ISABEL OCAMPO, PLAINTIFF-APPELLANT, VS. IGNACIO DOMALANTA AND PONCIANO MARTINEZ, IN HIS CAPACITY AS PROVINCIAL SHERIFF OF CAVITE, DEFENDANTS-APPELLEES.

Sole question raised on appeal is this:  Is a court order confirming a sheriff’s sale
upon a judgment in a real estate foreclosure case a bar to a subsequent action
by the judgment debtor to annul the sale upon grounds which were raised in said
foreclosure proceedings?

First, to the background facts. 
A contested case to foreclose a real estate and chattel mortgage [Civil
Case 45778, Court of First Instance of Manila, “Ignacio Domalanta, plaintiff, vs. Isabel O. Vda.
de Chi Chioco, et al., defendants”], resulted in
judgment ordering appellant Isabel O. Vda. de Chi Chioco (now known as Isabel Ocampo)
to pay appellee Ignacio Domalanta
P2,000.00, with 1% interest per month from December 5, 1958 until full payment,
and P500.00 as attorney’s fees, and directing that after failure to pay the
above amounts in ninety days, the properties mortgaged be sold at public
auction, subject to a first mortgage in favor of the Philippine National Bank
in reference to appellant’s land (located in Tanza, Cavite) mortgaged.^[1]

The judgment debt remained unpaid.  The court, on Domalanta’s
motion, issued a writ of execution.  Pursuant
thereto, on May 8, 1962, appellee sheriff sold at
public auction the mortgaged land of 32,558 square meters to the highest
bidder, appellee Ignacio Domalanta,
for P3,537.00.  Domalanta
moved to confirm the sale.  Over
appellant’s objection, the court, on June
2, 1962, confirmed.

After the June 2, 1962 order had become final, appellant started
the present suit (Civil Case N-496 of the Court of First Instance of Cavite, entitled “Isabel Ocampo,
plaintiff, vs. Ignacio Domalanta and Ponciano Martinez, in his capacity as Provincial Sheriff of Cavite, defendants”) to annul the sheriff’s sale.  Grounds: 
Appellant mortgagor was not properly notified of the foreclosure sale;
and the price for which the property was sold was “very much lower than
the actual market value” and shocking to the conscience, and thus
invalid.  Appellee
Domalanta moved to dismiss the complaint below.  His reason, inter alia:  res judicata. 
The court, on November 9, 1962,
dismissed the case “with prejudice and with costs against the
plaintiff.” A move to reconsider was thwarted below in the order of November 21, 1962.  Hence, this appeal.

1. Adverted to earlier is
that the June 2, 1962
order of con­firmation of the sheriff’s sale in the first case – Case 45778 –
was issued over appellant’s opposition. 
That objection projected before the court the very same grounds relied
upon in the complaint herein -the second case – to wit, lack of notice by the
Provincial Sheriff to appellant of the foreclosure sale, and irregularities in
the auction sale and non-conformity thereof to the rules of court.  According to the order of confirmation, the
thrust of appellant’s said objection is that she “was not notified of the sheriff’s sale and that the
price for which the property was sold is
unconscionable.” But these factual allegations, so the same order
of June 2, 1962 stresses, “have not been established by any evidence”, nor
was appellant’s opposition verified. 
Nothing in the record suggests
that after the order of June 2, 1962 in the first case (Civil Case
45778), attempt was ever made by appellant to cure the defects so pointedly
expressed by the court in that order.

2. Law and jurisprudence have formulated the rule that
confirmation of sale of real estate in judicial foreclosure proceedings cuts
off all interests of the mortgagor in the real estate sold and vests them in
the purchaser.  Confirmation retroacts to
the date of the sale.^[2] An order of confirmation in court
foreclosure proceedings is a final order, not merely interlocutory.  The right to appeal therefrom
has long been recognized.^[3]
In fact, it is
the final order from which appeal may be taken in judicial fore­closure
proceedings.^[4]
No appeal was taken.  It follows that said order is final, binding.

3. Not that the disputed order of confirmation may be labelled null and void, as appellant would want it to be.  The presumption that the notice of sale of
real estate in foreclosure proceedings has been given, holds true here.  For, indeed, a legal tenet of long standing
is that official duty presumptively has been regularly per­formed.^[5]
Appellant pleaded such lack of notice. 
Her duty it was to prove it in court. 
She did not.

And if the notice that appellant here complains of is personal
notice to her, she is wrong. 
Because, personal notice is not required by Section 16 of Rule 39 of the
1940 Rules of Court, now Section 18, Rule 39 of the new Rules.  This legal provision was given judicial nod
as early as 1930 in La Urbana vs. Bolando,
54 Phil. 930, 932 -a case of foreclosure of real estate mortgage – where we
pronounced that “[t]he law does not require that such notification be
given personally to the party upon whose property execution is levied.”

Nor was there an averment in the complaint now before us that if
a resale should take place, “the realty would bring a higher price”
thereat, a circumstance “essential to rescind a sale regularly made and
confirmed by a competent court, on the ground of inadequacy of price.”^[6]
The mere averment that the price is unconscionable is nothing more than a
conclusion of law.  The value of such
allegation is
further downgraded by the lack of proof. 
This is one case which epitomizes the fatal distance between allegation
and proof.

