hereby DECLARED VOID, and all acts proceeding therefrom and any title obtained by virtue
thereof are likewise DECLARED VOID.

The trial court is hereby DIRECTED (1) to conduct a solemn inquiry into the nature of the
real property covered by Transfer Certificate of Title No. N-105280, with a view toward
determining whether the same is petitioner Albino Josef’s family home, and if so, apply the
pertinent provisions of the Family Code and Rule 39 of the Rules of Court; and (2) to conduct an
inquiry into the ownership of all other properties that were levied upon and sold, with the aim of
determining as well whether these properties are exempt from execution under existing law.
7
Page
 Respondent Otelio Santos is hereby DIRECTED to hold the abovementioned real and
personal properties, or the proceeds thereof, in trust to await the outcome of the trial court’s
inquiry.

Finally, the trial court is DIRECTED to resolve, with utmost dispatch, Civil Case No. 95-
110-MK within sixty (60) days from receipt of a copy of this Decision.
SO ORDERED.

8
Page
 RULE 39 G.R. No. 162100. January 18, 2012.*
PENTA CAPITAL FINANCE CORPORATION, petitioner, vs. The Honorable TEODORO BAY,
Presiding Judge of the Regional Trial Court, Quezon City, Branch 86; ANGELITO ACOSTA,
Deputy Sheriff of RTC QC Branch 86; BIBIANO REYNOSO IV, and Commercial Credit
Corporation of Quezon City, respondents.
G.R. No. 162395. January 18, 2012.*
BIBIANO REYNOSO IV, petitioner, vs. PENTA CAPITAL FINANCE CORPORATION,
respondent.
Remedial Law; Civil Procedure; Judgments; Law of the Case; The principle of the law of the case holds
that whatever has been irrevocably established as the controlling legal rule between the parties in a case
continues to be the law of the case, whether correct on general principles or not, so long as the facts on which
such decision was predicated continue to be facts of the case before the Court.—The principle of the law of
the case is embodied in Section 47(b) and (c), Rule 39 of the Rules of Court. As we explained in Litton Mills,
Inc. v. Galleon Trader, Inc., 163 SCRA 489 (1988), this principle holds that “(w)hatever has been irrevocably
established as the controlling legal rule between the parties in a case continues to be the law of the case,
whether correct on general principles or not, so long as the facts on which such decision was predicated
continue to be facts of the case before the Court. Once a judgment has become final, the issues therein
should be laid to rest.”

Civil Law; Interest Rates; In the absence of a written stipulation, the applicable interest rate to be
imposed in judgments involving a forbearance of credit shall be 12% per annum in accordance with Central
Bank (CB) Circular No. 416. On the other hand, if the judgment refers to payment of indemnities in the
concept of damages arising from a breach or a delay in the performance of obligations in general, the
applicable interest rate shall be 6% per annum, in accordance with Article 2206 of the Civil Code.—In
fine, Eastern Shipping, 234 SCRA 78 91994), merely provides that in the absence of a written stipulation,
the applicable interest rate to be imposed in judgments involving a forbearance of credit shall be 12% per
annum in accordance with Central Bank (CB) Circular No. 416. On the other hand, if the judgment refers
to payment of indemnities in the concept of damages arising from a breach or a delay in the performance of
obligations in general, the applicable interest rate shall be 6% per annum, in accordance with Article 2206
of the Civil Code. Both interest rates apply from the time of judicial or extrajudicial demand until the
finality of the judgment. However, from the time the judgment of the court awarding a sum of money
becomes final until it is satisfied, the award it granted shall be considered a forbearance of credit, whether
or not the judgment award actually pertained to one. Accordingly, during this interim period, the interest
rate of 12% per annum for forbearance of money shall apply.

Mercantile Law; Money Market Transactions; Rollover Transaction; A money market transaction does
not necessarily include a rollover, which would take place only if the parties agree to the reinvestment of the
proceeds of the earlier money market transaction.—A money market transaction does not necessarily include
a rollover, which would take place only if the parties agree to the reinvestment of the proceeds of the earlier
money market transaction. The parties’ agreement to a rollover is a separate transaction whereby the new
placement, consisting of the original placement plus the earned interest, becomes the new placement that
shall earn interest at the end of the agreed period. In the present case, it does not appear that there was
an agreement between CCC-QC and Reynoso for the automatic rollover of all of his placements.

Civil Law; Interest Rates; An award of a sum of money shall be considered as a forbearance of credit
once it becomes final, whether or not the award actually pertained to one.—Reynoso is entitled to interest
on the moral and exemplary damages, as well as the attorney’s fees awarded him. As stressed in our above
discussion of Eastern Shipping, an award of a sum of money shall be considered as a forbearance of credit
once it becomes final, whether or not the award actually pertained to one. Hence, from its finality until its
satisfaction, the judgment award to Reynoso of moral and exemplary damages, as well as attorney’s fees,
shall be subject to the interest rate of 12% per annum.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.

SERENO, J.:
Before us is a consolidated Petition for Review on Certiorari under Rule 45 impugning the
Decision dated 30 July 2003 and Resolution dated 9 February 2004 of the Court of Appeals,1 which
modified the interests applied by the trial court in computing the judgment awards; but affirmed
the Orders dated 3 and 19 April, 23 May, 2 August, and 3 October 2002 issued by the trial court
9

in the course of execution proceedings.

Page
 Penta Capital Finance Corporation (Penta) was originally known as Commercial Credit
Corporation (CCC), a financing and investment firm, which established in different parts of the
country certain franchise companies, including Commercial Credit Corporation of Quezon City
(CCC-QC). CCC designated its own employees as resident managers of its franchise companies,
with Bibiano Reynoso IV (Reynoso) as resident manager of CCC-QC.

CCC-QC accepts funds from depositors to whom it issues interest-bearing promissory notes.
In view of the exclusive management contract between CCC and CCC-QC, the latter would
sell/discount and/or assign its receivables to the former, which loans them out to various borrowers
as money market placements.2

In view of the Central Bank’s promulgation of the DOSRI Rule,3 CCC subsequently created
CCC Equity Corporation (CCC Equity), a wholly owned subsidiary, to which it had transferred its
30% equity and two seats in the franchise corporations’ board of directors. In February 1976, CCC
allegedly transferred to its stockholders all its shares in CCC Equity as property dividends.

Under the new setup, CCC Equity substituted CCC in the management contract with the
franchise companies. Several CCC-QC officials, like Reynoso, became employees of CCC Equity
and received salaries and allowances from the latter. Still, all employees of CCC-QC remained
qualified members of the Commercial Credit Corporation Employees Pension Plan, even when
CCC-QC was already partly owned by CCC Equity and technically had nothing to do with CCC.

Reynoso deposited personal funds to CCC-QC, which in return issued to him interest-
bearing Promissory Notes.4

In a separate transaction, Reynoso mortgaged to CCC his house and lot in Valle Verde,
Pasig City.5 The latter later foreclosed the property, and the title thereto was later consolidated in
its name when no redemption was made.

On 15 August 1980, CCC-QC instituted with the Regional Trial Court of Quezon City,
Branch 866 (RTC QC), a Complaint7 against Reynoso for a sum of money with preliminary
attachment, on the allegation that he had embezzled company funds amounting to P1,300,593.11.
Reynoso filed a Counterclaim8 based on his money placements with CCC-QC, as shown by 23
checks he had issued in its favor.

During the pendency of the case, or on 2 September 1983, CCC changed its name to General
Credit Corporation (GCC).

On 14 January 1985, the RTC QC—then presided by Judge Antonio Solano—rendered a

Decision9 dismissing CCC-QC’s Complaint, but granting Reynoso’s Counterclaim. The dispositive
portion of the Decision reads:
“Premises considered, the court finds the complaint without merit. Accordingly, said complaint is hereby
DISMISSED.

By reason of said complaint, defendant Bibiano Reynoso IV suffered degradation, humiliation and
mental anguish.

On the counterclaim, which the Court finds to be meritorious, plaintiff-corporation is hereby ordered:
a. to pay defendant the sum of P185,000.00 plus 14% interest per annum from October 2, 1980 until
fully paid;
b. to pay defendant P3,639,470.82 plus interest thereon at the rate of 14% per annum from June
24, 1981, the date of filing of Amended Answer, until fully paid; from this amount may be
deducted the remaining obligation of defendant under the promissory note of October 24, 1977,
in the sum of P9,738.00 plus penalty at the rate of 1% per month from December 24, 1977 until
fully paid;
c. to pay defendants P200,000.00 as moral damages;
d. to pay defendants P100,000.00 as exemplary damages;
10

e. to pay defendants P25,000.00 as and for attorney’s fees; plus costs of the suit.
SO ORDERED.”
Page
 This Decision became final and executory on 27 May 1989.10

On 24 July 1989, the RTC QC issued a Writ of Execution on the “goods and chattels of
plaintiff COMMERCIAL CREDIT CORPORATION.”11 When the writ was returned unsatisfied on
11 December 1989, Reynoso filed a Motion for Issuance of Alias Writ of Execution and, thereafter,
a Motion for examination of the financial records of CCC-QC. In the course of opposing his Motion,
CCC-QC President Dr. Concepcion vda. de Blaylock (Blaylock) alleged that the company had not
been operating for about 10 years, and that “the Commercial Credit Corporation of the Philippines
took possession of the premises of the office of CCC-QC, together with all its records and
documents. ...”12

On 16 August 1991, the RTC QC again ordered the issuance of the alias writ against “the
goods and chattels of plaintiff COMMERCIAL CREDIT CORPORATION.”

There being no leviable properties of CCC-QC, Sheriff Edgardo Tanangco reported that on
23 August 1991, he “levied whatever rights, interests, titles, participation said plaintiff may have”
over the Valle Verde property, which was registered in the name of “Commercial Credit
Corporation.” The said property was sold on execution on 20 September 1991 by Deputy Sheriff
Edgardo Tanangco at public auction, with Reynoso as the highest and sole bidder in the amount
of P650,151.50. This amount was credited as partial satisfaction of the judgment
obligation.13Meanwhile, the Notice of Sheriff’s Sale was sent to “General Credit Corporation
(Formerly Commercial Credit Corporation, ACE Bldg., RADA corner dela Rosa Sts., Makati, Metro
Manila” on 2 October 1991, but this notice was returned with the notation “RTS UNKNOWN AT
GIVEN ADDRESS 10-9.”

On 29 October 1991, Deputy Sheriff Tanangco issued a Sheriff’s Certification of Sale of the
levied property.

On 11 November 1991, Reynoso filed a second Alias Writ of Execution, arguing that CCC-
QC and CCC were one and the same, and praying that the sheriff be directed to levy upon CCC’s
personal and real properties. Attached to the Motion was the 23 February 1990 Decision of Hearing
Officer Antonio Esteves in Securities and Exchange Commission (SEC) Case No. 2581, entitled
“Avelina G. Ramoso, et al. v. General Credit Corporation et al.,” which held that CCC (then known
as GCC) and CCC-QC, together with others, were one and the same corporation.14

On 22 November 1991, CCC’s counsel appeared before the RTC QC and was granted time
to file a comment on the Alias Writ of Execution.15 In its Special Appearance and Opposition,16 CCC
alleged that it was not a party to the case, and that the cited Decision in SEC Case No. 2581 was
still pending resolution of the SEC en banc. CCC also moved that further levies on its other
properties be stopped. On 9 December 1991, the RTC QC ordered the issuance of the second alias
writ.17 On 18 December 1991, CCC filed an Omnibus Motion 1) to reconsider the Order of 9
December 1991; 2) to quash the alias writ of 21 August 1991; and 3) to nullify the sale of its Valle
Verde property.18Attached to this Motion was a copy of a SEC Certification that SEC Case No. 2581
was still pending. This Omnibus Motion was denied by the RTC QC in its 13 February 1992 Order
due to the admission by CCC in the latter’s pleading that it was an alter ego of CCC-QC.19

To recover its Valle Verde property, CCC filed with the Regional Trial Court of Pasig City,
Branch 167 (RTC Pasig),20 on 21 February 1992, an action for terceria (third-party claim) against
Reynoso and Quezon City Deputy Sheriff Edgardo Tanangco. CCC prayed that (1) the levy on the
Valle Verde property be declared void; (2) respondents be enjoined from consolidating ownership
over the property pending resolution of the suit; and (3) respondents be enjoined from making
further levies on petitioner’s properties to answer for any liability under the Decision in Civil Case
No. Q-30583.

The RTC Pasig denied the prayer for injunction of CCC, prompting the latter to file on 13
March 1992 a Petition for Certiorari with prayer for preliminary injunction and/or temporary
restraining order. Docketed in the Court of Appeals (CA) as CA-G.R. SP No. 27518, the Petition
11

was filed against Reynoso, Deputy Sheriff Tanangco, and Judge Flores of RTC Pasig (and also,
Page

subsequently, against Judge Solano of RTC QC).

 Meanwhile, noting that the records failed to show that CCC had taken a legal step to
suspend the implementation of its Order dated 9 December 1991, the RTC QC issued another Alias
Writ of Execution against the goods and chattels of petitioner GCC on 6 March 1992.21

On 6 April 1992, the RTC QC’s issuance of the second Alias Writ of Execution was impugned
by the CCC in the CA via a Petition for Certiorari with prayer for preliminary injunction and/or
temporary restraining order, docketed as CA-G.R. SP No. 27683. RTC QC Judge Solano, Reynoso
and Deputy Sheriff Tanangco were named respondents therein.

Meanwhile, CCC/GCC changed its name to Penta Capital Finance Corporation (Penta) on
1 December 1993.

The CA consolidated CA-G.R. SP Nos. 27683 and 27518. On 7 July 1994, it granted the
Petition, nullified the Alias Writ of Execution, and declared that the proper remedy for the Valle
Verde property was the terceria filed with the Pasig court.22

Reynoso questioned this CA Decision via a Petition for Review before the Supreme Court
(SC), docketed as G.R. No. 116124-25 and entitled “Reynoso v. Court of Appeals.” On 22 November
2000, this Court issued a Decision23overturning that of the CA. CCC filed a Motion for
Reconsideration, but it was denied by this Court on 6 August 2001.

On 21 December 2001, CCC registered with the Sheriff of Quezon City a third-party claim
(with an Affidavit of Third-Party Claim executed by petitioner’s president, Jovencio Cinco) on its
Valle Verde property; two condominium units under Condominium Certificates of Title Nos. 5462
and 5463; bank deposits; and various office equipment, all subjects of the Notice of Garnishment
and Notice of Levy upon personal properties. CCC stated that it was exercising its right of
redemption ad cautelam over the Valle Verde property. It remitted to the sheriff Metrobank
Cashier’s Check No. 2610004069 in the amount of P703,987.36, inclusive of interest amounting to
P53,095.71.

On 12 March 2002, CCC filed with the RTC QC a Motion to Quash the Alias Writ of
Execution on its Valle Verde property and the Alias Writ of Execution dated 6 March 1992
pertaining to its two condominium units on the 10th floor of the ACT Tower Condominium.

Judge Teodoro Bay, who took over from Judge Solano upon the latter’s retirement as
presiding judge of the RTC QC, denied the Motion to Quash the Writ of Execution in the Order
dated 3 April 2002. Judge Bay reasoned that, as finally decided by the SC in Reynoso v. Court of
Appeals,CCC-QC, CCC, and GCC were one and the same corporation.

In an Order dated 19 April 2002, the RTC QC directed the issuance of another Alias Writ
of Execution to implement its 1985 Decision in response to Reynoso’s Ex Parte Motion to Issue an
Alias Writ of Execution on the ground that while the ruling in CA-G.R. SP No. 27518 had
previously enjoined the sheriff from levying on the properties of CCC and selling them on
execution, the SC had already overturned the said CA ruling.

The Alias Writ of Execution was then issued, commanding Sheriff Angelito Acosta (who had
taken the place of deceased Deputy Sheriff Edgardo Tanangco) to execute on the “goods and
chattels of Commercial Credit Corporation of Quezon City/General Credit Corporation/Penta
Capital Finance Corporation.”

On 29 April 2002, CCC filed an Urgent Consolidated Motion praying that 1) the execution
be quashed; 2) the sheriff be required to file a monthly report in accordance with Section 14, Rule
39 of the Rules of Court; and 3) the RTC QC declare itself without jurisdiction to resolve with
finality the issue of piercing the corporate veil, since the issue was within the jurisdiction of the
RTC Pasig City in Civil Case No. 61777 (92).
12

In an Order dated 23 May 2002, the RTC QC denied CCC’s Consolidated Motion and
Page

required the parties to submit their own computation of the amount of execution. Reynoso filed his
Compliance; CCC filed a Compliance Ad Cautelam and, the next day, a Motion to resolve/clarify
in the interest of substantial justice. The Motion of CCC sought to reopen discussions on the matter
of piercing its corporate veil of fiction.

In its Order dated 2 August 2002, the RTC QC denied CCC’s Motion to resolve/clarify,
reiterating that the issue had already been resolved with finality by the SC.

In its Order dated 9 August 2002, the RTC QC issued an Order determining that the sum
of P71,768,227.3524minus the outstanding obligation of Reynoso to CCC was the proper
computation of the award in his favor. In its Order dated 3 October 2002, the RTC QC reiterated
its 9 August 2002 Order.

On 8 October 2002, CCC filed with the CA another Petition for Certiorari and Prohibition,
docketed as CA-G.R. SP No. 73207 and entitled “Penta Capital Finance Corporation v. Judge
Teodoro Bay, et al.,” to nullify the RTC QC Orders dated 3 and 19 April, 23 May, 2 and 9 August
and 3 October 2002 as well as the Alias Writ of Execution dated 23 April 2002 and Notice of
Sheriff’s Sale dated 17 May 2002.

In its Decision dated 30 July 2003,25 the CA declared as excessive the interests fixed by
the RTC QC. It held that Reynoso was entitled to recover from CCC only the amount of
P13,947,240.04, based on the computation26 made in the presence of the parties by the CA’s chief
accountant, Carmencita Angelo. The appellate court, however, affirmed the RTC QC Orders dated
3 and 19 April, 23 May, 2 and August, and 3 October 2002.

Both parties filed their respective Motions for Reconsideration of the Decision of the CA,
which subsequently denied both motions.

CCC then filed an appeal by certiorari with this Court, docketed as G.R. No.
162100, wherein it raises the following issues: (1) the interest computation made by the RTC
QC was grossly excessive; (2) the execution is tainted with irregularities; and (3) the RTC QC judge
should have suspended execution of the properties of petitioner and allowed it to pursue its third-
party claim to its logical conclusion.

Respondent Reynoso also filed a Petition for Review with this Court, docketed as
G.R. No. 162395, questioning the CA’s reduction of the the sum due him under the RTC QC
Decision. Reynoso argues that the CA failed to consider that the two judgment amounts were
money market placements that were “rolled over.” Thus, the principal (original placement) earns
interest (in this case, 14% per annum) after the lapse of the agreed period. The earned interest
plus the principal becomes the new principal/placement, which again earns interest when the
placement is rolled over. Under the terms of the money market placement, the outstanding balance
earns 14% interest per annum, until both principal and interest are paid. Aside from these interest
earnings, a 12% interest per annum on the entire judgment award is applied also, as the awards
partook of the nature of forbearance of credit when it remained unsatisfied after the finality of the
judgment.

In its Resolution dated 27 April 2004, this Court ordered the consolidation of the two cases.

Consolidated Issues

1. Whether the CA seriously erred in not holding that execution proceedings before the RTC
QC was tainted with irregularities
2. Whether the CA seriously erred in not finding that the RTC QC should have suspended
execution of the properties of CCC/Penta and allowed the latter to pursue its third party
claim to its logical conclusion
3. Whether the CA seriously erred in holding that Penta’s right of redemption had prescribed
4. Whether the CA seriously erred in its computation of interest
13

Our Ruling
Page

We affirm the CA Decision in toto.

On the first issue
In Reynoso v. Court of Appeals,27 CCC/GCC/Penta assailed the validity of the execution
proceedings in the RTC QC on various grounds, mainly the fact that the latter had allowed the
levy and sale of the Valle Verde property. Allegedly, this property was not owned by judgment
debtor CCC-QC, but by CCC/GCC/Penta itself—an entity separate and distinct from the former.
We held in the said case, though, that since the circumstances warranted piercing the corporate
veil, judgment in favor of Reynoso may be executed against GCC (now Penta), an alter ego of CCC-
QC. CCC/GCC/Penta presented the same arguments in Reynoso, as it has done now. Even
assuming that any of its present arguments is novel, it would be unavailing if it is based on the
same factual milieu under which the Reynoso ruling was made. The orderly administration of
justice and basic considerations of fair play abhor a piecemeal presentation of points of law,
theories, issues, and arguments.28 At any rate, CCC/GCC/Penta fails to identify any change in the
facts upon which Reynoso was predicated as to warrant a different conclusion in the present case.

Thus, the Court’s ruling in Reynoso may be considered “the law of the case” in respect of the
validity of the execution proceedings against CCC/Penta. The principle of the law of the case is
embodied in Section 47(b) and (c), Rule 39 of the Rules of Court.29 As we explained in Litton Mills,
Inc. v. Galleon Trader, Inc.,30 this principle holds that “(w)hatever has been irrevocably established
as the controlling legal rule between the parties in a case continues to be the law of the case,
whether correct on general principles or not, so long as the facts on which such decision was
predicated continue to be facts of the case before the Court. Once a judgment has become final, the
issues therein should be laid to rest.”
As Reynoso has long become final and can no longer be modified, the continued insistence
of CCC/GCC/Penta that the execution proceedings were invalid cannot be entertained.

On the second issue

CCC insists that the RTC QC should have suspended execution insofar as the properties of
CCC/Penta were concerned, and that the trial court should have allowed petitioner to pursue its
third-party claim to its logical conclusion.

We disagree. As discussed in the first section, CCC and CCC-QC are one and the same entity
in the context of the subject execution of the judgment in favor of Reynoso. Meanwhile, the remedy
of terceria is available only to a third person other than the judgment obligor or the latter’s agent
who claims a property levied on.31 Hence, not being a third party to the execution proceedings, the
remedy of terceria is not available to CCC/Penta.

On the third issue

Again, we find no error in the Decision of the CA, holding that Penta’s right of redemption
has prescribed. We quote with approval the pertinent portion of its assailed Decision in this regard:
“Penta’s right of redemption over the Valle Verde property was recognized by respondent Judge in the
Order dated April 3, 2002, considering that CCC-QC, CCC and GCC, which was later renamed Penta
Capital, are one and the same corporation as ruled with finality by the Supreme Court. Nonetheless, we
agree with Reynoso that Penta Capital can no longer exercise its right to redeem the Valle Verde property.
Record shows that the Valle Verde property, which was registered in the name of CCC under TCT No.
29940, was levied upon and sold at public auction on October 29, 1991 with Reynoso as the highest bidder.
The certificate of sale in favor of Reynoso was registered on TCT No. 29940 on November 7, 1991. Section
28, Rule 39 of the Rules of Civil Procedure provides that the judgment obligor or redemptioner may redeem
the property from the purchaser at any time within one (1) year from the date of the registration of the
certificate of sale. Inasmuch as one year is composed of 365 days, CCC or its successors-in-interest had only
until November 6, 1992 within which to redeem the Valle Verde property. However, it was only on December
21, 2002 that Penta Capital sent a notice to the Sheriff that it was redeeming ad cautelam the Valle Verde
property, together with a cashier’s check for P 703,897.36, inclusive of interest. On February 20, 1992,
Penta Capital filed with the Regional Trial Court of Pasig City a third-party claim with respect to the Valle
Verde property and other properties that may be levied upon by Deputy Sheriff Edgardo C. Tanangco of
respondent court.

Penta Capital’s argument that it could not redeem the Valle Verde property within the one year
14

period, which expired on November 6, 1992, in view of the temporary restraining order issued by this Court
on March 13, 1992, the writ of preliminary injunction issued on April 7, 1994 and the decision dated July
Page

7, 1994 of this Court in CA-G.R. SP No. 27518, does not persuade us.
 As correctly pointed out by Reynoso, the injunction issued by this Court in CA-G.R. SP No. 27518
did not cover the Valle Verde property. The temporary restraining order and injunction issued by this Court
in said case merely enjoined the respondents therein from conducting an auction sale on execution of the
properties of GCC, as well as from initiating similar acts of levying upon and selling on execution other
properties of the latter until Civil Case No. 61777 before the Regional Trial Court of Pasig City shall have
been finally terminated. On the other hand, the levy and sale of the Valle Verde property had already been
consummated when the temporary restraining order and injunction were issued by this Court. Settled is
the rule that consummated acts can no longer be restrained by injunction. Injunction would not lie where
the acts sought to have been enjoined had already become a fait accompli or an accomplished or
consummated act.

