### Facts:
Estanislao Padilla, Jr., the petitioner, and his wife were the registered owners of several real properties in Bago City. The Philippine Producers’ Cooperative Marketing Association, Inc. (respondent) had a monetary claim against Padilla and initiated a collection case on April 24, 1987, at the Regional Trial Court (RTC) of Bacolod City. Padilla did not file an answer, leading to his declaration of default and eventual judgment against him in November 1989. Following this, the three disputed lots were levied and auctioned in 1990, with the respondent becoming the winning bidder. Despite the respondent’s acquisition and recording of sale, Padilla did not redeem the properties within the allotted 12 months, leading the respondent to motion for and receive a writ of possession in 1992.
Years later, in 1995, the respondent moved to direct the Register of Deeds to issue new titles in its name, citing Padilla’s refusal to surrender the original titles as a barrier. This motion was granted by the RTC, which was upheld by the Court of Appeals upon Padilla’s appeal. Padilla then sought review from the Supreme Court, challenging the procedural integrity of the respondent’s motion and citing potential issues of prescription and incorrect adherence to procedural requirements for title cancellation and reissuance.
### Issues:
1. Whether the respondent’s right to petition for the issuance of new titles was barred by prescription.
2. The proper procedure for cancelling an old certificate of title and issuing a new one in the context of an execution sale.
### Court’s Decision:
The Supreme Court ruled in favor of the petitioner, reversing the Court of Appeals and annulling the order of the RTC to issue new titles in the respondent’s name. The Court identified that the respondent’s request for new titles post-redemption period did not prescribe since the execution of the judgment via levy and sale was completed timely. However, the Court also identified that the respondent improperly filed a simple motion for the issuance of new titles instead of initiating a separate cadastral action as outlined by Section 107 of PD 1529. The proper process required petitioning the court to compel the surrender of title or, failing that, the annulment and reissuance of a new title, providing due process to landowners and preventing erroneous conveyance.
### Doctrine:
The Supreme Court reiterated the doctrine that the execution of judgment via levy and sale constitutes the fulfillment of the execution process, but the acquisition of new titles post-execution sale, particularly in cases where the original titles are withheld by the judgment debtor, requires a separate cadastral action rather than a simple motion.
### Class Notes:
– Execution sale and the rights of the purchaser: An execution sale immediately vests title to the purchaser, subject to the judgment debtor’s right of redemption.
– Prescription of action for the issuance of new titles: The petition for the issuance of new titles following an execution sale does not prescribe within five years as it’s part of the execution process and not an independent civil action.
– Proper procedure for title reissuance in execution sales: Section 107 of PD 1529 mandates filing a separate petition, not a mere motion, to address the refusal or inability to surrender original certificates for title reissuance. This ensures due process and prevents fraudulent land conveyance.
### Historical Background:
This case underscores the legal nuances involved in the final stages of property execution sales, particularly the importance of following prescribed legal procedures for transferring title ownership. It highlights the procedural safeguard designed to balance the interests of judgment creditors and debtor’s property rights, as enshrined in the Philippines’ property law framework.
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