4. Properly to be pointed out here is that the dismissal order of
November 9, 1962 now on
appeal, states that the legality of the foreclosure sale questioned in this
action “was an issue that could have been, and was in fact, raised and
litigated in the anterior suit” (Civil Case 45778).  Except for the Provincial Sheriff who is a nominal defendant here, the
parties in the two suits below are the same: 
Isabel Ocampo and Ignacio Domalanta.  Subject matter is the same land.  The judgment and order of confirmation of
that sheriff’s sale in the first suit have both become final.

The first suit is a judicial foreclosure of mortgage; the second,
annulment of the foreclosure sale conducted in the first suit.  A proceeding for judicial foreclosure of
mortgage is an action quasi in rem.  It is based on a personal claim sought to be
enforced against a specific property of a person named party defendant.  And, its purpose is to have the property
seized and sold by court order to the end that the proceeds thereof be applied
to the payment of plaintiff’s claim.^[7]

To be read as controlling here are Sections 44 and 45, Rule 39 of
the old Rules of Court – which is now substantially embodied in Section 49,
Rule 39 of the new Rules of Court, viz:

“SEC. 49. Effect of judgments.  – The effect of a judgment or final order
rendered by a court or judge of the Philippines,
having jurisdiction to pronounce the judgment or order, may be as follows:

(a) In case of a judgment or order against a specific thing, or in
respect to the probate of a will, or the ad­ministration of the estate of a
deceased person, or in respect to the personal, political, or legal condition
or status of a particular person or his relationship to another, the judgment
or order is conclusive upon the title to the thing, the will or administration,
or the condition, status or relationship of the person; however, the probate of
a will or granting of letters of administration shall only be prima facie
evidence of the death of the testator or intestate;

(b) In other cases the judgment or order is, with respect to the
matter directly adjudged or as to any other matter that could have been raised
in relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or special
proceeding, litigating for the same thing and under the same title and in the
same capacity;

(c) In any other litigation between the same parties or their
successors in interest, that only is deemed to have been adjudged in a former
judgment which appears upon its face to have been so adjudged, or which was
actually and necessarily included therein or necessary thereto.”

Paragraph (a) of the foregoing rule is commonly known to speak of
judgments in rem; paragraph (b) is said
to refer to judgments in personam; and
paragraph (c) is the concept understood in law as “conclusiveness of
judgment.”^[8]

Here, the first suit was
an action quasi in rem.  A judgment therein “is conclusive only
between the parties.”^[9] Directly applica­ble is paragraph (b)
above-quoted.  By that provision, the
confirmation order in the foreclosure case is, “with respect to the matter
directly adjudged or as to any other matter
that could have been raised in relation thereto, conclusive between the parties”
and their privies.

As we view this case from
another standpoint, we reach the same result. 
It is true that the cause of action in the first suit is not exactly identical to the cause of action
in the second.  For, the latter merely
challenges the legality of the sheriff’s sale in the first proceeding.  We do say, however, that such legality of sale is an issue which could have been,
and was in fact raised and rejected in the first case.  Thus, coming into play also is paragraph (c)
above-quoted.  Therefore, the question
raised by appellant in the present suit should be “deemed to have been
adjudged in a former judgment which appears upon its face to have been so
adjudged, or which was actually and necessarily in­cluded therein or necessary
thereto.”

It is thus beyond doubt
that the present action is barred by the conclusiveness of judgment in the
anterior suit.^[10] This case must be dismissed.

Conformably to the
foregoing, the lower court’s
order of November 9, 1962 dismissing this case, and the order of November
21, 1962 denying
reconsideration thereof, are hereby affirmed.

Costs against
plaintiff-appellant.

SO ORDERED.

Concepcion, C.J., Reyes, Dizon, Makalintal, Bengzon, Zaldivar, Castro,
Angeles, and Fernando, JJ., concur.

^[1]
The foreclosure action was filed in Manila upon a stipulation in the Deed of Real
Estate and Chattel Mortgage which reads:  
“[P]rovided further that in case of
litigation arising out of this mortgage contract the Court of First Instance of
Manila shall decide the case x x x.

^[2]
Binalbagan Estate, Inc. vs. Gatuslao, 74 Phil. 128, 131; Clemente
vs. H. E. Heacock Co., L-12786, October 29, 1959; Piano vs. Cayanong, L-18603, February 28, 1963.

^[3]
Warner, Barnes & Co., Ltd. vs. Santos, 14 Phil. 446; Raymundo vs. Sunico, 25
Phil. 365; Philippine Sugar Estates Development Co. vs. Camps, 34 Phil.
426, 428.

^[4]
Salazar vs. De Torres, L-13711, May
25, 1960.

^[5]
Section 5 (m), Rule 131, Rules of Court.

^[6]
La Urbana vs. Belando, supra, at pp. 932-933, citing
National Bank vs. Gonzalez, 45 Phil. 693.

^[7]
Banco Español-Filipino vs.
Palanca, 37 Phil. 921, 928.

^[8]
See II Moran, Comments on the Rules of Court, 1963 ed., pp. 320, 331.

^[9]
Banco Español-Filipino vs.
Palanca, supra, at p. 928.

^[10]
Peñaloza vs. Tuason,
22 Phil. 303, 312-315; Tejedor vs. Palet, 61 Phil. 494, 502.