The right of redemption should be exercised within the period prescribed by law. The right to redeem
becomes functus officio on the date of its expiry and its exercise after the period is not really one of
redemption but a repurchase.”32

On the fourth issue

The RTC QC ruled that CCC/GCC/Penta should pay Reynoso the following amounts:
a. to pay defendant the sum of P185,000.00 plus 14% interest per annum from October 2, 1980
until fully paid;
b. to pay defendant P3,639,470.82 plus interest thereon at the rate of 14% per annum from June
24, 1981, the date of filing of Amended Answer, until fully paid; from this amount may be
deducted the remaining obligation of defendant under the promissory note of October 24, 1977,
in the sum of P9,738.00 plus penalty at the rate of 1% per month from December 24, 1977 until
fully paid;
c. to pay defendants P200,000.00 as moral damages;
d. to pay defendants P100,000.00 as exemplary damages;
e. to pay defendants P25,000.00 as and for attorney’s fees; plus costs of the suit.

Based on the above figures, the RTC QC eventually computed the award to Reynoso as
P71,768,227.35. When this matter reached the CA, its chief accountant computed the judgment
award at P13,947,240.04, after both parties had agreed to deduct from the total judgment award
the sum of P 650,150.50 paid by Reynoso for the Valle Verde property. The CA’s computation is as
follows:
A. Principal Amount P 185,000.00
Interest therein @ 14% per annum from
October 2, 1980 up to November 30, 2002 573,986.57
Total P 758,986.57

B. Principal Amount P 3,639,470.82

Interest therein @ 14 per annum from
June 24 to November 30, 2002 9,912,788.77
P13,552,259.59
Less: The sum of P9,738.00
Penalty @ 1% per mo. from
December 24, 1977 up to
November 24, 2002 29,116.62 P 38,854.62
Sub-total P13,513,404.97
Less: Bid Price of Auctioned Property
bought by defendant P 650,151.50
Total P12,863,253.47
C. Moral Damages P 200,000.00
D. Exemplary Damages P 100,000.00
E. Attorney’s Fees P 25,000.00
TOTAL AMOUNT DUE as of
November 30, 2002 P13,947.240.04
* Note 1 Penalty of 1% per month on P9,738 loan is computed from December 24, 1997 up to November

24, 2002 only.

** Note 2 Amount of Bid Price on Auctioned sale in the amount of P650,151.50 was already deducted from

the total amount due.”33

15

Two things must be priorly explained regarding the above computation of the CA. First, the
principal amounts in items A and B (P185,000.00 and P3,639,470.82, respectively) were subjected
Page

to a 14% per annum interest only until 30 November 2002, because the CA’s chief accountant who
prepared the computation on 21 November 2002 had anticipated that the parties would be settling
the matter by the end of November 2002. Second, the interest on the sum of P9,738 (which was
deducted from the principal amount in item B) was subjected to a penalty until 24 November 2002,
only because the RTC QC judgment pegged the interest rate thereon at 1% per month, commencing
on 24 December 1977. Accordingly, the interest was computed on a month-to-month basis.

Both parties impugn the computation by the CA of interest on the judgment awards. On the
one hand, Reynoso claims that its computation was deficient, because two items in the judgment
pertain to money market placements. These placements were subject to “roll overs”—in this case,
pertaining to the reinvestment of the principal together with its earned interest of 14% per annum,
which shall earn another 14% per annum, and so forth. Reynoso further alleges that the resulting
amount should be subjected to the 12% per annum legal interest on the judgment awards after
finality of the judgment, pursuant to the rule laid down in Eastern Shipping Lines, Inc. v. Court of
Appeals34 and Crismina Garments, Inc. v. Court of Appeals.35 On the other hand, CCC claims that
the CA’s computation was excessive, because the judgment award should be subject to a 12%
interest rate only.

We uphold the CA ruling on the computation of interest on the judgment awards pertaining
to the principal amounts P185,000.00 and P3,639,470.82.

Referring to Eastern Shipping Lines and Crismina Garments, which Reynoso claimed to be
supportive of his position, the CA elucidated as follows:
“The above-mentioned cases state that the imposition of interest at the rate of 12% per annum from
finality of judgment applies only where the rate of interest decreed in the judgment of the court is only
6% per annum, in accordance with Article 2209 of the Civil Code. Thus, the dispositive portions of the
decisions in the above-mentioned cases provided for payment of interest at 6% per annum from the date of
the filing of the complaint until the finality of the judgment and a 12% interest per annum, in lieu of 6%
interest per annum, upon finality of the judgment until it is fully satisfied. In the case at bench, the decision
in Civil Case No. Q-30583 ordered the payment of interest at the rate of 14% per annum from October 2,
1980, with respect to the amount of P185,000.00, and from June 24, 1981, with respect to the amount of
P3,639,470.82, until the same shall have been fully paid. Inasmuch as the rate of interest imposed in Civil
Case No. Q-30583 is even higher than 12% per annum, Reynoso is no longer entitled to the payment of 12%
interest upon finality of the judgment.”36

In fine, Eastern Shipping merely provides that in the absence of a written stipulation, the
applicable interest rate to be imposed in judgments involving a forbearance of credit shall be
12% per annum in accordance with Central Bank (CB) Circular No. 416. On the other hand, if the
judgment refers to payment of indemnities in the concept of damages arising from a breach or a
delay in the performance of obligations in general, the applicable interest rate shall be 6% per
annum, in accordance with Article 2206 of the Civil Code. Both interest rates apply from the time
of judicial or extrajudicial demand until the finality of the judgment. However, from the time the
judgment of the court awarding a sum of money becomes final until it is satisfied, the award it
granted shall be considered a forbearance of credit, whether or not the judgment award actually
pertained to one. Accordingly, during this interim period, the interest rate of 12% per annum for
forbearance of money shall apply.37

In the present case, the parties agreed in writing to apply an annual interest rate of 14% to
the amounts covered by the Promissory Notes. The trial court ruled that after the finality of
judgment, as long as the subject amounts remain unpaid, they shall bear 14% annual interest in
lieu of the default interest rate for forbearance of credit, which is 12% per annum. The RTC QC’s
application of 14% interest rate from the finality of the judgment until its full satisfaction is
permitted to remain herein, only because the judgment has become final—as it was not
impugned at all before the CA—and therefore, can no longer be modified. It is not meant to
overturn the Court’s consistent application of the 12% interest rate in court judgments awarding
a sum of money from the time it becomes final until it is satisfied.

We further uphold the CA’s rejection of Reynoso’s computation, which incorporates “roll
overs” of the said two items in the judgment awards.
16
Page
 Reynoso argues that the “roll over” could be implied from the trial court Decision,
considering that the two items in the judgment (P185,000.00 and P3,639,470.82) pertained to his
money market placements, and considering further that the trial court applied such rollovers to
its subsequent computation.

We are not convinced. The mere fact that RTC QC’s subsequent computation applied
rollovers is an insufficient basis to rule that these were proper. We stress that “execution must
conform to that ordained or decreed in the dispositive part of the decision; consequently, where the
order of execution is not in harmony with and exceeds the judgment which gives it life, the order
has pro tanto no validity.”38 In the present case, we observe that nowhere in the RTC QC judgment
is there a provision calling for the “roll over” of the P185,000.00 and P3,639,470.82 awards.

Also, while it is true that the said judgment awards correspond to the amounts Reynoso
invested as money market placements, he himself points out in his Petition that each placement
is a separate and distinct transaction. He explains that a rollover is a “new and independent
transaction where the amount of money market placement is considered as a fresh infusion of a
principal amount regardless of the fact that part of the amount ‘rolled over’ was in reality the
interest earned from the original placement or the immediately preceding ‘roll-over’
transaction.”39 Thus, a money market transaction does not necessarily include a rollover, which
would take place only if the parties agree to the reinvestment of the proceeds of the earlier money
market transaction. The parties’ agreement to a rollover is a separate transaction whereby the
new placement, consisting of the original placement plus the earned interest, becomes the new
placement that shall earn interest at the end of the agreed period. In the present case, it does not
appear that there was an agreement between CCC-QC and Reynoso for the automatic rollover of
all of his placements.

Finally, Reynoso is entitled to interest on the moral and exemplary damages, as well as the
attorney’s fees awarded him. As stressed in our above discussion of Eastern Shipping, an award of
a sum of money shall be considered as a forbearance of credit once it becomes final, whether or not
the award actually pertained to one. Hence, from its finality until its satisfaction, the judgment
award to Reynoso of moral and exemplary damages, as well as attorney’s fees, shall be subject to
the interest rate of 12% per annum.

WHEREFORE, premises considered, the consolidated Petitions are hereby DENIED. The
Court of Appeals assailed Decision and Resolution are AFFIRMED with MODIFICATION in that
an interest rate of 12% per annum is to be applied to the awards of moral and exemplary damages
and attorney’s fees from the finality until the satisfaction of the 14 January 1985 Decision of the
Regional Trial Court of Quezon City, Branch 86 in Civil Case No. Q-30583.

SO ORDERED.
Consolidated petitions denied, judgment and resolution affirmed with modification.
Notes.—The expiration of the one-year redemption period foreclosed petitioner’s right to
redeem the subject property and the sale thereby became absolute—the issuance thereafter of a
final certificate of sale is a mere formality and confirmation of the title that is already vested in
respondent. (Delos Reyes vs. Ramnani, 621 SCRA 254 [2010])
In view of Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling on
interest effective January 1, 1983, parties to a loan agreement have wide latitude to stipulate
interest rates; Such stipulated interest rates may be declared as illegal if the same is
unconscionable. (Toledo vs. Hyden, 637 SCRA 540 [2010])

——o0o——
17
Page
 G.R. No. 89870. May 28, 1991. *

DAVID S. TILLSON, petitioner, vs. HON. COURT OF APPEALS, HON. JUDGE LOURDES K.
TAYAO-JAGUROS, JOHN M. COONEY, DEPUTY SHERIFF ROLANDO A. BALINGIT, and LT.
COL. JUAN REYNALDO, respondents.

Actions; Replevin; From the allegations set out in Cooney’s complaint, and the affidavit accompanying
it, as well as his filing of a bond in double the value of the property sought to be recovered, it is clear that the
action filed is one for replevin under Rule 60.—That the action commenced by Cooney against Tillson, et al.
on April 12, 1989, in the Manila Regional Trial Court of Manila was one for replevin—and the provisional
remedy therein applied for, the writ or order of delivery just described—hardly admits of doubt. The facts
set out in his complaint and the affidavit accompanying it, as well as his filing of a bond in double the value
of the property sought to be recovered, show that Cooney filed the action precisely with Rule 60 in mind.
This is evident from a perusal of Sections 1 and 2 of the Rule. x x x As will be noted, Cooney’s complaint
incorporates the factual allegations necessary to bring his cause within the operation of Rule 60 of the Rules
of Court. In his complaint he asserts that he is the owner of the “Creala 40” in virtue of a deed of sale
executed in his favor on December 5, 1988 by Seacraft; that he was being deprived of possession thereof by
Tillson, who was acting in conspiracy with the Sheriff and other persons; that as owner, he was entitled to
a “preliminary order for the immediate delivery” upon “a bond in a reasonable amount,” and, “after trial of
the issues,” to have his ownership vindicated and recover damages from the defendants. Annexed to his
complaint were (1) his affidavit stating inter alia that “the boat would be probably valued conservatively at
P300,000.00” and “has not been taken for tax assessment or fine pursuant to law, or seized under execution,
or an attachment against the property of herein plaintiffs,” and (2) a bond in the amount of P800,000.00
entitled “Plaintiffs’s Bond for Manual Delivery of Personal Property (Replevin Bond).” And that it was so
understood by the Regional Trial Court can scarcely be doubted, too. In her Order of April 17, 1989, Judge
Jaguros directed the issuance of “the corresponding Writ of Replevin of Personal Property.” Moreover, a writ
denominated “writ of replevin” issued on the same day, pursuant to which—and to another order dated
April 20, 1989, supra—the sheriff took possession of the “Creala 40” on April 20, 1989. The case is not
removed from the operation of Rule 60 by the fact that after the property was taken from the defendant it
was not turned over to the plaintiff (Cooney) but to the Coast Guard, on instructions of the Trial Court.
That circumstance is totally inconsequential. For one thing, it does not alter the reality of the defendant’s
loss of possession; it is unreasonable to approve of the taking of the boat from his possession pursuant to
Rule 60, and then deny him the remedies prescribed by that selfsame rule; and if the seizure was not
effected in accordance with Rule 60, then the seizure was unjustified.

Same; Same; Bonds; There is no provision in Rule 60 imposing the requirement that service of the
counterbond on the plaintiff must be made within five (5) days after the taking of the property by the officer.—
The counter-bond was posted within the period prescribed by Rule 60, i.e., “within five (5) days after the
taking of the property by the officer,” and “before the delivery of the property to the plaintiff.” A copy of the
counter-bond was sent to the plaintiff (Cooney) on the fifth day “after the taking of the property by the
officer.” The copy having been sent by registered mail, it was received after said fifth day. Cooney does not
deny that the copy of the bond was indeed sent to him on the fifth day, and that he actually received it
afterwards; and it is a fact that on the day on which the Trial Court re-scheduled the hearing on the motion
for approval of the bond and for return of the property, May 5, 1989, Cooney had already received the copy
of the bond. What he postulates is that his receipt of the counter-bond afterthe fifth day, was a fatal defect
proscribing return of the vessel to Tillson, a proposition which the Court of Appeals sustained. The
proposition is unacceptable to the Court. It accords unwarranted importance to technicality. If technicality
were indeed to be the order of the day, Tillson could also claim timeliness of Cooney’s receipt of a copy of
the bond since, as the record shows, Cooney did receive the copy within the time stated by Section 5 of Rule
60, i.e,. “before the delivery of the property to the plaintiff.” He could also claim that the requirement of
service of the counter-bond on the plaintiff cannot be all that important since there is no provision in Rule
60 imposing that requirement, which appears to have been derived simply from the general prerequisite
laid down for pleadings, motions, notices, orders and other papers filed with the court. In Case and Nantz
v. Jugo, et al., a 1946 case, where a copy of the counter-bond was never given the plaintiff although it had
been seen and read by the latter’s attorney, this Court held that there had been substantial compliance
with the requirement of service of the defendant’s counter-bond. “Since the sole purpose of furnishing a
copy of the counter-bond,” said the Court, “is to enable the plaintiff to see if the bond is in the prescribed
form and for the right amount and to resist the return of the property to the defendant if it is not, that
opportunity was afforded the petitioners to the fullest extent when their attorney was shown in the sheriff’s
office the defendant’s counterbond. After the plaintiff’s attorney read or saw the counter-bond, service of a
copy thereof on him became purposeless, unnecessary formality. There is no reason why the maxim, ‘equity
regards substance rather than form,’ should not hold good here.” Considering the established facts, and the
18

additional circumstance that the record shows no prejudice whatever to have been caused to plaintiff
Cooney by the omission of service of the counter-bond on him, there is no reason why the same disposition
Page

should not be made here as in Case, and substance rather than form be made to prevail.
 Same; Same; Third-Party Claims; A party to the action has no business filing a third-party claim over
property involved in that action and which he himself claims to belong to him.—One last word, concerning
the third-party claim filed by Seacraft over the “Creala 36” and “Creala 40.” These two boats, it will be
recalled, constituted the res in Civil Case No. 54578 and had been levied on in execution of the default
judgment in said case against Seacraft’s co-defendant, Leonard La Pierre. Seacraft filed its claim
supposedly in accordance with Section 17, Rule 39. x x x It should be apparent that this provision, and
others like it, providing for an expeditious mode of recovering property alleged to have been wrongfully or
erroneously taken by a sheriff pursuant to a writ of execution or other process, has reference to a stranger to
the action, and not to a party therein. The remedy thereby granted is meant to accord said stranger, whose
property is taken by the sheriff to secure or satisfy a judgment against a party to said action, a speedy,
simple, and expeditious method of getting it back. All he has to do is draw up “an affidavit of his title thereto
or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the
officer making the levy, and a copy thereof upon the judgment creditor.” If the sheriff is persuaded of the
validity of the third party’s claim, then he gives back the property. The purpose of the provision is achieved.
On the other hand, if the sheriff is not convinced and opts to retain the property (requiring the judgment
creditor to post an indemnity bond to answer for any liability he may incur by reason of such retention), the
third party may then vindicate “his claim to the property by any proper action.” A party to the action,
however, has no business filing a third party claim over property involved in that action and which he
himself claims to belong to him. He is evidently not the stranger, or third party, contemplated by the
aforementioned Section 17, Rule 39. He has the standing, and the opportunity at any time, to ask the Court
for relief against any alleged errors, excesses or irregularities of the sheriff. It is incongruous to seek relief
from a sheriff which the Court itself could as easily and expeditiously grant.

PETITION to review the decision of the Court of Appeals.

NARVASA, J.:

Sometime in May, 1987, David S. Tillson brought suit in the Regional Trial Court at Pasig, Rizal
against (1) Leonard La Pierre (alleged to be doing business under several trade names, viz.: La
Pierre International Yachts, La Pierre Distributors International, La Pierre Contracting Co., Ltd.)
and (2) Seacraft International Corporation. The action was described as one for “specific
performance and damages with prayer for preliminary injunction and restraining order.” It was
docketed as Civil Case No. 54587 and assigned to Branch 165.
Briefly, Tillson’s complaint alleged that:

1. he entered into a contract with Leonard La Pierre for the construction of a yacht, named “Creala
40,” at a cost of U.S. $65,000.00, to be delivered to Tillson in Manila in July, 1986;
2. it was Seacraft International Corporation that actually undertook the construction of the boat,
advances on the price being made by Tillson;
3. the money thus advanced was, however, used by La Pierre and Seacraft for the construction, not of
the “Creala 40,” but of another vessel, “Creala 36.”

Upon these factual averments, Tillson prayed that both defendants be ordered (a) to
complete construction of “Creala 40,” removing from “Creala 36” all parts placed therein originally
intended for “Creala 40,” and using and placing them in the latter; and (b) jointly and severally, to
pay to Tillson such damages as might be adjudged proper and attorney’s fees of U.S. $5,000.00.

On Tillson’s application, the Trial Court issued two (2) writs: one, of preliminary injunction
forbidding the removal of “Creala 40” from its location at the time, and the other, of preliminary
attachment which was levied on “Creala 36.”

Summonses were duly served on both defendants.

Only Seacraft filed answer, denying Tillson’s claims to the vessels and asserting that there
was no privity between it and Tillson relative to the construction of the “Creala 40.” La Pierre
failed to answer within the reglementary period and was consequently declared in default.

The Court thereafter received Tillson’s evidence against La Pierre ex parte and on the basis
thereof, rendered judgment by default against La Pierre on March 2, 1988, which contained the
following dispositive portion:
19

“WHEREFORE, judgment is hereby rendered in favor of the plaintiff as against defendant Leonard La
Page

Pierre and the latter is hereby ordered to pay plaintiff the following:
 U.S. $52,000.00, representing advances made by plaintiff to defendant, plus interest of 12% per
annum from 1985 until fully paid; moral damages, U.S. $5,000.00; actual damages, U.S. $10,000.00 and
attorney’s fees, U.S. $20,000.00, and costs of suit.
The judgment became final and executory, no appeal having been taken by La Pierre. The action
however continued as regards his co-defendant, Seacraft International Corporation (hereafter,
simply Seacraft).

At Tillson’s instance, the Trial Court authorized execution of the default judgment against
La Pierre. In July, 1988, the Sheriff levied on, and subsequently took possession of, the two (2)
yachts above mentioned, “Creala 36” and “Creala 40.”

Seacraft filed a third-party claim in respect of both vessels in accordance with Section 17,
Rule 39 of the Rules of Court, contending that the yachts belonged to it, and not to La Pierre.
Tillson thereupon posted a bond to indemnify the Sheriff against such third-party claim insofar as
it was asserted against “Creala 40.” The execution sale of the “Creala 40” was then scheduled and
held on February 7, 1989 by the Sheriff, resulting in the boat’s being struck off to Tillson as the
highest bidder.
On October 10, 1988, the “Creala 36” was somehow delivered by the Sheriff to Tillson’s counsel,
Atty. Alberto Guevara, Jr. It was thereafter moved by Tillson to the Manila Yacht Club.

But a claim for that same vessel (“Creala 36”) was being put forth by a certain John M.
Cooney, grounded on a compromise agreement between him and La Pierre. Indeed, there was then
pending in another branch of the same Regional Trial Court an action which had been commenced
by Cooney against La Pierre as early as October 15, 1987, docketed as Civil Case No. 55152. The
action was originally assigned to Branch 158, but was later transferred to Branch 166. On 1

November 11, 1988, said Branch 166 issued orders directing the sheriff to take immediate
possession of “Creala 36” and deliver it to Cooney after the expiration of five days. Tillson promptly
instituted a certiorari action in the Court of Appeals, praying for nullification of that order.
2

The Court of Appeals dismissed Tillson’s action, by Decision promulgated on December 27,
1988. It found that no valid levy on attachment had been effected of the “Creala 36” in Civil Case
3

No. 54587; that, on the other hand, the vessel had been properly attached by the Sheriff in Case
No. 55152 but subsequently had been “forcibly taken from the latter’s custody by petitioner Tillson
and his men who did not issue a receipt and showed no written order from any lawful authority.”
The Appellate Court consequently upheld the order for the seizure and retaking from Tillson of
the “Creala 36,” but prohibited release thereof to Cooney “pending the final disposition of his case.”

Cooney next turned his attention to the “Creala 40” which, as above stated, had been earlier
acquired by Tillson at the auction sale on February 7, 1989 in Civil Case No. 54587. On April 12,
1989, Cooney filed with the Regional Trial Court of Manila an action against Tillson for annulment
of the sale and for delivery thereof to him by way of replevin. In his complaint he alleged that by a
deed of sale executed on December 5, 1988 by Seacraft, on authority of its board of directors, he
had become owner of the “Creala 40;” that in conspiracy with the Sheriff and other persons, Tillson
had illegally acquired possession of the vessel; that as owner, he was entitled to a “preliminary
order for the immediate delivery” upon “a bond in a reasonable amount,”and, “after trial of the
issues,” to be declared owner and recover damages from the defendants. To his complaint he
attached (1) his affidavit stating inter alia that “the boat would be probably valued conservatively
at P300,000.00” and “has not been taken for tax assessment or fine pursuant to law, or seized
under execution, or an attachment against the property of herein plaintiff,” and (2) a bond in the
amount of P800,000.00 issued by Utility Assurance Corporation denominated “Plaintiff’s Bond for
Manual Delivery of Personal Property (Replevin Bond).” The action was docketed as Civil Case
No. 89-48520 and assigned to Branch 21, presided over by Hon. Lourdes K. Tayao-Jaguros. Judge
Jaguros ordered the issuance of “the corresponding Writ of Replevin of Personal Property,” on April
17, 1989. The “writ of replevin” issued on the same day but, as will shortly be narrated, custody of
the vessel was not taken by the Sheriff until three days later.
20

On April 20, 1989, Cooney filed a “Manifestation/Motion” stating that when the Sheriff went
to the place where the vessel was moored, he discovered that “the number of the boat (sought to
Page
be seized) had been deliberately tampered with,” and prayed that the Court authorize “the sheriff
x x and such other governmental agency or agencies deputized to aid x x (the sheriff) seize and
take possession (of the vessel) under the existing writ of replevin x x. Cooney filed an amended
manifestation on the same day, stating additional details of the alleged tampering, and adding to
his prayer the request that the Sheriff “deposit (the yacht) for safekeeping with the Philippine
Coast Guard, pending determination and/or resolution by this Honorable Court of this motion.”
On the same day, the Court granted the motion and ordered (a) “the sheriff to deposit the boat for
safekeeping with the Philippine Coast Guard at the Farola Compound, Binondo,” and (b) also “the
defendants and/or any person claiming rights under them x x to turn over the possession of the
said boat to the Philippine Coast Guard, in the meantime, until further orders x x.” In virtue of
this Order of April 20, 1989, the Sheriff took custody of the “Creala 40” and delivered it for
safekeeping to the Coast Guard. It is pertinent to state that both defendants, Tillson and Sheriff
Sofronio Villarin, while denying any hand in the alleged tampering, subsequently admitted “that
the boat, now in the possession of the Coast Guard upon pertinent Order x x is the Boat, subject
of the Replevin Order x x.”

On the following day, April 21, 1989, Tillson’s counsel, Mr. Alberto B. Guevarra, Jr., filed
an “Appearance and Urgent ExParte Motion.” He alleged that on April 20, he had “secured copy of
the complaint and related documents;” that his client was submitting himself to the jurisdiction of
the Court “as if summons had been served upon him,” that he was aware of the bond filed by
Cooney “in accordance with Section 3 of Rule 60, and another Order for the Coast Guard to take
custody of the boat; that he had no objection to the boat remaining temporarily with the Coast
Guard and/or the Sheriff; that Tillson had “valid defenses to traverse the complaint of Cooney;”
and he prayed that his appearance be made of record and—
“x x That the Sheriff and/or the Coastguard, be ordered to keep possession of the Boat, for the requisite five
(5) days, keeping said Boat in its present location, without moving same, until Tillson can file the necessary
counter Bond, in accordance with Section 5 of Rule 60 of the Rules of Court, or as otherwise may be
mandated, under Rule 60 of the Rules of Court.”
Then on April 25, 1989, Tillson filed thru counsel an “Urgent Motion for Approval of Bond (and)
Surrender of Creala 40,” submitting a bond issued by Domestic Insurance Co. of the Philippines
in the amount of P800,000.00 and praying that the boat seized from him by the sheriff “be ordered
returned/ surrendered/released to Tillson, in accordance with Section 5 of Rule 60 of the Rules of
Court.” A copy of the motion and the bond was sent by registered mail to and in due course received
by, Cooney’s attorney, Mr. Edilberto Barot, Jr.

However, the Trial Court refused to order re-delivery of the boat to Tillson. In an Order
dated May 5, 1989, it held that the provision for the return of seized property on a counterbond in
Rule 60—
“x x is not exactly applicable to the situation x x because said provision presupposes that possession is to
be given to the plaintiff; however, x x the writ precisely ordered that the possession and control of Creala
40 x x be put under the Coast Guard which is a disinterested third person; x x (and to) transfer x x
possession and control of the boat to either party would render the case moot and academic.”
Once again, Tillson went to the Court of Appeals. He filed a petition for certiorari, prohibition
and mandamus to nullify the Order of May 5, 1989 and compel re-delivery of the “Creala 40” to
him. This action was docketed as CA-G.R. SP No. 17586. Once again, the verdict of the Appellate
Tribunal went against Tillson. By Decision promulgated on September 1, 1989, the Court denied
4

his petition on two grounds: first, since the boat was not delivered to Cooney, “there is no replevin
in legal contemplation x x (and) no replevin bond and redelivery bond to speak of;” and second,even
if the case be considered one of replevin, Tillson had failed to furnish a copy of his redelivery bond
to the plaintiff within the time set therefor, in violation of the relevant requirements of Rule 60.

At the same time, Tillson also had to be dealing with Seacraft International Corporation.
While the matter of the ownership and custody of the “Creala 36” was being disputed in Civil Case
No. 55152 and CA-G.R. SP No. 16122, as above narrated, and before the public auction of the
“Creala 40” could be conducted (on February 7, 1989) in execution of the default judgment rendered
in Civil Case No. 54587, Seacraft made another move to get both boats back. It filed an “Urgent
Motion to Restrain Plaintiff and the Provincial Sheriffs and to Dismiss the Case against Seacraft.”
21

Tillson opposed the motion, contending that La Pierre had left the country to avoid prosecution
and deportation for circumvention of the immigration laws; that Seacraft and its ostensible officers
Page

were merely his dummies; and that Seacraft had breached the Corporation Code by
misrepresenting itself as a 100% Filipino corporation when in truth its stock was owned by La
Pierre, a foreigner. He prayed that the Court pierce the veil of corporate fiction in respect of
Seacraft and declare that La Pierre was the actual owner of “Creala 36” and “Creala 40.”

Chiefly on these issues, the Trial Court received the parties’ proofs and arguments.
Thereafter the Court rendered judgment on the merits, under date of February 7, 1990: (a) finding
5

that the evidence “abundantly established that defendant Seacraft International Corporation is a
mere alter ego of La Pierre, used and utilized by the latter to defraud his creditors,” and (b) making
the following dispositions, to wit:

1. “Declaring Seacraft International Corporation as a mere dummy of La Pierre, consequently,

annulling and disregarding its supposed separate corporation fiction and personality;
2. Ordering any and all assets in the name of Seacraft International Corporation which are not
otherwise encumbered, shall be answerable for the satisfaction of the Judgment, now final and
executory, issued by the court in favor of the plaintiff and against defendant La Pierre;
3. Dismissing the Complaint-in-Intervention of John Quinn for failure to prosecute and the
Counterclaim of defendant Seacraft x x, and
4. Ordering Seacraft to pay costs.

There was yet another proceeding involving Tillson and Seacraft in another forum, the Securities
& Exchange Commission. The proceeding, commenced at Tillson’s instance, SEC Case No. 3610,
was for the revocation of Seacraft’s certificate of registration on the ground of fraud. Summons was
served on Seacraft “thru its incorporating directors/stockholders.” However, no answer was ever
filed or appearance made in behalf of Seacraft. Seacraft was accordingly declared in default.

John M. Cooney filed a motion for intervention, alleging that he had acquired Seacraft’s
properties. The motion was denied by the Commission in an Order dated February 12, 1990, which
declared Cooney’s acquisition of Seacraft’s assets to have no relation to the cancellation of
Seacraft’s registration on account of fraud by its incorporators/directors. Cooney’s motion for
reconsideration was denied by Order dated February 12, 1990, the Commission considering it a
“mere scrap of paper” for failure of the movant to set the motion for hearing, and because filed
beyond the reglementary period therefor. Thereafter, evidence was received, after which a Decision
was rendered on

August 20, 1990 which—upon a finding that there was “ample proof” that “Seacraft was a
mere dummy of La Pierre and that La Pierre is the real owner of SEACRAFT”—revoked the
franchise or certificate of registration of Seacraft International Corporation and directed the
appointment of a receiver to liquidate its corporate affairs in accordance with Section 122 of the
Corporation Code.

Turning back to the decision promulgated by the Court of Appeals in CA-G.R. SP No.
17586—denying Tillson’s petition to nullify Judge Jaguro’s Order of May 5, 1980 in Civil Case No.
89-48520 and compel re-delivery of the “Creala 40” to him, it is Tillson’s thesis that fundamental
errors were committed by the Appellate Tribunal when in that judgment it ruled that—

1. the provisions of Rule 60 were inapplicable upon the following ratiocination:

“In essence, since the trial court ordered the boat to be custodia legis under the temporary physical control
of the Coast Guard, the provisions of Rule 60 on replevin find no application under the circumstances at
bar. As the boat was not delivered to plaintiff John M. Cooney, the replevin bond filed by him does not serve
the purpose for which the said bond was filed. Consequently, as there is no obligation on the part of John
M. Cooney to return the boat which was not placed in his possession, the filing of the counterbond for the
redelivery of the boat to petitioner becomes of no virtue whatsoever. “In fine, as there is no replevin in legal
contemplation, there is no replevin bond and redelivery bond to speak of x x .”;

and

2. assuming Rule 60 to be applicable, Tillson had failed to furnish a copy of his redelivery bond
to the plaintiff within the time set therefor by said rule, i.e., “within five (5) days from the
22

date the sheriff took possession of the property.” The term replevin is popularly understood
Page

as “the return to or recovery by a person of goods or chattels claimed to be wrongfully taken

 or detained upon the person’s giving security to try the matter in court and return the goods
if defeated in the action;” “the writ by or the common-law action in which goods and chattels
are replevied,” i.e., taken or gotten back by a writ for replevin;” and to replevy, means to
6

recover possession by an action of replevin; to take possession of goods or chattels under a

replevin order. Bouvier’s Law Dictionary defines replevin as “a form of action which lies to
7

regain the possession of personal chattels which have been taken from the plaintiff
unlawfully x x, (or as) the writ by virtue of which the sheriff proceeds at once to take
possession of the property therein described and transfer it to the plaintiff upon his giving
pledges which are satisfactory to the sheriff to prove his title, or return the chattels taken
if he fail so to do; the same authority states that the term, “to replevy” means “to re-deliver
goods which have been distrained to the original possessor of them, on his giving pledges in
an action of replevin.” The term therefore may refer either to the action itself, for the
8

recovery of personalty, or the provisional remedy traditionally associated with it, by which
possession of the property may be obtained by the plaintiff and retained during the
pendency of the action. In this jurisdiction, the provisional remedy is identified in Rule 60
of the Rules of Court as an order for delivery of personal property.

That the action commenced by Cooney against Tillson, et al. on April 12, 1989, in the Manila
Regional Trial Court of Manila was one for replevin—and the provisional remedy therein applied
for, the writ or order of delivery just described—hardly admits of doubt. The facts set out in his
complaint and the affidavit accompanying it, as well as his filing of a bond in double the value of
the property sought to be recovered, show that Cooney filed the action precisely with Rule 60 in
mind. This is evident from a perusal of Sections 1 and 2 of the Rule. 9

“SECTION 1. Application.—Whenever the complaint in an action prays for the recovery of possession of
personal property, the plaintiff may, at the commencement of the action or at any time before answer, apply
for an order for the delivery of such property to him, in the manner hereinafter provided.
“SEC. 2. Affidavit and bond.—Upon applying for such order the plaintiff must show by his own affidavit
or that of some other person who personally knows the facts:

a. That the plaintiff is the owner of the property claimed, particularly describing it, or is entitled to the
possession thereof;
b. That the property is wrongfully detained by the defendant,alleging the cause of detention thereof
according to his best knowledge, information and belief;
c. That it has not been taken for a tax assessment or fine pursuant to law, or seized under an execution,
or an attachment against the property of the plaintiff, or, if so seized, that it is exempt from such
seizure; and
d. The actual value of the property.
The plaintiff must also give a bond, executed to the defendant in double the value of the property as
stated in the affidavit aforementioned, for the return of the property to the defendant if the return
thereof be adjudged, and for the payment to the defendant of such sum as he may recover from the
plaintiff in the action.”

As will be noted, Cooney’s complaint incorporates the factual allegations necessary to bring
his cause within the operation of Rule 60 of the Rules of Court. In his complaint he asserts that he
is the owner of the “Creala 40” in virtue of a deed of sale executed in his favor on December 5, 1988
by Seacraft; that he was being deprived of possessionthereof by Tillson, who was acting in
conspiracy with the Sheriff and other persons; that as owner, he was entitled to a “preliminary
order for the immediate delivery” upon “a bond in a reasonable amount” and, “after trial of the
issues,” to have his ownership vindicated and recover damages from the defendants. Annexed to
his complaint were (1) his affidavit stating inter alia that “the boat would be probably valued
conservatively at P300,000.00” and “has not been taken for tax assessment or fine pursuant to law,
or seized under execution, or an attachment against the property of herein plaintiff,” and (2)
a bond in the amount of P800,000.00 entitled “ Plaintiffs’s Bond for Manual Delivery of Personal
Property (Replevin Bond).”

And that it was so understood by the Regional Trial Court can scarcely be doubted, too. In
her Order of April 17, 1989, Judge Jaguros directed the issuance of “the corresponding Writ of
Replevin of Personal Property.”Moreover, a writ denominated “writ of replevin” issued on the same
23

day, pursuant to which—and to another order dated April 20, 1989, supra—the sheriff took
possesion of the “Creala 40” on April 20, 1989. The case is not removed from the operation of Rule
Page
60 by the fact that after the property was taken from the defendant it was not turned over to the
plaintiff (Cooney) but to the Coast Guard, on instructions of the Trial Court. That circumstance is
totally inconsequential.

For one thing, it does not alter the reality of the defendant’s loss of possession; it is
unreasonable to approve of the taking of the boat from his possession pursuant to Rule 60, and
then deny him the remedies prescribed by that selfsame rule; and if the seizure was not effected
in accordance with Rule 60, then the seizure was unjustified.

For another, property seized under a writ of delivery or replevin is not supposed to be turned
over to the plaintiff until after the lapse of five (5) days, a proposition that is made plain by Section
6 of Rule 60:
“SEC. 6. Disposition of property by officer.—If within five (5) days after the taking of the property by the
officer, the defendant does not object to the sufficiency of the bond, or of the surety or sureties thereon, or
require the return of the property as provided in the last preceding section; or if the defendant so objects,
and the plaintiff’s first or new bond is approved; or if the defendant so requires, and his bond is objected to
and found insufficient and he does not forthwith file an approved bond, the property shall be delivered to
the plaintiff. If for any reason the property is not delivered to the plaintiff, the officer must return it to the
defendant.”

Hence, whether the property remained with the sheriff, or was given over to another officer
designated by the Court is of no significance, and certainly should not be taken as disabling the
defendant from moving for the return of the property to him by either of the modes set out in
Section 5 of Rule 60: (1) by objecting to the sufficiency of the plaintiff’s replevin bond, or (2) if he
does not so object, by filing a counter-bond “in double the value of the property as stated in the
plaintiff’s affidavit.”

There is, therefore, no reason whatsoever to refuse to apply Rule 60 to the case at bar.

The next issue is whether or not Tillson, as defendant in the replevin action, had properly
complied with the requisites of Rule 60 for the return to him of the seized vessel. The provision of
the Rules upon which the issue turns is Section 5, Rule 60. It reads as follows:
“SEC. 5. Return of property.—If the defendant objects to the sufficiency of the plaintiff’s bond, or of the
surety or sureties thereon, he cannot require the return of the property as in this section provided; but if
he does not so object, he may, at any time before the delivery of the property to the plaintiff, require the
return thereof, by filing with the clerk or judge of the court a bond executed to the plaintiff, in double the
value of the property as stated in the plaintiff’s affidavit, for the delivery of the property to the plaintiff, if
such delivery be adjudged, and for the payment of such sum to him as may be recovered against the
defendant, and by serving a copy of such bond on the plaintiff or his attorney.”

Now, it is plain from the record that Tillson’s counsel had presented an “Appearance and
Urgent Ex-Parte Motion” on April 21, 1989 announcing that he would “file the necessary counter
Bond, in accordance with Section 5 of Rule 60 of the Rules of Court,” and that on April 25, 1989, he
did post a bond in the amount of P800,000.00 for that very purpose, that amount being more than
double the value of the boat stated by Cooney, P300,000.00. The original of the bond was attached
to an “Urgent Motion for Approval of Bond and Surrender of the Creala 40” filed on April 25, 1989
by Tillson’s attorney. Copies of the urgent motion and of the bond itself were sent by registered
mail to Cooney’s counsel on the same day, and were subsequently received by the latter in due
10

course. The urgent motion was set for hearing on May 2, 1989, but on that day, the Court reset
11

the hearing to May 5, 1989 to give Cooney’s attorney an opportunity to be heard. At the hearing
on May 5, 1989, among other things, the registry return card evidencing receipt of the urgent
motion and bond was shown to the Court, but as above already stated, the Trial Court
12

nevertheless refused to order the return of the boat to Tillson, which action the Court of Appeals
later upheld.

Upon these facts, the Court rules that Tillson had substantially complied with the
requirements of Section 5, Rule 60 for the return to him of the vessel in question.
24
Page
 The amount of the bond, P800,000.00, was adequate. It was more than double the sum of
P300,000.00, which was the value stated by Cooney in the affidavit attached to his complaint in
support of his application for the provisional remedy of writ of delivery or replevin, supra.

The counter-bond was posted within the period prescribed by Rule 60, i.e., “within five (5)
days after the taking of the property by the officer,” and “before the delivery of the property to the
13

plaintiff.”
14

A copy of the counter-bond was sent to the plaintiff (Cooney) on the fifth day “after the
taking of the property by the officer.” The copy having been sent by registered mail, it was received
after said fifth day. Cooney does not deny that the copy of the bond was indeed sent to him on the
fifth day, and that he actually received it afterwards; and it is a fact that on the day on which the
Trial Court re-scheduled the hearing on the motion for approval of the bond and for return of the
property, May 5, 1989, Cooney had already received the copy of the bond. What he postulates is
that his receipt of the counter-bond after the fifth day, was a fatal defect proscribing return of the
vessel to Tillson, a proposition which the Court of Appeals sustained. The proposition is
unacceptable to the Court. It accords unwarranted importance to technicality. If technicality were
indeed to be the order of the day, Tillson could also claim timeliness of Cooney’s receipt of a copy
of the bond since, as the record shows, Cooney did receive the copy within the time stated by
Section 5 of Rule 60, i.e,. “before the delivery of the property to the plaintiff.” He could also claim
that the requirement of service of the counter-bond on the plaintiff cannot be all that important
since there is no provision in Rule 60 imposing that requirement, which appears to have been
derived simply from the general prerequisite laid down for pleadings, motions, notices, orders and
other papers filed with the court. 15

In Case and Nantz v. Jugo, et al., a 1946 case, where a copy of the counter-bond was never
16

given the plaintiff although it had been seen and read by the latter’s attorney, this Court held that
there had been substantial compliance with the requirement of service of the defendant’s counter-
bond. “Since the sole purpose of furnishing a copy of the counter-bond,” said the Court, “is to enable
the plaintiff to see if the bond is in the prescribed form and for the right amount and to resist the
return of the property to the defendant if it is not, that opportunity was afforded the petitioners to
the fullest extent when their attorney was shown in the sheriff’s office the defendant’s counter-
bond. After the plaintiff’s attorney read or saw the counter-bond, service of a copy thereof on him
became purposeless, unnecessary formality. There is no reason why the maxim, ‘equity regards
substance rather than form,’ should not hold good here.”

Considering the established facts, and the additional circumstance that the record shows no
prejudice whatever to have been caused to plaintiff Cooney by the omission of service of the
counter-bond on him, there is no reason why the same disposition should not be made here as
in Case,and substance rather than form be made to prevail.

One last word, concerning the third-party claim filed by Seacraft over the “Creala 36” and
“Creala 40.” These two boats, it will be recalled, constituted the res in Civil Case No. 54578 and
had been levied on in execution of the default judgment in said case against Seacraft’s co-
defendant, Leonard La Pierre. Seacraft filed its claim supposedly in accordance with Section 17,
Rule 39, viz.:
“SEC. 17. Proceedings where property claimed by third person.—If property levied on be claimed by any
other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto
or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the
officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to
keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the
officer against such claim by a bond in a sum not greater than the value of the property levied on. In case
of disagreement as to such value, the same shall be determined by the court issuing the writ of execution.

The officer is not liable for damages, for the taking or keeping of the property, to any third-party
claimant unless a claim is made by the latter and unless an action for damages is brought by him against
the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein
contained shall prevent such claimant or any third person from vindicating his claim to the property by any
25

proper action. x x x x x.”

Page
 It should be apparent that this provision, and others like it, providing for an expeditious
17

mode of recovering property alleged to have been wrongfully or erroneously taken by a sheriff
pursuant to a writ of execution or other process, has reference to a stranger to the action, and not
to a party therein. The remedy thereby granted is meant to accord said stranger, whose property
is taken by the sheriff to secure or satisfy a judgment against a party to said action, a speedy,
simple, and expeditious method of getting it back. All he has to do is draw up “an affidavit of his
title thereto or right to the possession thereof, stating the grounds of such right or title, and serve
the same upon the officer making the levy, and a copy thereof upon the judgment creditor.”

If the sheriff is persuaded of the validity of the third party’s claim, then he gives back the
property. The purpose of the provision is achieved. On the other hand, if the sheriff is not convinced
and opts to retain the property (requiring the judgment creditor to post an indemnity bond to
answer for any liability he may incur by reason of such retention), the third party may then
vindicate “his claim to the property by any proper action.”

A party to the action, however, has no business filing a third party claim over property
involved in that action and which he himself claims to belong to him. He is evidently not the
stranger, or third party, contemplated by the aforementioned Section 17, Rule 39. He has the
standing, and the opportunity at any time, to ask the Court for relief against any alleged errors,
excesses or irregularities of the sheriff. It is incongruous to seek relief from a sheriff which the
Court itself could as easily and expeditiously grant.

WHEREFORE, the Decision of the Court of Appeals promulgated in CA-G.R. SP No. 17586
on September 1, 1989 is REVERSED and SET ASIDE, and another rendered ANNULLING AND
SETTING ASIDE the Order of the Trial Court of May 15, 1989 in Civil Case No. 89-48520 and
COMMANDING the Sheriff of Manila, the Coast Guard and/or their deputies and representatives
immediately to deliver possession of the Creala 40 (Hull No. 4001, LPY-G-5-86) to the petitioner,
with costs against respondent John M. Cooney.

SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ.,concur. decision reversed and set aside.

Note.—Return by mortgage creditor of property seized on replevin does not make moot and
academic the action for judicial foreclosure where the return was expressly made to be “without
prejudice.” (Makati Leasing and Finance Corp. vs. Wearever Textile Mills, Inc., 122 SCRA 296.)

26
Page
 G.R. No. 147977. March 26, 2008.*
ANNIE FERMIN, a.k.a. ANITA SAGACO, and AURELIO “LEO” KIGIS, petitioners, vs. HON.
ANTONIO M. ESTEVES, in his capacity as Presiding Judge of Branch 5, Regional Trial Court,
Baguio City, and MARIANO TANENGLIAN, respondents.

Actions; Judgments; Parties; Writs of Execution; Due Process; Execution of a judgment can only
be issued against one who is a party to the action, and not against one who, not being a party in the
case, did not have his day in court.—The generally accepted principle is that no man shall be
affected by any proceeding to which he is a stranger, and strangers to a case are not bound by a
judgment rendered by the court. Execution of a judgment can only be issued against one who is a
party to the action, and not against one who, not being a party in the case, did not have his day in
court. Due process requires that a court decision can only bind a party to the litigation and not
against one who did not have his day in court.

Remedial Law; The remedy of terceria is available to a third person other than the judgment
obligor or his agent who claims a property levied on.—The remedy of terceria is available to a third
person other than the judgment obligor or his agent who claims a property levied on. In this case,
the property was not levied on and put on auction. The implementation of the Special Order of
Demolition would result in the destruction of petitioners’ property. Further, terceria is not a
speedy and adequate remedy insofar as petitioners are concerned considering that the Special
Order of Demolition ordered the Deputy Sheriff to cause the demolition of all the improvements
immediately after the expiration of the 15-day period granted upon the defendants, their agents,
assigns, representatives, or successors-in-interest to remove their improvements on the premises.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
CARPIO, J.:

The Case

Before the Court is a petition for review1 with prayer for a writ of preliminary injunction or
the issuance of a temporary restraining order, assailing the 28 April 2000 Decision 2 and 24 April
2001 Resolution3 of the Court of Appeals in CA-G.R. SP No. 48373.

The Antecedent Facts

On 15 October 1986, Mariano Tanenglian (respondent) filed an action for quieting of title
and damages against Anselmo Arizo, Fred Balusdan, Gregorio Carreon, Teodita Ceril, Corazon
Dapnisan, Mario Dapnisan, Rogel Estrada, Aida Fermin, Marilou Fernandez, Michael Fernandez,
Teofilo Fulmana, Andrew Herrero, Simeon Jastan, Rogelio (Rodolfo) Lachica, Naty Lachica,
Manuel Lagartera, Juliano Landisen, Maximino Lapid, Silvestre Lorenzo, Timoteo Lubusan
(Dapnisan), Helen Matale, Soledad Nabunat, Damian Peñera, Eliseo Pidazo, Pablito Sacpa,
Ananao Santos, Esteban Santos, Juanito Santos, and Samson Santos (Arizo, et al.). The case was
docketed as Civil Case No. 925-R.

In a Decision4 dated 28 June 1991, the Regional Trial Court of Baguio City, Branch 5 (trial
court) ruled:
“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the
defendants as follows:
a) Ordering the defendants to respect and recognize plaintiff’s ownership of the two (2)
parcels of land in question;
b) Ordering the defendants to remove their houses/
structures/constructions/improvements from the subject parcels of land and surrender
the possession of the premises they are respectively occupying to the plaintiff; and
c) Ordering the defendants to pay, jointly and severally, the plaintiff the amount of
P10,000.00 for and as attorney’s fees plus the costs of the suit.
SO ORDERED.”5
27

On appeal, the Court of Appeals affirmed the trial court’s ruling in its Decision dated 18
February 1994. Arizo, et al. filed a petition for review before this Court, but it was denied in a
Page

Resolution dated 2 August 1995. This Court denied Arizo, et al.’s first and second motions for
reconsideration in its Resolutions dated 15 January 1996 and 4 March 1996, respectively. An Entry
of Judgment was issued on 8 April 1996.

On 16 December 1996, the trial court granted respondent’s motion for execution. In a Special
Order of Demolition6 dated 30 April 1998, the trial court ordered:
“WHEREFORE, Defendants, their agents, assigns, representatives and/or successors-in-
interest are hereby given a period of fifteen (15) days from notice within which to remove their
improvements from the premises subject of this case.
The Deputy Sheriff assigned to this Court is likewise hereby ordered to cause the demolition of all
improvements which he may find within the premises immediately after the expiration of the
abovesaid period with the survey report of the committee to be made as a parameter in compliance
with this Order; and to simultaneously place Plaintiff in possession thereof.
Expenses of the demolition shall be borne by the Plaintiff.
SO ORDERED.”7

The trial court issued an Alias Writ of Execution8 on even date.

Annie Fermin, a.k.a. Anita Sagaco, and Aurelio “Leo” Kigis (petitioners) filed a petition for
certiorari and prohibition with prayer for the issuance of a temporary restraining order and a writ
of preliminary injunction before the Court of Appeals. They alleged that the deputy sheriff was
poised to implement the Special Order of Demolition not only against Arizo, et al. but also against
them. Petitioners alleged that they were deprived of their right to due process because they were
never made defendants in Civil Case No. 925-R. Petitioners alleged that they entered into the
possession and occupancy of the lands as members of an indigenous cultural community in the
honest perception and belief that the lands formed part of their ancestral lands. Petitioners further
alleged that their occupancy of the lands was not pursuant to any agreement entered into with
anyone of the defendants in Civil Case No. 925-R or any of the defendants’ predecessors-in-
interest. Further, they alleged that it was not even established that their residential structures
were within the area subject of Civil Case No. 925-R.

The Ruling of the Court of Appeals

In its 28 April 2000 Decision, the Court of Appeals denied the petition and affirmed the
Special Order of Demolition.

The Court of Appeals ruled that respondent’s right to the subject parcels of land had already
been settled with finality.

The Court of Appeals ruled that had petitioners been in good faith regarding their
possession of the land, they could have intervened in Civil Case No. 925-R under Rule 19 of the
1997 Rules of Civil Procedure. The Court of Appeals further ruled that had petitioners been really
unaware of the proceedings or aggrieved because of the damage posed by the Special Order of
Demolition, they could just have apprised the trial court of their adverse claim and move for the
issuance of the necessary terceria under Section 43, Rule 39 of the 1997 Rules of Civil Procedure.
The Court of Appeals ruled that since petitioners failed to avail of these remedies or any other
possible remedies in law, they could no longer prevent respondent’s exercise of his rights of
ownership by belatedly complaining about their supposed property rights.

Petitioners filed a motion for reconsideration.

In its 24 April 2001 Resolution, the Court of Appeals denied the motion.

Hence, the petition before this Court.

The Issue

The issue in this case is whether the Special Order of Demolition may be enforced against
petitioners who were not party-defendants in Civil Case No. 925-R.
28
Page
 The Ruling of this Court

The petition has merit.

The generally accepted principle is that no man shall be affected by any proceeding to which
he is a stranger, and strangers to a case are not bound by a judgment rendered by the
court.9 Execution of a judgment can only be issued against one who is a party to the action, and
not against one who, not being a party in the case, did not have his day in court. 10Due process
requires that a court decision can only bind a party to the litigation and not against one who did
not have his day in court.11

In this case, petitioners were not parties in Civil Case No. 925-R. Petitioners’ allegation that
their possession did not arise from an agreement with the defendants or the predecessors-in-
interest of the defendants in Civil Case No. 925-R remains unrebutted by respondent. The Special
Order of Demolition only binds the defendants in Civil Case No. 925-R as well as their agents,
assigns, representatives, or successors-in-interest. In the absence of proof that petitioners are
agents, assigns, representatives, or successors-in-interest of the defendants in Civil Case No. 925-
R, the Special Order of Demolition may not be enforced against them.

The Court of Appeals ruled that petitioners could have intervened in Civil Case No. 925-R.
Yet, there was no evidence that petitioners were aware of the pendency of Civil Case No. 925-R.
We cannot accept respondent’s assertion that the pendency of Civil Case No. 925-R could not have
escaped petitioners’ notice because it was frequently talked about in the community.

The Court of Appeals also ruled that petitioners could have availed themselves of the
remedy under Section 43, Rule 39 of the 1997 Rules of Civil Procedure, thus:
“Sec. 43. Proceedings when indebtedness denied or another person claims the property.—If it
appears that a person or corporation, alleged to have property of the judgment obligor or to be
indebted to him, claims an interest in the property adverse to him or denies the debt, the court
may authorize, by an order made to that effect, the judgment obligee to institute an action against
such person or corporation for the recovery of such interest or debt, forbid a transfer or other
disposition of such interest or debt within one hundred twenty (120) days from notice of the order,
and may punish disobedience of such order as for contempt. Such order may be modified or vacated
at any time by the court which issued it, or by the court in which the action is brought, upon such
terms as may be just.”

In this case, Arizo, et al. are not judgment obligors as contemplated in Section 43, Rule 39
of the 1997 Rules of Civil Procedure. Neither are petitioners indebted to Arizo, et al. It was not
even established that petitioners are in possession of the property of Arizo, et al. In fact, petitioners
alleged that it was not established that their residential structures are within the area subject of
Civil Case No. 925-R. In other words, Section 43, Rule 39 of the 1997 Rules of Civil Procedure,
which would allow the judgment obligee to recover indebtedness due to the judgment obligor, does
not apply in this case.

When the Court of Appeals referred to the remedy of terceria, it must be referring to Section
16, Rule 39, not Section 43, Rule 39 of the 1997 Rules of Civil Procedure,12which provides:
“Sec. 16. Proceedings where property claimed by third person.—If the property levied on is
claimed by any person other than the judgment obligor or his agent, and such person makes an
affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or
title, and serves the same upon the officer making the levy and a copy thereof upon the judgment
obligee, the officer shall not be bound to keep the property, unless such judgment obligee, on
demand of the officer, files a bond approved by the court to indemnify the third-party claimant in
a sum not less than the value of the property levied on. In case of disagreement as to such value,
the same shall be determined by the court issuing the writ of execution. No claim for damages for
the taking or keeping of the property may be enforced against the bond unless the action therefor
is filed within one hundred twenty (120) days from the date of the filing of the bond.

The officer shall not be liable for damages for the taking or keeping of the property, to any
29

third-party claimant if such bond is filed. Nothing herein contained shall prevent such claimant
Page

or any third person from vindicating his claim to the property in a separate action, or prevent the
judgment obligee from claiming damages in the same or separate action against a third-party
claimant who filed a frivolous or plainly spurious claim.
x x x x”

The remedy of terceria is available to a third person other than the judgment obligor or his
agent who claims a property levied on. In this case, the property was not levied on and put on
auction. The implementation of the Special Order of Demolition would result in the destruction of
petitioners’ property. Further, terceria is not a speedy and adequate remedy insofar as petitioners
are concerned considering that the Special Order of Demolition ordered the Deputy Sheriff to cause
the demolition of all the improvements immediately after the expiration of the 15-day period
granted upon the defendants, their agents, assigns, representatives, or successors-in-
interest to remove their improvements on the premises.

The Court recognizes the finality of the trial court’s Decision in Civil Case No. 925-R.
However, petitioners are contesting whether their residential structures are within the area
subject of Civil Case No. 925-R. Since petitioners are not parties to Civil Case No. 925-R,
respondent has to file the proper action against petitioners to enforce his property rights within
the bounds of the law and our rules.13 Petitioners’ right to possession, if any, should be threshed
out in a proper court proceeding.

WHEREFORE, we SET ASIDE the 28 April 2000 Decision and 24 April 2001 Resolution of
the Court of Appeals in CA-G.R. SP No. 48373. We make permanent the temporary restraining
order issued by this Court on 25 June 2001 enjoining the enforcement of the Special Order of
Demolition dated 30 April 1998 against petitioners.
SO ORDERED.

Notes.—The availment of the remedy of terceria is not a condition sine qua non to the filing of
the “proper action”—an independent action may be resorted to even before or without need of filing
a claim in the court which issued the writ. (Naguit vs. Court of Appeals, 347 SCRA 60 [2000])
The moment a third party claim is filed, the sheriff is not bound to keep the property levied
upon, unless the creditor insists that it should be continued, which may be done if such creditor
files a bond sufficient to indemnify the sheriff for whatever damages he may be held liable should
the third party succeed in vindicating his title in a proper action brought separately for the
purpose, without prejudice to “any proper action” that a third-party claimant may be deemed
suitable to vindicate his claim to the property. (QBE Insurance [Phils.], Inc. vs. Rabello, Jr., 445
SCRA 554 [2004])

30
Page
 RULE 39
G.R. No. 184252. September 11, 2009.*
CHINA BANKING CORPORATION, petitioner, vs. SPS. WENCESLAO & MARCELINA
MARTIR, respondents.
Mortgages; Foreclosure of Mortgage; Publication Requirement; The Court takes judicial notice of the
fact that newspaper publications have more far-reaching effects than posting on bulletin boards in public
places—hence, the publication of the notice of sale in the newspaper of general circulation alone is more than
sufficient compliance with the notice-posting requirement of the law.—The requirements for posting and
publication in extrajudicial foreclosure are set out in Act No. 3135, as amended: Sec. 3.—Notice shall be
given by posting notices of the sale for not less than twenty days in at least three public places of the
municipality or city where the property is situated, and if such property is worth more than four hundred
pesos, such notice shall also be published once a week for at least three consecutive weeks in a newspaper
of general circulation in the municipality or city. Jurisprudence, however, has decreed that the publication
of the notice of sale in a newspaper of general circulation alone is more than sufficient compliance with the
notice-posting requirements of the law. The Court has elucidated that: We take judicial notice of the fact
that newspaper publications have more far-reaching effects than posting on bulletin boards in public places.
There is a greater probability that an announcement or notice published in a newspaper of general
circulation, which is distributed nationwide, shall have a readership of more people than that posted in a
public bulletin board, no matter how strategic its location may be, which caters only to a limited few. Hence,
the publication of the notice of sale in the newspaper of general circulation alone is more than sufficient
compliance with the notice-posting requirement of the law. By such publication, a reasonably wide publicity
had been effected such that those interested might attend the public sale, and the purpose of the law had
been thereby subserved. The object of a notice of sale is to inform the public of the nature and condition of
the property to be sold, and of the time, place and terms of the sale. Notices are given for the purpose of
securing bidders and to prevent a sacrifice of the property. If these objects are attained, immaterial errors
and mistakes will not affect the sufficiency of the notice; but if mistakes or omissions occur in the notices
of sale, which are calculated to deter or mislead bidders, to depreciate the value of the property, or to prevent
it from bringing a fair price, such mistakes or omissions will be fatal to the validity of the notice, and also
to the sale made pursuant thereto.

Same; Same; Same; Guidelines in the Accreditation of Newspapers and Periodicals Seeking to Publish
Judicial and Legal Notices and Other Similar Announcements and in the Raffle Thereof (A.M. No. 01-1-07-
SC); Words and Phrases; A newspaper of general circulation is published for the dissemination of local news
and general information, has a bona fide subscription list of paying subscribers, and published at regular
intervals; Presidential Decree 1079 does not require accreditation—the requirement of accreditation was
imposed by the Court only in 2001, through A.M. No. 01-1-07-SC, which circular cannot be applied
retroactively to the case at bar as it will impair petitioner’s rights.—Presidential Decree 1079 requires a
newspaper of general circulation. A newspaper of general circulation is published for the dissemination of
local news and general information; it has a bona fide subscription list of paying subscribers; and it is
published at regular intervals. The newspaper must not also be devoted to the interest or published for the
entertainment of a particular class, profession, trade, calling, race or religious denomination. The
newspaper need not have the largest circulation so long as it is of general circulation. Presidential Decree
1079, however, does not require accreditation. The requirement of accreditation was imposed by the Court
only in 2001, through A.M. No. 01-1-07-SC or the Guidelines in the Accreditation of Newspapers and
Periodicals Seeking to Publish Judicial and Legal Notices and Other Similar Announcements and in the
Raffle Thereof. This circular cannot be applied retroactively to the case at bar as it will impair petitioner’s
rights.

Same; Same; Same; The Affidavit of Publication executed by the account executive of the newspaper in
the place where the properties are located stating that said newspaper is of general circulation and is
published in the said locality is prima facie proof that the newspaper is generally circulated in said place.—
In the instant case, the Affidavit of Publication executed by the account executive of Sun Star General
Santos expressly provided that the said newspaper is of general circulation and is published in the City of
General Santos. This is prima facie proof that Sun Star General Santos is generally circulated in General
Santos City, the place where the properties are located. Notably, respondents did not claim that the subject
newspaper was not generally circulated in the city, but only that it was not accredited by the court. Hence,
there was valid publication and consequently, the extrajudicial foreclosure and sale are valid.

Same; Same; Redemption; Words and Phrases; The general rule in redemption is that it is not sufficient
that a person offering to redeem manifests his desire to do so—the statement of intention must be
accompanied by an actual and simultaneous tender of payment; Jurisprudence also characterizes a valid
tender of payment as one where the full redemption price is tendered.—The general rule in redemption is
that it is not sufficient that a person offering to redeem manifests his desire to do so. The statement of
31

intention must be accompanied by an actual and simultaneous tender of payment. This constitutes the
Page

exercise of the right to repurchase. In several cases decided by the Court where the right to repurchase was
held to have been properly exercised, there was an unequivocal tender of payment for the full amount of
the repurchase price. Otherwise, the offer to redeem is ineffectual. Bona fide redemption necessarily
implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the redemption
period fixed by law can easily be circumvented. Moreover, jurisprudence also characterizes a valid tender
of payment as one where the full redemption price is tendered.

Same; Same; Same; The mortgagors’ repeated requests for information as regards the amount of loan
availed from the credit line and the amount of redemption, and the mortgagee’s failure to accede to said
requests do not invalidate the foreclosure; Redemption within the period allowed by law is not a matter of
intent but a question of payment or valid tender of the full redemption price within said period.—
Respondents’ repeated requests for information as regards the amount of loan availed from the credit line
and the amount of redemption, and petitioner’s failure to accede to said requests do not invalidate the
foreclosure. Respondents can find other ways to know the redemption price. For one, they can examine the
Certificate of Sale registered with the Register of Deeds to verify the purchase price, or upon the filing of
their complaint, they could have moved for a computation of the redemption price and consigned the same
to the court. At any rate, whether or not respondents were diligent in asserting their willingness to pay is
irrelevant. Redemption within the period allowed by law is not a matter of intent but a question of payment
or valid tender of the full redemption price within said period.

Same; Same; Same; The institution of an action to annul a foreclosure sale does not suspend the running
of the redemption period.—Even the complaint instituted by respondents cannot aid their plight because
the institution of an action to annul a foreclosure sale does not suspend the running of the redemption
period. Moreover, the period within which to redeem the property sold at a sheriff’s sale is not suspended
by the institution of an action to annul the foreclosure sale. It is clear, then, that petitioners have lost any
right or interest over the subject property primarily because of their failure to redeem the same in the
manner and within the period prescribed by law. Their belated attempts to question the legality and
validity of the foreclosure proceedings and public auction must accordingly fail.

Same; Same; Same; Fixing a definite term within which the property should be redeemed is meant to
avoid prolonged economic uncertainty over the ownership of the thing sold.—The law allows respondents
the right to redeem their foreclosed properties. But in so granting that right, the law intended that their
offer to redeem be valid and effective, accompanied by an actual tender of the redemption price. Fixing a
definite term within which the property should be redeemed is meant to avoid prolonged economic
uncertainty over the ownership of the thing sold.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

YNARES-SANTIAGO, J.:

Assailed is the November 28, 2007 Decision1 of the Court of Appeals in CA-G.R. CV No.
00477 which reversed the April 27, 2004 Decision2 of the Regional Trial Court of General Santos
City, Branch 23; invalidated the foreclosure; and ordered the cancellation of the Certificate of Sale
in favor of petitioner, China Banking Corporation. Also assailed is the August 6, 2008
Resolution3 which denied the motion for reconsideration.

In 1994, respondents, spouses Wenceslao and Marcelina Martir, executed real estate
mortgages in favor of petitioner China Banking Corporation over three parcels of land described
under TCT No. 50485, OCT No. (P-29452) (P-11287) P-1897, and OCT No. P-2754, as security for
their credit line in the amount of P1,800,000.00.4 The loan was released in tranches, and for every
amount released, respondents executed the corresponding promissory note.

On September 12, 1997, respondents failed to pay the monthly interests on the promissory
notes, thus a demand letter dated October 8, 19975 was sent reminding them of their obligation.
Respondents still failed to pay; hence, the promissory notes and the credit line were no longer
renewed by petitioner. A final demand letter dated December 29, 1997 6 was sent through
registered mail to respondents by petitioner’s counsel. At that time, respondents’ total obligation
amounted to P1,705,000.00.

On May 20, 1998, upon the application of petitioner, the properties subject of the real estate
mortgages were extrajudicially foreclosed and sold at public auction for P2,400,000.00 with
32

petitioner as the sole bidder. A Certificate of Sale7 was issued in favor of petitioner on May 21,
Page

1998, and registered with the Register of Deeds on June 6, 1998.

 From March to May 1999, respondents sent series of letters8 to petitioner inquiring the
amount of loan availed from the credit line, as well as the amount needed to redeem the foreclosed
properties. Petitioner, however, failed to respond to the inquiry. In a letter dated May 11,
1999,9 respondents formally offered to pay the amount of P1,300,000.00 to petitioner. Said amount
was based on petitioner’s letter dated October 8, 1997 stating that the principal obligation amounts
to P1,300,000.00.

On May 17, 1999, respondents filed a complaint for nullification of the foreclosure
proceedings10 alleging non-compliance with the jurisdictional requirements of publication, posting,
registration, payment of filing fees and sheriff fees, and failure to report the extrajudicial
foreclosure proceedings and sale to the Executive Judge. Respondents also imputed bad faith on
the part of petitioner, which allegedly prevented them from redeeming their properties.

In a Decision dated April 27, 2004, the Regional Trial Court upheld the validity of the
foreclosure proceedings, but stated that respondents’ failure to redeem the properties was caused
by petitioner. Hence, the trial court granted respondents the alternative remedy of redeeming the
properties. The dispositive portion of the Decision reads:11
“WHEREFORE, considering that the case was filed in 1999, while the requirement for the payment of
docket fees, as well as the registration fees required on the petition for foreclosure of mortgage per the
Supreme Court Administrative Matter 99-10-05 regarding such procedure in extrajudicial foreclosure of
mortgage took effect only on January 15, 2000, the foreclosure could not be invalidated even if there was
non-compliance with the Court Administrative Matter 99-10-05. However, the expiration of the period to
redeem being without the plaintiff having been able to do so, was caused by the defendant bank; therefore,
the plaintiff is hereby granted the alternative remedy of redeeming the properties, in accordance with law
and with the mortgage contract entered into by the parties.
SO ORDERED.”

On appeal, the Court of Appeals reversed the decision of the trial court. It invalidated the
foreclosure and ordered the cancellation of the registration of the Certificate of Sale in favor of
petitioner. It also ordered respondents to pay petitioner their loans with interest, without prejudice
to the right of petitioner to foreclose the real estate mortgage upon respondents’ failure to pay their
obligations. The dispositive portion of the November 28, 2007 Decision reads:12
“WHEREFORE, the appealed Decision of the Regional Trial Court of General Santos City, Branch 23 is
REVERSED. The Register of Deeds of General Santos City is hereby ORDERED to cancel the registration
of Certificate of Sale in favor of appellee Bank. Likewise, the appellants are ORDERED to pay the appellee
Bank their loans with interest as stipulated in the contract of loan, without prejudice to the right of the
appellee Bank to foreclose the real estate mortgage upon the appellants’ failure to pay their obligations.
SO ORDERED.”

Petitioner moved for reconsideration but was denied. Hence, the instant petition raising the
following issues:13
I.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT THE
EXTRAJUDICIAL FORECLOSURE SALE WAS VOID BASED ON THE GROUND THAT THE
NEWSPAPER WHERE THE NOTICE OF AUCTION SALE WAS PUBLISHED WAS NOT AN
“ACCREDITED NEWSPAPER,” WHICH CONTENTION IS NOT A REQUIREMENT UNDER EXISTING
LAWS AND JURISPRUDENCE.
II.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ITS RULING WHEN IT FAILED TO
APPRECIATE THE FACT THAT THERE WAS SUBSTANTIAL COMPLIANCE IN BOTH THE POSTING
OF THE NOTICE OF EXTRAJUDICIAL FORECLOSURE SALE AS WELL AS THE PUBLICATION OF
THE SAME IN A NEWSPAPER OF GENERAL CIRCULATION BY THE FORECLOSING NOTARY
PUBLIC.
The petition is meritorious.

In invalidating the extrajudicial foreclosure and sale, the appellate court found that the
posting and publication requirements were not met, thus:
“In this case, the appellee Bank failed to comply with both the requirements of posting and publication.
The notice of extrajudicial foreclosure and sale was posted in the barangay hall and Hall of Justice of
33

General Santos City for only fourteen (14) days, i.e. from May 6 to May 20, 1998 in violation of the mandated
twenty (20) day period. Likewise, the publication in SUN STAR, a local newspaper, was not valid on the
Page

ground that said newspaper is not an accredited newspaper of general circulation in General Santos City
pursuant to P.D. No. 1079. This is confirmed by the Certification of Mr. Elmer D. Lastimosa, Clerk of Court
VI, Office of the Clerk of Court of the Regional Trial Court, General Santos City, dated January 12, 1999
which states that:
xxxx
THIS IS TO CERTIFY that SUN-STAR, General Santos published by Ang Peryodiko Dabaw, Inc. with
editorial and business address at Halieus Mall, Pendatun Avenue, corner Lukban Street, General Santos
City is not an accredited local newspaper insofar as this Court is concerned and therefore not
qualified to publish judicial notices, court orders and summonses and all similar announcement
arising from court litigation required by law to be published, as provided in Section 1 of P.D.
No. 1079.
xxxx
THIS IS TO FURTHER CERTIFY that SUN-STAR General Santos has filed a “Petition for
Accreditation” docketed as Miscellaneous Case No. 1797 now pending consideration before the sala of
Honorable Executive Judge Antonio S. Alano.”14

The requirements for posting and publication in extrajudicial foreclosure are set out in Act
No. 3135, as amended:
“Sec. 3. Notice shall be given by posting notices of the sale for not less than twenty days in at least
three public places of the municipality or city where the property is situated, and if such property is worth
more than four hundred pesos, such notice shall also be published once a week for at least three consecutive
weeks in a newspaper of general circulation in the municipality or city.”
Jurisprudence, however, has decreed that the publication of the notice of sale in a newspaper
of general circulation alone is more than sufficient compliance with the notice-posting
requirements of the law.15 The Court has elucidated that:
“We take judicial notice of the fact that newspaper publications have more far-reaching effects than
posting on bulletin boards in public places. There is a greater probability that an announcement or notice
published in a newspaper of general circulation, which is distributed nationwide, shall have a readership
of more people than that posted in a public bulletin board, no matter how strategic its location may be,
which caters only to a limited few. Hence, the publication of the notice of sale in the newspaper of general
circulation alone is more than sufficient compliance with the notice-posting requirement of the law. By such
publication, a reasonably wide publicity had been effected such that those interested might attend the
public sale, and the purpose of the law had been thereby subserved.
The object of a notice of sale is to inform the public of the nature and condition of the property to be sold,
and of the time, place and terms of the sale. Notices are given for the purpose of securing bidders and to
prevent a sacrifice of the property. If these objects are attained, immaterial errors and mistakes will not
affect the sufficiency of the notice; but if mistakes or omissions occur in the notices of sale, which are
calculated to deter or mislead bidders, to depreciate the value of the property, or to prevent it from bringing
a fair price, such mistakes or omissions will be fatal to the validity of the notice, and also to the sale made
pursuant thereto.”16

The focal issue, then, is whether the requirement of publication was complied with.

Presidential Decree 1079, the governing law at the time of the subject foreclosure, requires
that notices shall be published in newspapers or publications published, edited and circulated in
the same city and/or province where the requirement of general circulation applies, thus:
“Section 1. All notices of auction sales in extrajudicial foreclosure of real estate mortgage under Act
No. 3135 as amended, judicial notices such as notices of sale on execution of real properties, notices in
special proceedings, court orders and summonses and all similar announcements arising from court
litigation required by law to be published in a newspaper or periodical of general circulation in particular
provinces and/or cities shall be published in newspapers or publications published, edited and circulated in
the same city and/or province where the requirement of general circulation applies; Provided, That the
province or city where the publication’s principal office is located shall be considered the place where it is
edited and published: Provided, further, That in the event there is no newspaper or periodical published in
the locality, the same may be published in the newspaper or periodical published, edited and circulated in
the nearest city or province: Provided, finally, That no newspaper or periodical which has not been
authorized by law to publish and which has not been regularly published for at least one year before the
date of publication of the notices or announcements which may be assigned to it shall be qualified to publish
the said notices.”

Presidential Decree 1079 requires a newspaper of general circulation. A newspaper of

general circulation is published for the dissemination of local news and general information; it has
34

a bona fide subscription list of paying subscribers; and it is published at regular intervals. The
Page

newspaper must not also be devoted to the interest or published for the entertainment of a
particular class, profession, trade, calling, race or religious denomination. The newspaper need not
have the largest circulation so long as it is of general circulation.17

Presidential Decree 1079, however, does not require accreditation. The requirement of
accreditation was imposed by the Court only in 2001, through A.M. No. 01-1-07-SC or
the Guidelines in the Accreditation of Newspapers and Periodicals Seeking to Publish Judicial and
Legal Notices and Other Similar Announcements and in the Raffle Thereof. This circular cannot
be applied retroactively to the case at bar as it will impair petitioner’s rights.

Moreover, as held in Metropolitan Bank and Trust Company, Inc. v. Peñafiel,18 the
accreditation by the presiding judge is not conclusive that a newspaper is of general circulation,
as each case must be decided on its own merits and evidence.

“The accreditation of Maharlika Pilipinas by the Presiding Judge of the RTC is not decisive of
whether it is a newspaper of general circulation in Mandaluyong City. This Court is not bound to adopt the
Presiding Judge’s determination, in connection with the said accreditation, that Maharlika Pilipinas is a
newspaper of general circulation. The court before which a case is pending is bound to make a resolution of
the issues based on the evidence on record.”19

In the instant case, the Affidavit of Publication executed by the account executive of Sun
Star General Santos expressly provided that the said newspaper is of general circulation and is
published in the City of General Santos.20This is prima facie proof that Sun Star General Santos
is generally circulated in General Santos City, the place where the properties are located. Notably,
respondents did not claim that the subject newspaper was not generally circulated in the city, but
only that it was not accredited by the court. Hence, there was valid publication and consequently,
the extrajudicial foreclosure and sale are valid.

We now come to the question of whether respondents can redeem their properties on the
basis of the alleged bad faith of petitioner.
The Court rules in the negative.

In effecting redemption, the mortgagor has the duty of tendering payment before the
redemption period expires. While the complaint alleged that respondents made an offer to redeem
the subject properties within the period of redemption, it did not allege that there was an actual
tender of payment of the redemption price as required by the rules.21 The letter dated May 11, 1999
is only a formal offer to redeem, unaccompanied by an actual tender of the redemption price. The
said letter reads:22

May 11, 1999

Aparente-Salvani St.,
Dadiangas Heights
General Santos City
THE CHINA BANKING CORPORATION
General Santos City
Sir:
This is with reference to my letter dated May 4, 1999 which remained unanswered up to the present.
I have been asking for the total amount of the loan with your bank so that the proper amount of
redemption can be determined, as you also refuse to give us the amount of redemption.
Per my computation, the principal obligation is only P1,300,000.00 for which the redemption amount
should be based. Because of your failure and refusal consider this as a formal tender of redemption in the
principal amount of P1,300,000.00. This tender is made without however waiving my right to question the
validity of the foreclosure proceedings.
Your reply is highly appreciated, otherwise your failure to do so within a period of two (2) days will
constrain us to file the necessary action in court to protect my interest.
Very truly yours,
(signed)
WENCESLAO V. MARTIR JR.,

This tender of payment is also made to:

35
Page
ATTY. LORETO B. ACHARON
Notary Public who conducted the
Extrajudicial Sale
The general rule in redemption is that it is not sufficient that a person offering to redeem
manifests his desire to do so. The statement of intention must be accompanied by an actual and
simultaneous tender of payment. This constitutes the exercise of the right to repurchase.23

In several cases decided by the Court where the right to repurchase was held to have been
properly exercised, there was an unequivocal tender of payment for the full amount of the
repurchase price. Otherwise, the offer to redeem is ineffectual. Bona fide redemption necessarily
implies a reasonable and valid tender of the entire repurchase price, otherwise the rule on the
redemption period fixed by law can easily be circumvented.24

Moreover, jurisprudence also characterizes a valid tender of payment as one where the full
redemption price is tendered.

“Consequently, in this case, the offer by respondents on July 24, 1986 to redeem the
foreclosed properties for P1,872,935 and the subsequent consignation in court of P1,500,000 on
August 27, 1986, while made within the period of redemption, was ineffective since the amount
offered and actually consigned not only did not include the interest but was in fact also way below
the P2,782,554.66 paid by the highest bidder/purchaser of the properties during the auction sale.

In Bodiongan vs. Court of Appeals, we held:

In order to effect a redemption, the judgment debtor must pay the purchaser the
redemption price composed of the following: (1) the price which the purchaser paid for the
property; (2) interest of 1% per month on the purchase price; (3) the amount of any
assessments or taxes which the purchaser may have paid on the property after the purchase;
and (4) interest of 1% per month on such assessments and taxes x x x.

Furthermore, Article 1616 of the Civil Code of the Philippines provides:

The vendor cannot avail himself of the right to repurchase without returning to the vendee
the price of the sale x x x.
It is not difficult to understand why the redemption price should either be fully offered in
legal tender or else validly consigned in court. Only by such means can the auction winner
be assured that the offer to redeem is being made in good faith.”25

Respondents’ repeated requests for information as regards the amount of loan availed from
the credit line and the amount of redemption, and petitioner’s failure to accede to said requests do
not invalidate the foreclosure. Respondents can find other ways to know the redemption price. For
one, they can examine the Certificate of Sale registered with the Register of Deeds to verify the
purchase price, or upon the filing of their complaint, they could have moved for a computation of
the redemption price and consigned the same to the court. At any rate, whether or not respondents
were diligent in asserting their willingness to pay is irrelevant. Redemption within the period
allowed by law is not a matter of intent but a question of payment or valid tender of the full
redemption price within said period.26

Even the complaint instituted by respondents cannot aid their plight because the institution
of an action to annul a foreclosure sale does not suspend the running of the redemption period.
“Moreover, the period within which to redeem the property sold at a sheriff’s sale is not suspended by the
institution of an action to annul the foreclosure sale. It is clear, then, that petitioners have lost any right or
interest over the subject property primarily because of their failure to redeem the same in the manner and
within the period prescribed by law. Their belated attempts to question the legality and validity of the
foreclosure proceedings and public auction must accordingly fail.”27

Indeed, the law allows respondents the right to redeem their foreclosed properties. But in
so granting that right, the law intended that their offer to redeem be valid and effective,
accompanied by an actual tender of the redemption price. Fixing a definite term within which the
36

property should be redeemed is meant to avoid prolonged economic uncertainty over the ownership
of the thing sold.28
Page
 WHEREFORE, the petition is GRANTED. The November 28, 2007 Decision and the August
6, 2008 Resolution of the Court of Appeals in CA-G.R. CV No. 00477 are REVERSED AND SET
ASIDE. The April 27, 2004 Decision of the Regional Trial Court of General Santos City, Branch 23
upholding the validity of the extrajudicial foreclosure sale is REINSTATED and AFFIRMED with
the MODIFICATION that respondents are no longer allowed to redeem their properties.
SO ORDERED.

37
Page
 G.R. No. 176019. January 12, 2011.*
BPI FAMILY SAVINGS BANK, INC., petitioner, vs. GOLDEN POWER DIESEL SALES CENTER, INC. and
RENATO C. TAN, respondents.

Foreclosure of Mortgage; Auction Sales; Writs of Possession; The general rule is that a purchaser in a public auction
sale of a foreclosed property is entitled to a writ of possession and, upon an ex parte petition of the purchaser, it is ministerial
upon the trial court to issue the writ of possession in favor of the purchaser.—In China Banking Corporation v. Lozada,
557 SCRA 177 (2008), we ruled: It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the
property purchased if it is not redeemed during the period of one year after the registration of the sale. As such, he is entitled
to the possession of the said property and can demand it at any time following the consolidation of ownership in his name
and the issuance to him of a new transfer certificate of title. The buyer can in fact demand possession of the land even during
the redemption period except that he has to post a bond in accordance with Section 7 of Act No. 3135, as amended. No such
bond is required after the redemption period if the property is not redeemed. Possession of the land then becomes an
absolute right of the purchaser as confirmed owner. Upon proper application and proof of title, the issuance of the
writ of possession becomes a ministerial duty of the court.(Emphasis supplied) Thus, the general rule is that a purchaser
in a public auction sale of a foreclosed property is entitled to a writ of possession and, upon an ex parte petition of the
purchaser, it is ministerial upon the trial court to issue the writ of possession in favor of the purchaser.

Same; Same; Same; In an extrajudicial foreclosure of real property, when the foreclosed property is in the possession
of a third party holding the same adversely to the judgment obligor, the issuance by the trial court of a writ of possession
in favor of the purchaser of said real property ceases to be ministerial and may no longer be done ex parte, but for the
exception to apply, the property need not only be possessed by a third party, but also held by the third party adversely to
the judgment obligor.—There is, however, an exception. Section 33, Rule 39 of the Rules of Court provides: Section
33. Deed and possession to be given at expiration of redemption period; by whom executed or given.—x x x Upon the
expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the rights, title,
interest and claim of the judgment obligor to the property as of the time of the levy. The possession of the property shall be
given to the purchaser or last redemptioner by the same officer unless a third party is actually holding the property
adversely to the judgment obligor. (Emphasis supplied) Therefore, in an extrajudicial foreclosure of real property, when
the foreclosed property is in the possession of a third party holding the same adversely to the judgment obligor, the issuance
by the trial court of a writ of possession in favor of the purchaser of said real property ceases to be ministerial and may no
longer be done ex parte. The procedure is for the trial court to order a hearing to determine the nature of the adverse
possession. For the exception to apply, however, the property need not only be possessed by a third party, but also held by
the third party adversely to the judgment obligor.

Same; Same; Same; The exception provided under Section 33 of Rule 39 of the Revised Rules of Court contemplates a
situation in which a third party holds the property by adverse title or right, such as that of a co-owner, tenant or
usufructuary.—In China Bank v. Lozada, 557 SCRA 177 (2008), we discussed the meaning of “a third party who is actually
holding the property adversely to the judgment obligor.” We stated: The exception provided under Section 33 of Rule 39 of
the Revised Rules of Court contemplates a situation in which a third party holds the property by adverse title or right, such
as that of a co-owner, tenant or usufructuary. The co-owner, agricultural tenant, and usufructuary possess the property in
their own right, and they are not merely the successor or transferee of the right of possession of another co-owner or the
owner of the property. In this case, respondents cannot claim that their right to possession over the properties is analogous
to any of these. Respondents cannot assert that their right of possession is adverse to that of CEDEC when they have no
independent right of possession other than what they acquired from CEDEC. Since respondents are not holding the
properties adversely to CEDEC, being the latter’s successors-in-interest, there was no reason for the trial court to order the
suspension of the implementation of the writ of possession.
Same; Same; Same; It is settled that a pending action for annulment of mortgage or foreclosure sale does not stay the
issuance of the writ of possession.—It is settled that a pending action for annulment of mortgage or foreclosure sale does
not stay the issuance of the writ of possession. The trial court, where the application for a writ of possession is filed, does
not need to look into the validity of the mortgage or the manner of its foreclosure. The purchaser is entitled to a writ of
possession without prejudice to the outcome of the pending annulment case.
PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

CARPIO, J.:

The Case

This is a petition for review1 of the 13 March 2006 Decision2 and 19 December 2006 Resolution3 of the Court
of Appeals in CA-G.R. SP No. 78626. In its 13 March 2006 Decision, the Court of Appeals denied petitioner BPI
Family Savings Bank, Inc.’s (BPI Family) petition for mandamus and certiorari. In its 19 December 2006
Resolution, the Court of Appeals denied BPI Family’s motion for reconsideration.

The Facts
38

On 26 October 1994, CEDEC Transport, Inc. (CEDEC) mortgaged two parcels of land covered by Transfer
Page

Certificate of Title (TCT) Nos. 134327 and 134328 situated in Malibay, Pasay City, including all the
improvements thereon (properties), in favor of BPI Family to secure a loan of P6,570,000. On the same day, the
mortgage was duly annotated on the titles under Entry No. 94-2878. On 5 April and 27 November 1995, CEDEC
obtained from BPI Family additional loans of P2,160,000 and P1,140,000, respectively, and again mortgaged the
same properties. These latter mortgages were duly annotated on the titles under Entry Nos. 95-6861 and 95-11041,
respectively, on the same day the loans were obtained.

Despite demand, CEDEC defaulted in its mortgage obligations. On 12 October 1998, BPI Family filed with
the ex-officio sheriff of the Regional Trial Court of Pasay City (RTC) a verified petition for extrajudicial
foreclosure of real estate mortgage over the properties under Act No. 3135, as amended.4

On 10 December 1998, after due notice and publication, the sheriff sold the properties at public auction. BPI
Family, as the highest bidder, acquired the properties for P13,793,705.31. On 14 May 1999, the Certificate of
Sheriff’s Sale, dated 24 February 1999, was duly annotated on the titles covering the properties.

On 15 May 1999, the one-year redemption period expired without CEDEC redeeming the properties. Thus,
the titles to the properties were consolidated in the name of BPI Family. On 13 September 2000, the Registry of
Deeds of Pasay City issued new titles, TCT Nos. 142935 and 142936, in the name of BPI Family.

However, despite several demand letters, CEDEC refused to vacate the properties and to surrender possession
to BPI Family. On 31 January 2002, BPI Family filed an Ex-Parte Petition for Writ of Possession over the
properties with Branch 114 of the Regional Trial Court of Pasay City (trial court). In its 27 June 2002 Decision,
the trial court granted BPI Family’s petition.5 On 12 July 2002, the trial court issued the Writ of Possession.

On 29 July 2002, respondents Golden Power Diesel Sales Center, Inc. and Renato C. Tan6 (respondents) filed
a Motion to Hold Implementation of the Writ of Possession.7Respondents alleged that they are in possession of
the properties which they acquired from CEDEC on 10 September 1998 pursuant to the Deed of Absolute Sale
with Assumption of Mortgage (Deed of Sale).8 Respondents argued that they are third persons claiming rights
adverse to CEDEC, the judgment obligor and they cannot be deprived of possession over the properties.
Respondents also disclosed that they filed a complaint before Branch 111 of the Regional Trial Court of Pasay
City, docketed as Civil Case No. 99-0360, for the cancellation of the Sheriff’s Certificate of Sale and an order to
direct BPI Family to honor and accept the Deed of Absolute Sale between CEDEC and respondents.9

On 12 September 2002, the trial court denied respondents’ motion.10 Thereafter, the trial court issued an alias
writ of possession which was served upon CEDEC and all other persons claiming rights under them.

However, the writ of possession expired without being implemented. On 22 January 2003, BPI Family filed
an Urgent Ex-Parte Motion to Order the Honorable Branch Clerk of Court to Issue Alias Writ of Possession. In
an Order dated 27 January 2003, the trial court granted BPI Family’s motion.

Before the alias writ could be implemented, respondent Renato C. Tan filed with the trial court an Affidavit
of Third Party Claim11 on the properties. Instead of implementing the writ, the sheriff referred the matter to the
trial court for resolution.

On 11 February 2003, BPI Family filed an Urgent Motion to Compel Honorable Sheriff and/or his Deputy to
Enforce Writ of Possession and to Break Open the properties. In its 7 March 2003 Resolution, the trial court
denied BPI Family’s motion and ordered the sheriff to suspend the implementation of the alias writ of
possession.12 According to the trial court, “the order granting the alias writ of possession should not affect third
persons holding adverse rights to the judgment obligor.” The trial court admitted that in issuing the first writ of
possession it failed to take into consideration respondents’ complaint before Branch 111 claiming ownership of
the property. The trial court also noted that respondents were in actual possession of the properties and had been
updating the payment of CEDEC’s loan balances with BPI Family. Thus, the trial court found it necessary to
amend its 12 September 2002 Order and suspend the implementation of the writ of possession until Civil Case
No. 99-0360 is resolved.

BPI Family filed a motion for reconsideration. In its 20 June 2003 Resolution, the trial court denied the
motion.13

BPI Family then filed a petition for mandamus and certiorari with application for a temporary restraining
order or preliminary injunction before the Court of Appeals. BPI Family argued that the trial court acted with
39

grave abuse of discretion amounting to lack or excess of jurisdiction when it ordered the suspension of the
implementation of the alias writ of possession. According to BPI Family, it was the ministerial duty of the trial
Page
court to grant the writ of possession in its favor considering that it was now the owner of the properties and that
once issued, the writ should be implemented without delay.

The Court of Appeals dismissed BPI Family’s petition. The dispositive portion of the 13 March 2006 Decision
reads:
“WHEREFORE, the instant Petition for Writ of Mandamus and Writ of Certiorari with Application for a TRO and/or
Preliminary Injunction is hereby DENIED. The twin Resolutionsdated March 7, 2003 and June 20, 2003, both issued by the
public respondent in LRC Case No. 02-0003, ordering the sheriff to suspend the implementation of the Alias Writ of
Possession issued in favor of the petitioner, and denying its Urgent Omnibus Motion thereof, respectively, are
hereby AFFIRMED.
SO ORDERED.”14

BPI Family filed a motion for reconsideration. In its 19 December 2006 Resolution, the Court of Appeals
denied the motion.

The Ruling of the Court of Appeals

The Court of Appeals ruled that the trial court did not commit grave abuse of discretion in suspending the
implementation of the alias writ of possession because respondents were in actual possession of the properties
and are claiming rights adverse to CEDEC, the judgment obligor. According to the Court of Appeals, the principle
that the implementation of the writ of possession is a mere ministerial function of the trial court is not without
exception. The Court of Appeals held that the obligation of the court to issue an ex parte writ of possession in
favor of the purchaser in an extrajudicial foreclosure sale ceases to be ministerial once it appears that there is a
third party in possession of the property who is claiming a right adverse to that of the debtor or mortgagor.

The Issues

BPI Family raises the following issues:

A.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE FINDING OF THE
HONORABLE REGIONAL TRIAL COURT THAT DESPITE THE FACT THAT PRIVATE RESPONDENTS MERELY
STEPPED INTO THE SHOES OF MORTGAGOR CEDEC, BEING THE VENDEE OF THE PROPERTIES IN
QUESTION, THEY ARE CATEGORIZED AS THIRD PERSONS IN POSSESSION THEREOF WHO ARE CLAIMING
A RIGHT ADVERSE TO THAT OF THE DEBTOR/MORTGAGOR CEDEC.

B.
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN SUSTAINING THE AFOREMENTIONED
TWIN ORDERS SUSPENDING THE IMPLEMENTATION OF THE WRIT OF POSSESSION ON THE GROUND
THAT THE ANNULMENT CASE FILED BY PRIVATE RESPONDENTS IS STILL PENDING DESPITE THE
ESTABLISHED RULING THAT PENDENCY OF A CASE QUESTIONING THE LEGALITY OF A MORTGAGE OR
AUCTION SALE CANNOT BE A GROUND FOR THE NON-ISSUANCE AND/OR NON-IMPLEMENTATION OF A
WRIT OF POSSESSION.15

The Ruling of the Court

The petition is meritorious.

BPI Family argues that respondents cannot be considered “a third party who is claiming a right adverse to that
of the debtor or mortgagor” because respondents, as vendee, merely stepped into the shoes of CEDEC, the vendor
and judgment obligor. According to BPI Family, respondents are mere extensions or successors-in-interest of
CEDEC. BPI Family also argues that the pendency of an action questioning the validity of a mortgage or auction
sale cannot be a ground to oppose the implementation of a writ of possession.

On the other hand, respondents insist that they are third persons who claim rights over the properties adverse
to CEDEC. Respondents argue that the obligation of the court to issue an ex parte writ of possession in favor of
the purchaser in an extrajudicial foreclosure sale ceases to be ministerial once it appears that there is a third party
in possession of the property who is claiming a right adverse to that of the judgment obligor.

In extrajudicial foreclosures of real estate mortgages, the issuance of a writ of possession is governed by
Section 7 of Act No. 3135, as amended, which provides:
“SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance
(Regional Trial Court) of the province or place where the property or any part thereof is situated, to give him possession
thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of
40

twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without
Page

complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion
in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property
registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any
other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with
any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in
paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act
Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession
issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.”

This procedure may also be availed of by the purchaser seeking possession of the foreclosed property bought
at the public auction sale after the redemption period has expired without redemption having been made.16

In China Banking Corporation v. Lozada,17 we ruled:

“It is thus settled that the buyer in a foreclosure sale becomes the absolute owner of the property purchased if it is not
redeemed during the period of one year after the registration of the sale. As such, he is entitled to the possession of the said
property and can demand it at any time following the consolidation of ownership in his name and the issuance to him of a
new transfer certificate of title. The buyer can in fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act No. 3135, as amended. No such bond is required after
the redemption period if the property is not redeemed. Possession of the land then becomes an absolute right of the
purchaser as confirmed owner. Upon proper application and proof of title, the issuance of the writ of possession
becomes a ministerial duty of the court.”18 (Emphasis supplied)

Thus, the general rule is that a purchaser in a public auction sale of a foreclosed property is entitled to a writ
of possession and, upon an ex parte petition of the purchaser, it is ministerial upon the trial court to issue the writ
of possession in favor of the purchaser.

There is, however, an exception. Section 33, Rule 39 of the Rules of Court provides:
“Section 33. Deed and possession to be given at expiration of redemption period; by whom executed or given.—x x
x

Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the
rights, title, interest and claim of the judgment obligor to the property as of the time of the levy. The possession of the
property shall be given to the purchaser or last redemptioner by the same officer unless a third party is actually holding
the property adversely to the judgment obligor.” (Emphasis supplied)

Therefore, in an extrajudicial foreclosure of real property, when the foreclosed property is in the possession
of a third party holding the same adversely to the judgment obligor, the issuance by the trial court of a writ of
possession in favor of the purchaser of said real property ceases to be ministerial and may no longer be done ex
parte.19 The procedure is for the trial court to order a hearing to determine the nature of the adverse
possession.20 For the exception to apply, however, the property need not only be possessed by a third party, but
also held by the third party adversely to the judgment obligor.

In this case, BPI Family invokes the general rule that they are entitled to a writ of possession because
respondents are mere successors-in-interest of CEDEC and do not possess the properties adversely to CEDEC.
Respondents, on the other hand, assert the exception and insist that they hold the properties adversely to CEDEC
and that their possession is a sufficient obstacle to the ex parte issuance of a writ of possession in favor of BPI
Family.

Respondents’ argument fails to persuade the Court. It is clear that respondents acquired possession over the
properties pursuant to the Deed of Sale which provides that for P15,000,000 CEDEC will “sell, transfer and
convey” to respondents the properties “free from all liens and encumbrances excepting the mortgage as may be
subsisting in favor of the BPI FAMILY SAVINGS BANK.”21 Moreover, the Deed of Sale provides that
respondents bind themselves to assume “the payment of the unpaid balance of the mortgage indebtedness of the
VENDOR (CEDEC) amounting to P7,889,472.48, as of July 31, 1998, in favor of the aforementioned mortgagee
(BPI Family) by the mortgage instruments and does hereby further agree to be bound by the precise terms and
conditions therein contained.”22

In Roxas v. Buan,23 we ruled:

“It will be recalled that Roxas’ possession of the property was premised on its alleged sale to him by Valentin for the
amount of P100,000.00. Assuming this to be true, it is readily apparent that Roxas holds title to and possesses the property
as Valentin’s transferee. Any right he has to the property is necessarily derived from that of Valentin. As transferee, he steps
into the latter’s shoes. Thus, in the instant case, considering that the property had already been sold at public auction pursuant
to an extrajudicial foreclosure, the only interest that may be transferred by Valentin to Roxas is the right to redeem it within
41

the period prescribed by law. Roxas is therefore the successor-in-interest of Valentin, to whom the latter had conveyed his
interest in the property for the purpose of redemption. Consequently, Roxas’ occupancy of the property cannot be considered
Page

adverse to Valentin.”24
 In this case, respondents’ possession of the properties was premised on the sale to them by CEDEC for the
amount of P15,000,000. Therefore, respondents hold title to and possess the properties as CEDEC’s transferees
and any right they have over the properties is derived from CEDEC. As transferees of CEDEC, respondents
merely stepped into CEDEC’s shoes and are necessarily bound to acknowledge and respect the mortgage CEDEC
had earlier executed in favor of BPI Family.25 Respondents are the successors-in-interest of CEDEC and thus,
respondents’ occupancy over the properties cannot be considered adverse to CEDEC.

Moreover, in China Bank v. Lozada,26 we discussed the meaning of “a third party who is actually holding the
property adversely to the judgment obligor.” We stated:
“The exception provided under Section 33 of Rule 39 of the Revised Rules of Court contemplates a situation in which
a third party holds the property by adverse title or right, such as that of a co-owner, tenant or usufructuary. The co-owner,
agricultural tenant, and usufructuary possess the property in their own right, and they are not merely the successor or
transferee of the right of possession of another co-owner or the owner of the property.”27

In this case, respondents cannot claim that their right to possession over the properties is analogous to any of
these. Respondents cannot assert that their right of possession is adverse to that of CEDEC when they have no
independent right of possession other than what they acquired from CEDEC. Since respondents are not holding
the properties adversely to CEDEC, being the latter’s successors-in-interest, there was no reason for the trial court
to order the suspension of the implementation of the writ of possession.

Furthermore, it is settled that a pending action for annulment of mortgage or foreclosure sale does not stay the
issuance of the writ of possession.28 The trial court, where the application for a writ of possession is filed, does
not need to look into the validity of the mortgage or the manner of its foreclosure.29 The purchaser is entitled to a
writ of possession without prejudice to the outcome of the pending annulment case.30

In this case, the trial court erred in issuing its 7 March 2003 Order suspending the implementation of the alias
writ of possession. Despite the pendency of Civil Case No. 99-0360, the trial court should not have ordered the
sheriff to suspend the implementation of the writ of possession. BPI Family, as purchaser in the foreclosure sale,
is entitled to a writ of possession without prejudice to the outcome of Civil Case No. 99-0360.

WHEREFORE, we GRANT the petition. We SET ASIDE the 13 March 2006 Decision and the 19 December
2006 Resolution of the Court of Appeals in CA-G.R. SP No. 78626. We SET ASIDE the 7 March and 20 June
2003 Resolutions of the Regional Trial Court, Branch 114, Pasay City. We ORDER the sheriff to proceed with
the implementation of the writ of possession without prejudice to the outcome of Civil Case No. 99-0360.
SO ORDERED.

Note.—Any question regarding the validity of the mortgage or its foreclosure cannot be a legal
ground for refusing the issuance of a writ of possession—regardless of whether or not there is a
pending suit for annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a
writ of possession, without prejudice of course to the eventual outcome of the said case. (Jetri
Construction Corporation vs. Bank of the Philippine Islands, 524 SCRA 522 [2007]) 42
Page
 G.R. No. 157659. January 25, 2010.*
ELIGIO P. MALLARI, petitioner, vs. GOVERNMENT SERVICE INSURANCE SYSTEM and
THE PROVINCIAL SHERIFF OF PAMPANGA, respondents.
Remedial Law; Certiorari; Petition for certiorari required to be filed not later than sixty (60) days from
notice of the judgment, order or resolution or in case a motion for reconsideration or new trial is timely filed,
whether such motion is required or not the sixty (60) day period shall be counted from notice of the denial of
the said motion.— Considering that the motion for reconsideration dated August 17, 2001 denied by the
order dated February 11, 2002 was in reality and effect a prohibited second motion for reconsideration vis-
à-visthe orders dated October 21, 1999 and October 8, 1999, the assailed orders dated July 30, 2001, October
21, 1999, and October 8, 1999 could no longer be subject to attack by certiorari. Thus, the petition
for certiorari filed only in March 2002 was already improper and tardy for being made beyond the 60-day
limitation defined in Section 4, Rule 65, 1997 Rules of Civil Procedure, as amended, which requires a
petition for certiorari to be filed “not later than sixty (60) days from notice of the judgment, order or
resolution,” or, in case a motion for reconsideration or new trial is timely filed, whether such motion is
required or not, “the sixty (60) day period shall be counted from notice of the denial of the said motion.”

Same; Same; The 60-day limitation is considered inextendible.—It is worth emphasizing that the 60-
day limitation is considered inextendible, because the limitation has been prescribed to avoid any
unreasonable delay that violates the constitutional rights of parties to a speedy disposition of their cases.

Writs of Possession; As defaulting mortgagor, petitioner is not entitled to any prior notice of the
application for the issuance of the writ of possession.—We sustain the CA, and confirm that the petitioner,
as defaulting mortgagor, was not entitled under Act 3135, as amended, and its pertinent jurisprudence to
any prior notice of the application for the issuance of the writ of possession.

Same; Instances When Issued.—A writ of possession, which commands the sheriff to place a person in
possession of real property, may be issued in: (1) land registration proceedings under Section 17 of Act No.
496; (2) judicial foreclosure, provided the debtor is in possession of the mortgaged property, and no third
person, not a party to the foreclosure suit, had intervened; (3) extrajudicial foreclosure of a real estate
mortgage, pending redemption under Section 7 of Act No. 3135, as amended by Act No. 4118; and (4)
execution sales, pursuant to the last paragraph of Section 33, Rule 39 of the Rules of Court.

Same; Mortgages; Redemption; The redemption period envisioned under Act 3135 is reckoned from the
date of the registration of the sale not from and after the date of the sale.—We clarify that the redemption
period envisioned under Act 3135 is reckoned from the date of the registration of the sale, not from and after
the date of the sale, as the text of Act 3135 shows. Although the original Rules of Court (effective on July 1,
1940) incorporated Section 464 to Section 466 of the Code of Civil Procedure as its Section 25 (Section 464);
Section 26 (Section 465); and Section 27 (Section 466) of Rule 39, with Section 27 still expressly reckoning
the redemption period to be “at any time within twelve months after the sale;” and although the Revised
Rules of Court (effective on January 1, 1964) continued to provide in Section 30 of Rule 39 that the
redemption be made from the purchaser “at any time within twelve (12) months after the sale,” the 12-
month period of redemption came to be held as beginning “to run not from the date of the sale but from the
time of registration of the sale in the Office of the Register of Deeds.” This construction was due to the fact
that the sheriff’s sale of registered (and unregistered) lands did not take effect as a conveyance, or did not
bind the land, until the sale was registered in the Register of Deeds.

Same; Same; Same; The consolidation of ownership in the purchaser’s name and the issuance to him of
a new Transfer Certificate of Title (TCT) then entitles him to demand possession of the property at any time
and the issuance of a writ of possession to him becomes a matter of right upon the consolidation of title in
his name.—The mortgagor or his successor-in-interest must redeem the foreclosed property within one year
from the registration of the sale with the Register of Deeds in order to avoid the title from consolidating in
the purchaser. By failing to redeem thuswise, the mortgagor loses all interest over the foreclosed property.
The purchaser, who has a right to possession that extends beyond the expiration of the redemption period,
becomes the absolute ownerof the property when no redemption is made, that it is no longer necessary for
the purchaser to file the bond required under Section 7 of Act No. 3135, as amended, considering that the
possession of the land becomes his absolute right as the land’s confirmed owner. The consolidation of
ownership in the purchaser’s name and the issuance to him of a new TCT then entitles him to demand
possession of the property at any time, and the issuance of a writ of possession to him becomes a matter of
right upon the consolidation of title in his name.35 Same; Court cannot exercise any discretion to
determine whether or not to issue the writ, for the issuance of the writ to the purchaser in an extrajudicial
43

foreclosure sale becomes a ministerial function.—The court can neither halt nor hesitate to issue the writ of
possession. It cannot exercise any discretion to determine whether or not to issue the writ, for the issuance
Page

of the writ to the purchaser in an extrajudicial foreclosure sale becomes a ministerial function.
 Same; Proceedings upon an application for a writ of possession is ex parte and summary in nature.—
The proceeding upon an application for a writ of possession is ex parte and summary in nature, brought for
the benefit of one party only and without notice being sent by the court to any person adverse in interest.
The relief is granted even without giving an opportunity to be heard to the person against whom the relief
is sought. Its nature as an ex parte petition under Act No. 3135, as amended, renders the application for
the issuance of a writ of possession a non-litigious proceeding.

Contempt; Two alternative ways by which a person may be charged with indirect contempt.—A person
may be charged with indirect contempt only by either of two alternative ways, namely: (1) by a verified
petition, if initiated by a party; or (2) by an orderor any other formal charge requiring the respondent to
show cause why he should not be punished for contempt, if made by a court against which the contempt is
committed. In short, a charge of indirect contempt must be initiated through a verified petition, unless the
charge is directly made by the court against which the contemptuous act is committed.
PETITION for review on certiorari of a decision of the Court of Appeals.

BERSAMIN, J.:
By petition for review on certiorari, the petitioner appeals the decision promulgated on March
17, 2003, whereby the Court of Appeals (CA) dismissed his petition for certiorari.36

Antecedents
In 1968, the petitioner obtained two loans totaling P34,000.00 from respondent Government
Service Insurance System (GSIS). To secure the performance of his obligations, he mortgaged two
parcels of land registered under his and his wife Marcelina Mallari’s names. However, he paid
GSIS about ten years after contracting the obligations only P10,000.00 on May 22, 1978 and
P20,000.00 on August 11, 1978.1

What followed thereafter was the series of inordinate moves of the petitioner to delay the efforts
of GSIS to recover on the debt, and to have the unhampered possession of the foreclosed property.

After reminding the petitioner of his unpaid obligation on May 2, 1979, GSIS sent on November
2, 1981 a telegraphic demand to him to update his account. On November 10, 1981, he requested
a final accounting, but did not do anything more. Nearly three years later, on March 21, 1984,
GSIS applied for the extrajudicial foreclosure of the mortgage by reason of his failure to settle his
account. On November 22, 1984, he requested an updated computation of his outstanding account.
On November 29, 1984, he persuaded the sheriff to hold the publication of the foreclosure notice
in abeyance, to await action on his pending request for final accounting (that is, taking his
payments of P30,000.00 made in 1978 into account). On December 13, 1984, GSIS responded to
his request and rendered a detailed explanation of the account. On May 30, 1985, it sent another
updated statement of account. On July 21, 1986, it finally commenced extrajudicial foreclosure
proceedings against him because he had meanwhile made no further payments.

On August 22, 1986, the petitioner sued GSIS and the Provincial Sheriff of Pampanga in the
Regional Trial Court (RTC), Branch 44, in San Fernando, Pampanga, docketed as Civil Case No.
7802,2 ostensibly to enjoin them from proceeding against him for injunction (with an application
for preliminary injunction). The RTC ultimately decided Civil Case No. 7802 in his favor, nullifying
the extrajudicial foreclosure and auction sale; cancelling Transfer Certificate of Title (TCT) No.
284272-R and TCT No. 284273-R already issued in the name of GSIS; and reinstating TCT No.
61171-R and TCT No. 54835-R in his and his wife’s names.3

GSIS appealed the adverse decision to the CA, which reversed the RTC on March 27, 1996.4The
petitioner elevated the CA decision to this Court via petition for review on certiorari (G.R. No.
124468).5

On September 16, 1996, this Court denied his petition for review. 6 On January 15, 1997, this
Court turned down his motion for reconsideration.7

As a result, the CA decision dated March 27, 1996 became final and executory, rendering
unassailable both the extrajudicial foreclosure and auction sale held on September 22, 1986, and
44

the issuance of TCT No. 284272-R and TCT No. 284273-R in the name of GSIS.
Page
 GSIS thus filed an ex parte motion for execution and for a writ of possession on September 2,
1999.8 Granting the ex parte motion on October 8, 1999,9 the RTC issued a writ of execution cum
writ of possession on October 21, 1999,10ordering the sheriff to place GSIS in possession of the
properties.

The sheriff failed to serve the writ, however, partly because of the petitioner’s request for an
extension of time within which to vacate the properties. It is noted that GSIS acceded to the
request.11

Yet, the petitioner did not voluntarily vacate the properties, but instead filed a motion for
reconsideration and/or to quash the writ of execution on March 27, 2000.12Also, the petitioner
commenced a second case against GSIS and the provincial sheriff in the RTC in San Fernando,
Pampanga (Civil Case No. 12053), ostensibly for consignation (coupled with a prayer for a writ of
preliminary injunction or temporary restraining order). However, the RTC dismissed Civil Case
No. 12053 on November 10, 2000 on the ground of res judicata, impelling him to appeal the
dismissal to the CA (C.A.-G.R. CV No. 70300).13

In the meanwhile, the petitioner filed a motion dated April 5, 2000 in Civil Case No. 7802 to
hold GSIS, et al.14 in contempt of court for painting the fence of the properties during the pendency
of his motion for reconsideration and/or to quash the writ of execution.15 He filed another motion in
the same case, dated April 17, 2000, to hold GSIS and its local manager Arnulfo B. Cardenas in
contempt of court for ordering the electric company to cut off the electric services to the properties
during the pendency of his motion for reconsideration and/or to quash the writ of execution.16

To prevent the Presiding Judge of Branch 44 of the RTC from resolving the pending incidents
in Civil Case No. 7802, GSIS moved to inhibit him for alleged partiality towards the petitioner as
borne out by his failure to act on the motion for reconsideration and/or to quash writ of
execution, motions for contempt of court, and motion for issuance of break open order for more than
a year from their filing, praying that the case be re-raffled to another branch of the
RTC.17 Consequently, Civil Case No. 7802 was re-assigned to Branch 48, whose Presiding Judge
then denied the motions for contempt of court on July 30, 2001, and directed the Branch Clerk of
Court to cause the re-implementation of the writ of execution cum writ of possession dated October
21, 1999.18

The petitioner sought reconsideration,19 but the Presiding Judge of Branch 48 denied his motion
for reconsideration on February 11, 2002.20

Ruling of the CA

By petition for certiorari dated March 15, 2002 filed in the CA, the petitioner assailed the orders
of February 11, 2002, July 30, 2001, October 21, 1999, and October 8, 1999. 21On March 17, 2003,
however, the CA dismissed the petition for certiorari for lack of merit,22 stating:
“We find the instant petition patently devoid of merit. This Court is not unaware of the legal tactics and
maneuvers employed by the petitioner in delaying the disposition of the subject case (Civil Case No. 7802)
which has already become final and executory upon the final resolution by the Supreme Court affirming
the judgment rendered by the Court of Appeals. We construe the actuation of the petitioner in resorting to
all kinds of avenues accorded by the Rules of Court, through the filing of several pleadings and/or motions
in litigating this case, as running counter to the intendment of the Rules to be utilized in promoting the
objective of securing a just, speedy and inexpensive disposition of every action and proceeding.

The issues raised in the present controversy have already been settled in our existing jurisprudence on
the subject. In the case of De Jesus vs. Obnamia, Jr., the Supreme Court ruled that “generally, no notice or
even prior hearing of a motion for execution is required before a writ of execution is issued when a decision
has already become final.”

The recent accretion to the corpus of our jurisprudence has established the principle of law, as
enunciated in Buaya vs. Stronghold Insurance Co., Inc. that “once a judgment becomes final and executory,
the prevailing party can have it executed as a matter of right, and the issuance of a Writ of Execution becomes
45

a ministerial duty of the court.”

Page
 The rule is also firmly entrenched in the aforecited Buaya casethat “the effective and efficient
administration of justice requires that once a judgment has become final, the prevailing party should not
be deprived of the fruits of the verdict by subsequent suits on the same issues filed by the same parties.
Courts are duty-bound to put an end to controversies. Any attempt to prolong, resurrect or juggle them
should be firmly struck down. The system of judicial review should not be misused and abused to evade the
operation of final and executory judgments.”

As succinctly put in Tag Fibers, Inc. vs. National Labor Relations Commission, the Supreme Court is
emphatic in saying that “the finality of a decision is a jurisdictional event that cannot be made to depend on
the convenience of a party.”

We find no cogent reason to discompose the findings of the court below. Thus, we sustain the assailed
Orders of the court a quo since no abuse of discretion has been found to have been committed by the latter
in their issuance. Moreover, this Court finds this petition to be part of the dilatory tactics of the petitioner
to stall the execution of a final and executory decision in Civil Case No. 7802 which has already been
resolved with finality by no less than the highest tribunal of the land.

WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit. Costs
against the petitioner.
SO ORDERED.23
Issues
Hence, this appeal.
The petitioner insists herein that the CA gravely erred in refusing “to accept the nullity of the
following orders” of the RTC, to wit:
1. THE ORDER OF THE TRIAL COURT DATED OCTOBER 8, 1999, GRANTING THE EX-
PARTE MOTION FOR EXECUTION AND/OR ISSUANCE OF THE WRIT OF EXECUTION OF
POSSESSION IN FAVOR OF THE RESPONDENT GSIS;
2. THE ORDER OF THE TRIAL COURT DATED OCTOBER 21, 1999 GRANTING THE ISSUANCE
AND IMPLEMENTATION OF THE WRIT OF EXECUTION CUMWRIT OF POSSESSION IN
FAVOR OF RESPONDENT GSIS;
3. THE ORDER OF THE TRIAL COURT DATED JULY 30, 2001 DIRECTING TO CAUSE THE RE-
IMPLEMENTATION OF THE WRIT OF EXECUTION CUM WRIT OF POSSESSION IN FAVOR
OF THE RESPONDENT GSIS; and
4. THE ORDER OF THE TRIAL COURT DATED FEBRUARY 11, 2002, DENYING THE MOTION
FOR RECONSIDERATION OF THE ORDER DATED SEPTEMBER 14, 2001, IN RELATION TO
THE COURT ORDER DATED JULY 30, 2001.24

Ruling of the Court

The petition for review on certiorari absolutely lacks merit.

Petition for Certiorari in CA

Was Filed Beyond Reglementary Period
The petition assailed before the CA on certiorari the following orders of the RTC, to wit:
1. The order dated October 8, 1999 (granting the ex parte motion for execution and/or
issuance of the writ of execution cum writ of possession of GSIS);25
2. The order dated October 21, 1999 (directing the issuance of the writ of execution cum writ
of possession in favor of GSIS);26

3. The order dated July 30, 2001 (requiring the Branch Clerk of Court to cause the re-
implementation of the writ of execution cum writ of possession, and dismissing the
motions to hold GSIS, et al.in contempt);27 and

4. The order dated February 11, 2002 (denying the motion for reconsideration dated August
17, 2001 seeking the reconsideration of the order dated July 30, 2001).28

The July 30, 2001 order denied the petitioner’s motion for reconsideration and/or to quash writ
of execution, and motion to hold GSIS, Tony Dimatulac, et al. and Arnulfo Cardenas in contempt;
and declared GSIS’s motion for issuance of break open order and for designation of special sheriff
46

from GSIS Legal Services Group as premature. In turn, the motion for reconsideration and/or to
Page

quash writ of execution denied by the order of July 30, 2001 had merely challenged the orders of
October 8, 1999 and October 21, 1999 (granting the writ of execution cum writ of possessionas a
matter of course).

Considering that the motion for reconsideration dated August 17, 2001 denied by the order
dated February 11, 2002 was in reality and effect a prohibited second motion for reconsideration
vis-à-vis the orders dated October 21, 1999 and October 8, 1999, the assailed orders dated July 30,
2001, October 21, 1999, and October 8, 1999 could no longer be subject to attack by certiorari.
Thus, the petition for certiorari filed only in March 2002 was already improper and tardy for being
made beyond the 60-day limitation defined in Section 4, Rule 65, 1997 Rules of Civil Procedure, as
amended,29 which requires a petition for certiorari to be filed “not later than sixty (60) days from
notice of the judgment, order or resolution,” or, in case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, “the sixty (60) day period shall be counted
from notice of the denial of the said motion.

”It is worth emphasizing that the 60-day limitation is considered inextendible, because the
limitation has been prescribed to avoid any unreasonable delay that violates the constitutional
rights of parties to a speedy disposition of their cases.30

II
Nature of the Writ of Possession and its Ministerial Issuance
The petitioner claims that he had not been notified of the motion seeking the issuance of the writ
of execution cum writ of possession; hence, the writ was invalid.

As earlier shown, the CA disagreed with him.

We sustain the CA, and confirm that the petitioner, as defaulting mortgagor, was not entitled
under Act 3135, as amended, and its pertinent jurisprudence to any prior notice of the application
for the issuance of the writ of possession.

A writ of possession, which commands the sheriff to place a person in possession of real
property, may be issued in: (1) land registration proceedings under Section 17 of Act No. 496; (2)
judicial foreclosure, provided the debtor is in possession of the mortgaged property, and no third
person, not a party to the foreclosure suit, had intervened; (3) extrajudicial foreclosure of a real
estate mortgage, pending redemption under Section 7 of Act No. 3135, as amended by Act No.
4118; and (4) execution sales, pursuant to the last paragraph of Section 33, Rule 39 of the Rules of
Court.31

Anent the redemption of property sold in an extrajudicial foreclosure sale made pursuant to the
special power referred to in Section 132 of Act No. 3135,33 as amended, the debtor, his successor-in-
interest, or any judicial creditor or judgment creditor of said debtor, or any person having a lien
on the property subsequent to the mortgage or deed of trust under which the property is sold has
the right to redeem the property at anytime within the term of one year from and after the date of
the sale, such redemption to be governed by the provisions of Section 464 to Section 466 of the Code
of Civil Procedure, to the extent that said provisions were not inconsistent with the provisions of
Act 3135.34

In this regard, we clarify that the redemption period envisioned under Act 3135 is
reckoned from the date of the registration of the sale, not from and after the date of the sale, as the
text of Act 3135 shows. Although the original Rules of Court (effective on July 1, 1940) incorporated
Section 464 to Section 466 of the Code of Civil Procedure as its Section 25 (Section 464); Section 26
(Section 465); and Section 27 (Section 466) of Rule 39, with Section 27 still expressly reckoning the
redemption period to be “at any time within twelve months after the sale”: and although
the Revised Rules of Court (effective on January 1, 1964) continued to provide in Section 30 of Rule
39 that the redemption be made from the purchaser “at any time within twelve (12) months after
the sale,”35 the 12-month period of redemption came to be held as beginning “to run not from the
date of the sale but from the time of registration of the sale in the Office of the Register of
Deeds.”36 This construction was due to the fact that the sheriff’s sale of registered (and
unregistered) lands did not take effect as a conveyance, or did not bind the land, until the sale was
47

registered in the Register of Deeds.37

Page
 Desiring to avoid any confusion arising from the conflict between the texts of the Rules of
Court (1940 and 1964) and Act No. 3135, on one hand, and the jurisprudence clarifying the
reckoning of the redemption period in judicial sales of real property, on the other hand, the Court
has incorporated in Section 28 of Rule 39 of the current Rules of Court (effective on July 1, 1997)
the foregoing judicial construction of reckoning the redemption period from the date of the
registration of the certificate of sale, to wit:
“Sec. 28. Time and manner of, and amounts payable on, successive redemptions; notice to be given and
filed.—The judgment obligor, or redemptioner, may redeem the property from the purchaser, at any time
within one (1) year from the date of the registration of the certificate of sale, by paying the
purchaser the amount of his purchase, with one per centum per month interest thereon in addition, up to
the time of redemption, together with the amount of any assessments or taxes which the purchaser may
have paid thereon after purchase, and interest on such last named amount at the same rate; and if the
purchaser be also a creditor having a prior lien to that of the redemptioner, other than the judgment under
which such purchase was made, the amount of such other lien, with interest.

Property so redeemed may again be redeemed within sixty (60) days after the last redemption upon
payment of the sum paid on the last redemption, with two per centum thereon in addition, and the amount
of any assessments or taxes which the last redemptioner may have paid thereon after redemption by him,
with interest on such last-named amount, and in addition, the amount of any liens held by said last
redemptioner prior to his own, with interest. The property may be again, and as often as a redemptioner is
so disposed, redeemed from any previous redemptioner within sixty (60) days after the last redemption, on
paying the sum paid on the last previous redemption, with two per centum thereon in addition, and the
amounts of any assessments or taxes which the last previous redemptioner paid after the redemption
thereon, with interest thereon, and the amount of any liens held by the last redemptioner prior to his own,
with interest.

Written notice of any redemption must be given to the officer who made the sale and a duplicate filed
with the registry of deeds of the place, and if any assessments or taxes are paid by the redemptioner or if
he has or acquires any lien other than that upon which the redemption was made, notice thereof must in
like manner be given to the officer and filed with the registry of deeds; if such notice be not filed, the
property may be redeemed without paying such assessments, taxes, or liens. (30a)” (Emphasis supplied).

Accordingly, the mortgagor or his successor-in-interest must redeem the foreclosed

property within one year from the registration of the sale with the Register of Deeds in order to
avoid the title from consolidating in the purchaser. By failing to redeem thuswise, the mortgagor
loses all interest over the foreclosed property.38 The purchaser, who has a right to possession that
extends beyond the expiration of the redemption period, becomes the absolute owner of the
property when no redemption is made,39 that it is no longer necessary for the purchaser to file the
bond required under Section 7 of Act No. 3135, as amended, considering that the possession of the
land becomes his absolute right as the land’s confirmed owner.40 The consolidation of ownership in
the purchaser’s name and the issuance to him of a new TCT then entitles him to demand possession
of the property at any time, and the issuance of a writ of possession to him becomes a matter of
right upon the consolidation of title in his name.

The court can neither halt nor hesitate to issue the writ of possession. It cannot
exercise any discretion to determine whether or not to issue the writ, for the issuance of the writ to
the purchaser in an extrajudicial foreclosure sale becomes a ministerial function.41 Verily, a
marked distinction exists between a discretionary act and a ministerial one. A purely ministerial
act or duty is one that an officer or tribunal performs in a given state of facts, in a prescribed
manner, in obedience to the mandate of a legal authority, without regard to or the exercise of his
own judgment upon the propriety or impropriety of the act done. If the law imposes a duty upon a
public officer and gives him the right to decide how or when the duty shall be performed, such duty
is discretionary, not ministerial. The duty is ministerial only when its discharge requires neither
the exercise of official discretion nor the exercise of judgment.42

The proceeding upon an application for a writ of possession is ex parte and summary in nature,
brought for the benefit of one party only and without notice being sent by the court to any person
adverse in interest. The relief is granted even without giving an opportunity to be heard to the
person against whom the relief is sought.43 Its nature as an ex parte petition under Act No. 3135,
48

as amended, renders the application for the issuance of a writ of possession a non-litigious
Page

proceeding.44
 It is clear from the foregoing that a non-redeemingmortgagor like the petitioner had no more
right to challenge the issuance of the writ of execution cum writ of possession upon the ex
parte application of GSIS. He could not also impugn anymore the extrajudicial foreclosure, and
could not undo the consolidation in GSIS of the ownership of the properties covered by TCT No.
284272-R and TCT No. 284273-R, which consolidation was already irreversible. Hence, his moves
against the writ of execution cum writ of possession were tainted by bad faith, for he was only too
aware, being his own lawyer, of the dire consequences of his non-redemption within the period
provided by law for that purpose.

III
Dismissal of Petitioner’s Motion for Indirect Contempt Was Proper and In Accord
with the Rules of Court
The petitioner insists that the RTC gravely erred in dismissing his charges for indirect contempt
against GSIS, et al.; and that the CA should have consequently granted his petition for certiorari.
The petitioner’s insistence is plainly unwarranted.

First of all, Section 4, Rule 71, 1997 Rules of Civil Procedure, provides as follows:
“Section 4. How proceedings commenced.—Proceedings for indirect contempt may be initiated motu
proprio by the court against which the contempt was committed by an order or any other formal charge
requiring the respondent to show cause why he should not be punished for contempt.

In all other cases, charges for indirect contempt shall be commenced by a verified petition
with supporting particulars and certified true copies of documents or papers involved therein,
and upon full compliance with the requirements for filing initiatory pleadings for civil actions
in the court concerned. If the contempt charges arose out of or are related to a principal action
pending in the court, the petition for contempt shall allege that fact but said petition shall be
docketed, heard and decided separately, unless the court in its discretion orders the
consolidation of the contempt charge and the principal action for joint hearing and decision.
(n)” (Emphasis supplied).

Indeed, a person may be charged with indirect contempt only by either of two alternative ways,
namely: (1) by a verified petition, if initiated by a party; or (2) by an order or any other formal
charge requiring the respondent to show cause why he should not be punished for contempt, if
made by a court against which the contempt is committed. In short, a charge of indirect contempt
must be initiated through a verified petition, unless the charge is directly made by the court
against which the contemptuous act is committed.

Justice Regalado has explained why the requirement of the filing of a verified petition for
contempt is mandatory:45

“1. This new provision clarifies with a regulatory norm the proper procedure for commencing contempt
proceedings. While such proceeding has been classified as a special civil action under the former Rules, the
heterogeneous practice, tolerated by the courts, has been for any party to file a mere motion without paying
any docket or lawful fees therefor and without complying with the requirements for initiatory pleadings,
which is now required in the second paragraph of this amended section. Worse, and as a consequence of
unregulated motions for contempt, said incidents sometimes remain pending for resolution although the
main case has already been decided. There are other undesirable aspects but, at any rate, the same may
now be eliminated by this amendatory procedure.

Henceforth, except for indirect contempt proceedings initiated motu proprio by order of or
a formal charge by the offended court, all charges shall be commenced by a verified petition
with full compliance with the requirements therefor and shall be disposed of in accordance
with the second paragraph of this section.” (Emphasis supplied).

Clearly, the petitioner’s charging GSIS, et al. with indirect contempt by mere motions was not
permitted by the Rules of Court.

And, secondly, even assuming that charges for contempt could be initiated by motion, the
petitioner should have tendered filing fees. The need to tender filing fees derived from the fact that
49

the procedure for indirect contempt under Rule 71, Rules of Court was an independent special civil
action. Yet, the petitioner did not tender and pay filing fees, resulting in the trial court not
Page
acquiring jurisdiction over the action. Truly, the omission to tender filing fees would have also
warranted the dismissal of the charges.

It seems to be indubitable from the foregoing that the petitioner initiated the charges for
indirect contempt without regard to the requisites of the Rules of Courtsimply to vex the adverse
party. He thereby disrespected the orderly administration of justice and committed, yet again, an
abuse of procedures.

IV

Petitioner Was Guilty Of Misconduct As A Lawyer

The CA deemed it unavoidable to observe that the petition for certiorari brought by the
petitioner to the CA was “part of the dilatory tactics of the petitioner to stall the execution of a
final and executory decision in Civil Case No. 7802 which has already been resolved with finality
by no less than the highest tribunal of the land.”46

The observation of the CA deserves our concurrence.

Verily, the petitioner wittingly adopted his aforedescribed worthless and vexatious legal
maneuvers for no other purpose except to delay the full enforcement of the writ of possession,
despite knowing, being himself a lawyer, that as a non-redeeming mortgagor he could no longer
impugn both the extrajudicial foreclosure and the ex parteissuance of the writ of execution cum
writ of possession; and that the enforcement of the duly-issued writ of possession could not be
delayed. He thus deliberately abused court procedures and processes, in order to enable himself to
obstruct and stifle the fair and quick administration of justice in favor of mortgagee and purchaser
GSIS.

His conduct contravened Rule 10.03, Canon 10 of the Code of Professional Responsibility, by
which he was enjoined as a lawyer to “observe the rules of procedure and xxx not [to] misuse them
to defeat the ends of justice.” By his dilatory moves, he further breached and dishonored his
Lawyer’s Oath, particularly:47
“xxx I will not wittingly or willingly promote or sue any groundless, false or unlawful suit, nor give aid
nor consent to the same; I will delay no man for money or malice, and will conduct myself as a lawyer
according to the best of my knowledge and discretion with all good fidelity as well to the courts as to my
clients xxx”

We stress that the petitioner’s being the party litigant himself did not give him the license to
resort to dilatory moves. His zeal to defend whatever rights he then believed he had and to promote
his perceived remaining interests in the property already lawfully transferred to GSIS should not
exceed the bounds of the law, for he remained at all times an officer of the Court burdened to
conduct himself “with all good fidelity as well to the courts as to [his] clients.”48 His true obligation
as a lawyer should not be warped by any misplaced sense of his rights and interests as a litigant,
because he was, above all, bound not to unduly delay a case, not to impede the execution of a
judgment, and not to misuse Court processes.49Consequently, he must be made to account for
his misconduct as a lawyer.

WHEREFORE, we deny the petition for review on certiorari for lack of merit, and affirm the
decision of the Court of Appeals promulgated on March 17, 2003, with the costs of suit to be paid
by the petitioner.
50
Page
 G.R. No. 176518. March 2, 2010.*
THE PARENTS-TEACHERS ASSOCIATION (PTA) OF ST. MATHEW CHRISTIAN ACADEMY,
GREGORIO INALVEZ, JR., ROWENA LAYUG, MALOU MALVAR, MARILOU BARAQUIO,
GARY SINLAO, LUZVIMINDA OCAMPO, MARIFE FERNANDEZ, FERNANDO VICTORIO,
ERNESTO AGANON and RIZALINO MANGLICMOT, represented by their Attorney-in-Fact,
GREGORIO INALVEZ, JR., petitioners, vs. THE METROPOLITAN BANK and TRUST CO.,
respondent.
Remedial Law; Foreclosures; Writs of Possession; As a rule, it is ministerial upon the court to issue a
writ of possession after the foreclosure sale and during the period of redemption; Exception is where it
appears that there is a third party in possession of the property who is claiming a right adverse to that of the
debtor/mortgagor.—As a rule, it is ministerial upon the court to issue a writ of possession after the
foreclosure sale and during the period of redemption. Section 7 of Act No. 3135 explicitly authorizes the
purchaser in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex
parte motion under oath for that purpose “in the registration or cadastral proceedings if the property is
registered, or in special proceedings in the case of property registered under the Mortgage Law” with the
Regional Trial Court of the province or place where the real property or any part thereof is situated, in the
case of mortgages duly registered with the Registry of Deeds. Upon filing of such motion and the approval
of the corresponding bond, the law also directs in express terms the said court to issue the order for a writ
of possession. However, this rule is not without exception. In Barican v. Intermediate Appellate Court, 162
SCRA 358 (1988), we held that the obligation of a court to issue an ex parte writ of possession in favor of
the purchaser in an extrajudicial foreclosure sale ceases to be ministerial once it appears that there is a
third party in possession of the property who is claiming a right adverse to that of the debtor/mortgagor.

Same; Same; Same; The ex parte petition for the issuance of a writ of possession under Section 7 of Act
No. 3135 is not strictly speaking a “judicial process” as contemplated in Article 433 of the Civil Code.—
This ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is not, strictly
speaking, a “judicial process” as contemplated in Article 433 of the Civil Code. As a judicial proceeding for
the enforcement of one’s right of possession as purchaser in a foreclosure sale, it is not an ordinary suit by
which one party “sues another for the enforcement of a wrong or protection of a right, or the prevention or
redress of a wrong.”

Same; Same; Same; Even if the application for the writ of possession was denominated as a “petition,”
it was in substance merely a motion; no verification and certification on non-forum shopping need be
attached to the motion.—It is not necessary to initiate an original action in order for the purchaser at an
extrajudicial foreclosure of real property to acquire possession. Even if the application for the writ of
possession was denominated as a “petition,” it was in substance merely a motion. Indeed, any insignificant
lapse in the certification on non-forum shopping filed by the MBTC did not render the writ irregular. After
all, no verification and certification on non-forum shopping need be attached to the motion.

Same; Same; Same; The nature of the ex parte petition for issuance of possessory writ under Act. No.
3135 to be a non-litigious proceeding and summary in nature.—In Idolor v. Court of Appeals, 450 SCRA 396
(2005), we described the nature of the ex parte petition for issuance of possessory writ under Act No. 3135
to be a non-litigious proceeding and summary in nature. As an ex parte proceeding, it is brought for the
benefit of one party only, and without notice to, or consent by any person adversely interested. It is a
proceeding where the relief is granted without requiring an opportunity for the person against whom the
relief is sought to be heard. It does not matter even if the herein petitioners were not specifically named in
the writ of possession nor notified of such proceedings.

Same; Same; Same; As it is, the law does not require that a petition for a writ of possession may be
granted only after documentary and testimonial evidence shall have been offered to and admitted by the
court.—Here in the present case, we similarly reject petitioners’ contention that the trial court should have
conducted a trial prior to issuing the Order denying their motion to intervene. As it is, the law does not
require that a petition for a writ of possession may be granted only after documentary and testimonial
evidence shall have been offered to and admitted by the court. As long as a verified petition states the facts
sufficient to entitle the petitioner to the relief requested, the court shall issue the writ prayed for. There is
no need for petitioners to offer any documentary or testimonial evidence for the court to grant the petition.

Same; Same; Same; Any question regarding the regularity and validity of the sale (and the consequent
cancellation of the writ) is left to be determined in a subsequent proceeding as outlined in Section 8.—In De
Gracia v. San Jose, 94 Phil. 623 (1954), we held that: x x x the order for a writ of possession issues as a
51

matter of course upon the filing of the proper motion and the approval of the corresponding bond. No
discretion is left to the court. And any question regarding the regularity and validity of the sale (and the
Page

consequent cancellation of the writ) is left to be determined in a subsequent proceeding as outlined in

section 8. Such question is not to be raised as a justification for opposing the issuance of the writ of
possession, since, under the Act, the proceeding for this is ex parte.

Same; Pleadings and Practice; Certification of Non-forum Shopping; Verification; A non-forum

shopping is required only in a complaint or a petition which is an initiatory pleading.—x x x it bears
stressing that a certification on non-forum shopping is required only in a complaint or a petition
which is an initiatory pleading. In this case, the subject petition for the issuance of a writ of possession
filed by private respondent is not an initiatory pleading. Although private respondent denominated
its pleading as a petition, it is more properly a motion. What distinguishes a motion from a petition
or other pleading is not its form or the title given by the party executing it, but its purpose. The purpose of
a motion is not to initiate litigation, but to bring up a matter arising in the progress of the case where the
motion is filed.

Same; Same; Motion for Reconsideration; As a general rule, a motion for reconsideration should precede
recourse to certiorari in order to give the trial court an opportunity to correct the error that it may have
committed; Exceptions.—As a general rule, a motion for reconsideration should precede recourse
to certiorari in order to give the trial court an opportunity to correct the error that it may have committed.
The said rule is not absolute and may be dispensed with in instances where the filing of a motion for
reconsideration would serve no useful purpose, such as when the motion for reconsideration would raise
the same point stated in the motion or where the error is patent for the order is void or where the relief is
extremely urgent, as in cases where execution had already been ordered where the issue raised is one purely
of law.

Same; Same; Equity; Equity is available only in the absence of law and not as its replacement.—While
equity which has been aptly described as “justice outside legality” is applied only in the absence of, and
never against, statutory law or judicial rules of procedure. Positive rules prevail over all abstract arguments
based on equity contra legem. For all its conceded merit, equity is available only in the absence of law and
not as its replacement.

PETITION for review on certiorari of the decision and resolution of the Court of Appeals.

DEL CASTILLO, J.:

As a general rule, the issuance of a writ of possession after the foreclosure sale and during the
period of redemption is ministerial. As an exception, it ceases to be ministerial if there is a third
party holding the property adversely to the judgment debtor.

In this case, we find that petitioners’ right over the foreclosed property is not adverse to that of
the judgment debtor or mortgagor. As such, they cannot seek the quashal or prevent the
implementation of the writ of possession.

Factual Antecedents
The facts of this case as summarized by the Court of Appeals (CA) in its assailed Decision1 dated
November 29, 2006 are as follows:
“Sometime in 2001, the spouses Denivin Ilagan and Josefina Ilagan (spouses Ilagan) applied for and
were granted a loan by the [Metropolitan Bank and Trust Co.] in the amount of x x x (P4,790,000.00)
[secured by] x x x a Real Estate Mortgage over the parcels of land covered by Transfer Certificates of Title
with Nos. 300203, 285299, 278042, 300181, 300184, 300191, 300194, and 300202, respectively.
Upon default, an extrajudicial foreclosure was conducted with [Metropolitan Bank and Trust Co.] being
the highest bidder x x x and for which a Certificate of Sale was issued in its favor.
During the period of redemption, the respondent Bank filed an Ex-Parte Petition for Issuance of a Writ
of Possession docketed as LRC Case No. 6438 by posting x x x the required bond which was subsequently
approved. x x x
[On June 30, 2005], the St. Mathew Christian Academy of Tarlac, Inc. filed a Petition for Injunction with
Prayer for Restraining Order docketed as Special Civil Action No. 9793 against the respondent Bank and
the Provincial Sheriff of Tarlac.
On August 16, 2005, the x x x Judge issued a Joint Decision in LRC Case No. 6438 and Special Civil
Action No. 9793, the contents of which are x x x as follows:
JOINT DECISION
Metropolitan Bank x x x is now entitled to a writ of possession, it being mandatory even during
the period of redemption.
52

The school, St. Mathew Christian [Academy] filed the petition for injunction on the ground that it
cannot be ejected being a third party.
Page
 x x x St. Mathew Christian Academy is practically owned by the mortgagors, spouses Denivin and
Josefina Ilagan. Firstly, the lease to St. Mathew by the Ilagans, as lessor, was for a period of one year
from the execution of the lease contract in 1998. Therefore, the lease should have expired in 1999.
However, since the lease continued after 1999, the lease is now with a definite period, or monthly,
since the payment of lease rental is monthly. (Articles 1670 and 1687, Civil Code). Therefore, the
lease expires at the end of each month.
Secondly, the lease was not registered and annotated at the back of the title, and therefore, not
binding on third persons. (Article 1648, Civil Code)
Thirdly, the spouses are the owners or practically the owners of St. Mathew. Even if it has a
separate personality, nevertheless, “piercing the veil of corporate entity” is resorted to for the spouses
should not be allowed to commit fraud under the separate entity/personality of St. Mathew.
In connection with the allegation of the spouses Ilagans that the mortgage contract contains
provision which is pactum commisorium, the Court does not agree. What is prohibited is the
automatic appropriation without the public sale of the mortgaged properties.
The interest charges may be exorbitant, but it does not of itself cause the nullity of the entire
contract of mortgage.
There is also no violation on the proscription on forum shopping. What is important is that, there
is really no other case between the parties involving the same subject matter.
In fine, St. Mathew is not really a third person. It is bound by the writ of possession issued by this
Court.
WHEREFORE, the writ of possession issued by this Court dated April 22, 2005 is hereby affirmed,
Civil Case No. 9793 is dismissed. No costs.
SO ORDERED.”2

Pending resolution of the motion for reconsideration of the said Joint Decision, herein
petitioners Parents-Teachers Association (PTA) of St. Mathew Christian Academy (SMCA) and
Gregorio Inalvez, Jr., Rowena Layug, Malou Malvar, Marilou Baraquio, Gary Sinlao, Luzviminda
Ocampo, Marife Fernandez, Fernando Victorio, Ernesto Aganon, and Rizalino Manglicmot who
are teachers and students of SMCA, filed a Motion for Leave to file Petition in Intervention 3 in
Special Civil Action No. 9793, which was granted by the trial court in an Order dated November
10, 2005.4 However, in a subsequent Order dated December 7, 2005, the trial court reversed its
earlier Order by ruling that petitioners’ intervention would have no bearing on the issuance and
implementation of the writ of possession. Thus, it directed that the writ be implemented by placing
respondent Metropolitan Bank and Trust Company (MBTC) in physical possession of the
property.5

Without filing a motion for reconsideration, petitioners assailed the trial court’s Order through
a Petition for Certiorari and Prohibition before the CA. However, said petition was dismissed by
the CA for lack of merit in its assailed Decision dated November 29, 2006. It held thus:
“Considering that in this case the writ of possession had already been issued x x x petitioners’ remedy
was to file x x x a petition that the sale be set aside and the writ of possession cancelled. Instead, petitioners
filed the instant Petition for Certiorari.
Moreover, no motion for reconsideration of the said Order directing the issuance of a writ of possession
was filed neither was there any motion for reconsideration of the assailed Order of 7 December 2005 prior
to the institution of the instant Petition for Certiorari to afford the respondent Court an opportunity to
correct its alleged error. The rule is that certiorari as a special civil action will not lie unless a motion for
reconsideration is filed before the respondent tribunal to allow it to correct its imputed error. While there
are exceptions to the rule, none has been invoked by petitioners.
WHEREFORE, premises considered, the instant Petition is hereby DISMISSED for lack of merit.
SO ORDERED.”6

Petitioners filed a Motion for Reconsideration but the motion was denied in a Resolution dated
January 29, 2007.
Hence, petitioners filed this Petition for Review on Certiorari.

Issues
1. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR WHEN
IT FAILED AND REFUSED TO CONSIDER THE GROUNDS RELIED UPON IN THE
PETITION BEFORE IT WHEN THE SAME ARE CLEARLY MERITORIOUS AND ARE
BASED ON THE LAW AND JUSTICE;
53

2. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR WHEN

Page

IT FAILED AND REFUSED TO CONSIDER THAT THE REMEDY AVAILABLE TO

 HEREIN PETITIONERS IS THE SPECIAL CIVIL ACTION OF CERTIORARI AND NOT
A PETITION TO SET ASIDE THE FORECLOSURE SALE IN LRC CASE No. 6438;
3. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR IN
RULING THAT A MOTION FOR RECONSIDERATION IS STILL NEEDED BEFORE
THE PETITIONERS COULD FILE A SPECIAL CIVIL ACTION OF CERTIORARI; and
4. THE COURT OF APPEALS COMMITTED A CLEAR AND REVERSIBLE ERROR IN NOT
HOLDING THAT CONSIDERATIONS OF JUSTICE AND EQUITY, AND NOT
TECHNICALITY, SHOULD BE THE BASES FOR THE RESOLUTION OF THE
PETITION BEFORE IT.7

Our Ruling

The petition is bereft of merit.

Petitioners are not “Third Parties” against whom the writ of possession cannot be issued and
implemented.

As a rule, it is ministerial upon the court to issue a writ of possession after the foreclosure sale
and during the period of redemption.8 Section 7 of Act No. 3135 explicitly authorizes the purchaser
in a foreclosure sale to apply for a writ of possession during the redemption period by filing an ex
parte motion under oath for that purpose “in the registration or cadastral proceedings if the
property is registered, or in special proceedings in the case of property registered under the
Mortgage Law” with the Regional Trial Court of the province or place where the real property or
any part thereof is situated, in the case of mortgages duly registered with the Registry of Deeds.
Upon filing of such motion and the approval of the corresponding bond, the law also directs in
express terms the said court to issue the order for a writ of possession.9However, this rule is not
without exception. In Barican v. Intermediate Appellate Court,10 we held that the obligation of a
court to issue an ex parte writ of possession in favor of the purchaser in an extrajudicial foreclosure
sale ceases to be ministerial once it appears that there is a third party in possession of the property
who is claiming a right adverse to that of the debtor/mortgagor. This ruling was reiterated
in Policarpio v. Active Bank11where we held that:
“Ordinarily, a purchaser of property in an extrajudicial foreclosure sale is entitled to possession of the
property. Thus, whenever the purchaser prays for a writ of possession, the trial court has to issue it as a
matter of course. However, the obligation of the trial court to issue a writ of possession ceases to be ministerial
once it appears that there is a third party in possession of the property claiming a right adverse to that
of the debtor/mortgagor. Where such third party exists, the trial court should conduct a hearing to
determine the nature of his adverse possession.” (Emphasis supplied)

In this case, we find that petitioners cannot be considered as third parties because they are not
claiming a right adverse to the judgment debtor. Petitioner-teachers and students did not claim
ownership of the properties, but merely averred actual “physical possession of the subject school
premises.”12 Petitioner-teachers’ possession of the said premises was based on the employment
contracts they have with the school. As regards the petitioner-students, Alcuaz v. Philippine
School of Business Administration13and Non v. Dames II14 characterized the school-student
relationship as contractual in nature. As such, it would be specious to conclude that the teachers
and students hold the subject premises independent of or adverse to SMCA. In fact, their interest
over the school premises is necessarily inferior to that of the school. Besides, their contracts are
with the school and do not attach to the school premises. Moreover, the foreclosure of the current
school premises does not prevent the SMCA from continuing its operations elsewhere.

At this point, it is relevant to note that in the Joint Decision dated August 16, 2005, the trial
court found that SMCA was not a third party and was therefore bound by the said writ of
possession.15 Consequently, it affirmed the issuance of the writ of possession.

MBTC thus correctly argued that petitioners did not have superior rights to that of SMCA over
the subject property because their supposed possession of the same emanated only from the latter.
Since petitioners’ possession of the subject school premises stemmed from their employment or
enrollment contracts with the school, as the case may be, necessarily, their right to possess the
subject school premises cannot be adverse to that of the school and of its owners. As such, the
54

petitioners cannot be deemed “third parties” as contemplated in Act No. 3135, as amended.
Page
The lack of authority to sign the certificate
of non-forum shopping attached to the
Petition for Issuance of Writ of Possession
was an insignificant lapse.
Petitioners further claim that the lack of authority to sign the certificate on non-forum shopping
attached to the Petition for the Issuance of the Writ of Possession rendered the same worthless
and should be deemed as non-existent.16 MBTC asserts otherwise, citing Spouses Arquiza v. Court
of Appeals17 where we held that an application for a writ of possession is a mere incident in the
registration proceeding which is in substance merely a motion,18 and therefore does not require
such a certification.
Petitioners’ contention lacks basis. In Green Asia Construction and Development Corporation v.
Court of Appeals,19 where the issue of validity of the Certificate of Non-Forum Shopping was
questioned in an application for the issuance of a Writ of Possession, we held that:
“x x x it bears stressing that a certification on non-forum shopping is required only in a
complaint or a petition which is an initiatory pleading. In this case, the subject petition for the
issuance of a writ of possession filed by private respondent is not an initiatory pleading. Although private
respondent denominated its pleading as a petition, it is more properly a motion. What
distinguishes a motion from a petition or other pleading is not its form or the title given by the party
executing it, but its purpose. The purpose of a motion is not to initiate litigation, but to bring up a matter
arising in the progress of the case where the motion is filed.”20 (Emphasis supplied)

It is not necessary to initiate an original action in order for the purchaser at an extrajudicial
foreclosure of real property to acquire possession.21 Even if the application for the writ of possession
was denominated as a “petition”, it was in substance merely a motion.22 Indeed, any insignificant
lapse in the certification on non-forum shopping filed by the MBTC did not render the writ
irregular. After all, no verification and certification on non-forum shopping need be attached to the
motion.23
Hence, it is immaterial that the certification on non-forum shopping in the MBTC’s petition was
signed by its branch head. Such inconsequential oversight did not render the said petition defective
in form.

The trial court’s Order did not violate

the petitioner-students’ right to quality
education and academic freedom.
We disagree with petitioners’ assertion that the students’ right to quality education and
academic freedom was violated. The constitutional mandate to protect and promote the right of all
citizens to quality education at all levels24 is directed to the State and not to the school.25 On this
basis, the petitioner-students cannot prevent the MBTC from acquiring possession of the school
premises by virtue of a validly issued writ of possession.

There is likewise no violation of the so-called academic freedom. Article XIV, Section 5(2) of the
Constitution mandates “that academic freedom shall be enjoyed in all institutions of higher
learning.” Academic freedom did not go beyond the concept of freedom of intellectual
inquiry,26which includes the freedom of professionally qualified persons to inquire, discover,
publish and teach the truth as they see it in the field of their competence subject to no control or
authority except of rational methods by which truths and conclusions are sought and established
in these disciplines. It also pertains to the right of the school or college to decide for itself, its aims
and objectives, and how best to attain them—the grant being given to institutions of higher
learning—free from outside coercion or interference save possibly when the overriding public
welfare calls for some restraint.27 In Garcia v. The Faculty Admission Committee, Loyola School of
Theology,28 we held that:
“[I]t is to be noted that the reference is to the ‘institutions of higher learning’ as the recipients of this
boon. It would follow then that the school or college itself is possessed of such a right. It decides for itself
its aims and objectives and how best to attain them. It is free from outside coercion or interference save
possibly when the overriding public welfare calls for some restraint. It has a wide sphere of autonomy
certainly extending to the choice of students. This constitutional provision is not to be construed in a
niggardly manner or in a grudging fashion. That would be to frustrate its purpose, nullify its intent. x x x
It is the business of a university to provide that atmosphere which is most conducive to speculation,
55

experiment and creation. It is an atmosphere in which there prevail the ‘four essential freedoms’ of a
Page
university—to determine for itself on academic grounds who may teach, what may be taught, how it shall
be taught, and who may be admitted to study.”

In this case, except for their bare allegation that “if the school will be ejected because of the writ
of possession, the students will necessarily be ejected also”29 and “thereby their learning process
and other educational activities shall have been disrupted,”30 petitioners miserably failed to show
the relevance of the right to quality education and academic freedom to their case or how they
were violated by the Order granting the writ of possession to the winning bidder in the
extrajudicial foreclosure sale.

The petitioners were accorded

due process.
The petitioners argue that the court below did not conduct trial for the presentation of evidence
to support its conclusion that the intervention would have no bearing on the issuance and
implementation of the writ of possession,31 thereby depriving them of due process.

Petitioners’ contention is without merit. It is settled that the issuance of a writ of possession is
a ministerial duty of the court.32 The purchaser of the foreclosed property, uponex parte application
and the posting of the required bond, has the right to acquire possession of the foreclosed property
during the 12-month redemption period.33

This ex parte petition for the issuance of a writ of possession under Section 7 of Act No. 3135 is
not, strictly speaking, a “judicial process” as contemplated in Article 43334 of the Civil Code.35 As a
judicial proceeding for the enforcement of one’s right of possession as purchaser in a foreclosure
sale, it is not an ordinary suit by which one party “sues another for the enforcement of a wrong or
protection of a right, or the prevention or redress of a wrong.”36

In Idolor v. Court of Appeals,37 we described the nature of the ex parte petition for issuance of
possessory writ under Act No. 3135 to be a non-litigious proceeding and summary in nature. As
an ex parte proceeding, it is brought for the benefit of one party only, and without notice to, or
consent by any person adversely interested.38 It is a proceeding where the relief is granted without
requiring an opportunity for the person against whom the relief is sought to be heard.39 It does not
matter even if the herein petitioners were not specifically named in the writ of possession nor
notified of such proceedings.40 In Sagarbarria v. Philippine Business Bank,41 we rejected therein
petitioner’s contention that he was denied due process when the trial court issued the writ of
possession without notice.

Here in the present case, we similarly reject petitioners’ contention that the trial court should
have conducted a trial prior to issuing the Order denying their motion to intervene.42 As it is, the
law does not require that a petition for a writ of possession may be granted only after documentary
and testimonial evidence shall have been offered to and admitted by the court. 43 As long as a
verified petition states the facts sufficient to entitle the petitioner to the relief requested, the court
shall issue the writ prayed for. There is no need for petitioners to offer any documentary or
testimonial evidence for the court to grant the petition.44

The proper remedy for the petitioners is a

separate, distinct and independent suit,
provided for under Act No. 3135.
Petitioners assert that Section 8 of Act No. 3135 specifically refers to “the debtor” as the party
who is required to file a petition for the cancellation of the writ of possession in the same proceeding
in which possession was requested.45 As they are not the debtors referred to in the said law,
petitioners argue that the filing of a petition for the cancellation of the writ of possession in the
same proceeding in which possession was requested, does not apply to them. 46 Hence, they allege
that it was improper for the CA to conclude that the Petition for Certiorari was the wrong remedy
in the case where the writ of possession was issued.47

Respondent, on the other hand, avers that certiorari is available only when there is grave abuse
56

of discretion amounting to lack or excess of jurisdiction and there is no appeal, or any plain, speedy
Page

and adequate remedy in the ordinary course of law.48 In the instant case, the respondent argues
that the court merely granted the Writ of Possession in accordance with settled jurisprudence49and
that the remedy of certiorari does not lie because there is an available remedy which is an appeal.50

We hold that the CA correctly held that the proper remedy is a separate, distinct and
independent suit provided for in Section 8 of Act No. 313551 viz.:
“SEC. 8. The debtor may, in the proceedings in which possession was requested, but not later than
thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of
possession canceled, specifying the damages suffered by him, because the mortgage was not violated or the
sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this
petition in accordance with the summary procedure provided for in section one hundred and twelve of Act
Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose
in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties
may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred
and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.”

In De Gracia v. San Jose,52 we held that:

“x x x the order for a writ of possession issues as a matter of course upon the filing of the proper motion
and the approval of the corresponding bond. No discretion is left to the court. And any question
regarding the regularity and validity of the sale (and the consequent cancellation of the writ)
is left to be determined in a subsequent proceeding as outlined in section 8. Such question is
not to be raised as a justification for opposing the issuance of the writ of possession, since,
under the Act, the proceeding for this is ex parte.” (Emphasis supplied)

Since the writ of possession had already been issued in LRC Case No. 6438 per Order dated
November 29, 2005, the proper remedy is an appeal and not a petition for certiorari,53 in accordance
with our ruling in Metropolitan Bank and Trust Company v. Tan54 and Government Service
Insurance System v. Court of Appeals.55 As long as the court acts within its jurisdiction, any alleged
errors committed in the exercise of its discretion will amount to nothing more than mere errors of
judgment, correctable by an appeal if the aggrieved party raised factual and legal issues; or a
petition for review under Rule 45 of the Rules of Court if only questions of law are involved.

As a general rule, a motion for reconsid-

eration must be filed before resort to the
special civil action of certiorari is made.
As a general rule, a motion for reconsideration should precede recourse to certiorari in order to
give the trial court an opportunity to correct the error that it may have committed. The said rule
is not absolute and may be dispensed with in instances where the filing of a motion for
reconsideration would serve no useful purpose, such as when the motion for reconsideration would
raise the same point stated in the motion56 or where the error is patent for the order is void57 or
where the relief is extremely urgent, as in cases where execution had already been ordered where
the issue raised is one purely of law.58

In the case at bar, the petitioners stated in their Petition for Certiorari and Prohibition before
the CA as follows:59
“18. Respondent sheriff and his deputies are now set to implement the said writ of possession and are
now poised to evict the students and teachers from their classrooms, grounds and school facilities;
19. Petitioners did not anymore file a motion for reconsideration of said order x x x and is proceeding
directly to this Honorable Court because the filing of a motion for reconsideration would serve no useful
purpose x x x Besides the relief sought is extremely urgent as the respondent sheriff is set to implement
the questioned orders x x x and the circumstances herein clearly indicate the urgency of judicial
intervention x x x hence, this petition.”

Plainly, the petitioners have the burden to substantiate that their immediate resort to the
appellate court is based on any of the exceptions to the general rule. They have to show the urgent
and compelling reasons for such recourse. The afore-cited allegations of the petitioners in their
petition before the CA did not dispense with the burden of establishing that their case falls under
any of the exceptions to the general rule. Unlike the case of Ronquillo v. Court of Appeals60 cited
by the petitioners, where not only was a writ of execution issued but petitioner’s properties were
already scheduled to be sold at public auction on April 2, 1980 at 10:00 a.m., the herein petitioners
57

failed to show the specificity and imminence of the urgency confronting their immediate recourse
Page

to the appellate court.

 We therefore hold that the CA correctly found the necessity for a prior resort to a motion for
reconsideration prior to the institution of the Petition for Certiorari.

Considerations of equity do not

apply in the instant case.
The petitioners claim that the challenged decision of the CA would show that the petition was
decided on the basis of pure technicality and that the appellate court did not pass upon the merits
of the petition.61 They further assert that considerations of justice and equity and not technicality,
should be the bases for the resolution of the petition.62 MBTC, on the other hand, argues that equity
may not apply if there is applicable law and jurisprudence.In San Luis v. San Luis,63 we expounded
on the concept of justice by holding that:
“More than twenty centuries ago, Justinian defined justice “as the constant and perpetual wish to render
everyone his due.” That wish continues to motivate this Court when it assesses the facts and the law in
every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when
the facts warrant, we interpret the law in a way that will render justice, presuming that it was the intention
of the lawmaker, to begin with, that the law be dispensed with justice.”

While equity which has been aptly described as “justice outside legality” is applied only in the
absence of, and never against, statutory law or judicial rules of procedure. 64 Positive rules prevail
over all abstract arguments based on equity contra legem.65 For all its conceded merit, equity is
available only in the absence of law and not as its replacement.66
In this case, justice demands that we conform to the positive mandate of the law as expressed
in Act No. 3135, as amended. Equity has no application as to do so would be tantamount to
overruling or supplanting the express provisions of the law.

In our Resolution67 dated June 4, 2007, we issued a Temporary Restraining Order enjoining
respondent to desist from implementing the Writ of Possession. We also required petitioners to
post a cash or surety bond in the amount of P50,000.00 within five days from notice, otherwise the
temporary restraining order shall be automatically lifted. The petitioners posted a cash bond in
the amount of P50,000.00 on June 27, 2007 pursuant to our June 4, 2007 Resolution.68

WHEREFORE, premises considered, the Petition for Review on Certiorari is DENIED for lack
of merit. The temporary restraining order heretofore issued is hereby LIFTED and SET ASIDE.
The Decision of the Court of Appeals dated November 29, 2006 and its Resolution dated January
29, 2007 are AFFIRMED.
SO ORDERED.

Petition denied, judgment and resolution affirmed.

Note.—It is ministerial upon the court to issue a writ of possession in favor of a purchaser,
provided that a proper
58
Page
 G.R. No. 111985. June 30, 1994. *

INDUSTRIAL TIMBER CORP. and/or LORENZO TANGSOC, petitioners, vs. NATIONAL

LABOR RELATIONS COMMISSION, CONCORDIA DOS PUEBLOS and LOLITA SANCHEZ,
respondents.
Remedial Law; Judgment; Execution; Rule that when after a judgment has become final and executory,
it can no longer be modified or otherwise disturbed; Exceptions.—It is true that after a judgment has become
final and executory, it can no longer be modified or otherwise disturbed. However, this principle admits of
exceptions, as where facts and circumstances transpire which render its execution impossible or unjust and
it therefore becomes necessary, “in the interest of justice, to direct its modification in order to harmonize
the disposition with the prevailing circumstances.” Applying this exception to the case at bar, we note with
approval the following observations of the Solicitor General: It may be true that the amount of backwages
and other benefits due to the private respondents as recomputed, is not in harmony with the literal import
of the dispositive portion of the decision subject of execution. However, sight must not be lost of the fact
that at the time the recomputation was made in 1992, five (5) years had already elapsed from the time the
Labor Arbiter rendered his Decision on February 26, 1987. Thus, a recomputation was necessary to arrive
at a just and proper determination of the monetary awards due the private respondents.

Same; Civil Procedure; Pleading; Rule that where a pleading is filed by ordinary mail or by private
messengerial service, it is deemed filed on the day it is actually received by the court.—On the issue of the
timeliness of the petitioners’ motion for reconsideration, we find that the NLRC correctly applied the rule
that where a pleading is filed by ordinary mail or by private messengerial service, it is deemed filed on the
day it is actually received by the court, not on the day it was mailed or delivered to the messengerial service.
As this Court held in Benguet Electric Cooperative, Inc. v. NLRC: The established rule is that the date of
delivery of pleadings to a private letter-forwarding agency is not to be considered as the date of filing thereof
in court, and that in such cases, the date of actual receipt by the court, and not the date of delivery to the
private carrier, is deemed the date of filing of that pleading. The 10th day for filing the motion for
reconsideration was June 26, 1993, which fell on a Saturday. The last day for filing would have been the
following business day, June 28, 1993, which was a Monday. The petitioners’ counsel claims he was able to
deliver the pleading to JRS-Butuan on June 26, 1993, but the motion for reconsi-deration reached the
Commission on June 29, 1993, or a day late.

PETITION for certiorari to set aside the resolutions of the National Labor Relations
Commission.

The facts are stated in the opinion of the Court.

CRUZ, J.:

In the earlier case of Industrial Timber Corporation v. NLRC, G.R. No. 83616, this Court affirmed
1

the finding of the NLRC that the petitioners are the employers of private respondents and
remanded the case for a determination of the validity of the quitclaim allegedly signed by the
latter.

In its resolution dated February 3, 1992, the NLRC affirmed in toto the decision of Labor
2

Arbiter Amado M. Solamo on February 26, 1987, ordering the petitioners to reinstate the private
respondents (complainants therein) without loss of seniority rights and privileges, and to pay them
back wages, ECOLA, 13th month pay, holiday pay, vacation and sick leave pay in the amount of
P24,300 each, moral and exemplary damages of P10,000 each, and attorney’s fees equivalent to
10% of the total award.

In view of the lapse of time since the promulgation of the decision, the NLRC likewise directed
the petitioners to pay the private respondents severance benefits equivalent to one month pay for
every year of service computed from the date of their employment up to the promulgation of the
resolution should reinstatement of the private respondents to their former position be no longer
possible.3

This resolution became final and executory on March 9, 1992, and entry of judgment was made
on March 25, 1992.

The private respondents meanwhile had filed on March 20, 1992, an ex parte motion for
59

issuance of a writ of execution with manifestation that from February 26, 1987, up to the present,
Page
they have not been reinstated and thus were entitled to back salaries for the said period and until
actual reinstatement shall have been made.

Executive Labor Arbiter Benjamin E. Pelaez thereupon directed the Fiscal Examiner of the
Arbitration Branch to compute the actual amount that the private respondents should receive. In
a report dated March 22, 1992, Fiscal Examiner Renrico N. Pacamo found that each of them was
4

entitled to P175,964.84, representing three years back wages, ECOLA under Wage Order No. 6,
13th month pay, legal holiday pay, vacation and sick leave pay and other privileges under the
collective bargaining agreement likewise for a period of three years. In addition, the private
respondents should also be awarded moral and exemplary damages of P10,000 each and attorney’s
fees equivalent to 10% of the total monetary award. In sum, the petitioners were held liable to the
private respondents for the total amount of P387,122.65.

Both the petitioners and the private respondents filed their respective objections to this
computation. Meanwhile, the Executive Labor Arbiter transferred the case to Labor Arbiter Leon
P. Murillo, who thereafter issued an order dated November 19, 1992, concurring with the
5

computation of the Fiscal Examiner Pacamo.

The Commission, on appeal of the computation, only made a slight modification of the amount
of the award and directed the petitioners to pay the private respondents the sum of
P375,795.20. The motion for reconsideration filed by the petitioners through JRS-Butuan, a
6

private letter-forwarding company, reached the NLRC a day late and was denied on August 31,
1993, mainly for tardiness. 7

In this petition now before us, the NLRC is faulted with grave abuse of discretion for merely
modifying the award of damages and denying the motion for reconsideration.

On the first issue, the petitioners submit that the NLRC decision of February 3, 1992, which
affirmed in toto the order of Arbiter Solamo and remanded the case for immediate execution need
not be recomputed because the monetary awards due the private respondents had already been
determined and fixed in the said order. It is argued that to allow the decision of Arbiter Murillo to
prevail and sizably increase the monetary award to the private respondents would in effect allow
an arbiter to change a decision of the Commission that has become final and executory. Arbiter
Murillo’s duty, it is stressed, is limited to the ministerial act of executing the NLRC decision.

We disagree.

It is true that after a judgment has become final and executory, it can no longer be modified or
otherwise disturbed. However, this principle admits of exceptions, as where facts and cir-
cumstances transpire which render its execution impossible or unjust and it therefore becomes
necessary, “in the interest of justice, to direct its modification in order to harmonize the disposition
with the prevailing circumstances.” 8

The general rule is indeed, that once a judgment becomes final and executory, said judgment can no
longer be disturbed, altered or modified. That principle, however, admits of exceptions as in cases where,
because of supervening events, it becomes imperative, in the higher interest of justice, to direct its
modification in order to harmonize the disposition with the prevailing circumstances(Seavan Carrier Inc.
vs. GTI Sportswear Corp., 137 SCRA 580) or whenever it is necessary to accomplish the aims of
justice (Pascual vs. Tan, 85 Phil. 164; Central Textile Mills vs. United Textile Workers Union, 94 SCRA
883). In the case at bar, the modification of the judgment, rendered by the Labor Arbiter on 4 May 1993, is
warranted by the fact that the Bank had been placed under liquidation thereby permanently foreclosing
the possibility for the Bank to resume its business. Reinstatement of Galindez, as Cashier, therefore was
rendered inappropriate considering the Bank’s eventual closure. (Emphasis supplied). 9

Applying this exception to the case at bar, we note with approval the following observations of
the Solicitor General: 10

It may be true that the amount of backwages and other benefits due to the private respondents as
recomputed, is not in harmony with the literal import of the dispositive portion of the decision subject of
60

execution. However, sight must not be lost of the fact that at the time the recomputation was made
Page

in 1992, five (5) years had already elapsed from the time the Labor Arbiter rendered his Decision on
February 26, 1987. Thus, a recomputation was necessary to arrive at a just and proper determination of
the monetary awards due the private respondents.

Indeed, the back wages and other benefits awarded by Arbiter Solamo to each of the private
respondents in the amount of P24,300.00 correspond merely to the period between their illegal
dismissal on April 26, 1986, up to the time of the rendition of the decision on February 26, 1987.
There is no dispute that from April 26, 1986, to this date, the private respondents have not been
reinstated nor has payment of the monetary awards decreed by the NLRC been made to them.

A similar action was taken in the recent case of Sampaguita Garments Corporation v.
NLRC, where this Court upheld the nullification of a decision of the NLRC ordering the
11

reinstatement of an employee after her conviction of the same offense of which she was absolved
in the administrative case.

On the issue of the timeliness of the petitioners’ motion for reconsideration, we find that the
NLRC correctly applied the rule that where a pleading is filed by ordinary mail or by private
messengerial service, it is deemed filed on the day it is actually received by the court, not on the
day it was mailed or delivered to the messengerial service.

As this Court held in Benguet Electric Cooperative, Inc. v. NLRC: 12

The established rule is that the date of delivery of pleadings to a private letter-forwarding agency is not to
be considered as the date of filing thereof in court, and that in such cases, the date of actual receipt by the
court, and not the date of delivery to the private carrier, is deemed the date of filing of that pleading.

The 10th day for filing the motion for reconsideration was June 26, 1993, which fell on a Saturday.
The last day for filing would have been the following business day, June 28, 1993, which was a
Monday. The petitioners’ counsel claims he was able to deliver the pleading to JRS-Butuan on
June 26, 1993, but the motion for reconsideration reached the Commission on June 29, 1993, or a
day late.

At any rate, the respondent Commission noted that the motion contained no substantial
matters to warrant the reconsideration sought and could have been denied just the same on that
ground.

WHEREFORE, the petition is DISMISSED. The resolutions of the respondent NLRC dated May
31, 1993, and August 31, 1993, are AFFIRMED, with costs against the petitioners. It is so ordered.

Petition dismissed; Questioned resolutions affirmed.

Notes.—Where the writ of execution is not in harmony with and exceeds the judgment that
gives it life, the writ has no validity (Christian Literature Crusade vs. National Labor Relations
Commission, 171 SCRA 712).
The National Labor Relations Commission is authorized to look into the correctness of the
execution of the decision and to consider supervening events that affect such execution (Abbott vs.
National Labor Relations Commission, 145 SCRA 206).
61
Page