G.R. No. L-3619. October 29, 1951
BERNARDO TIGLAO, PLAINTIFF AND APPELLEE, VS. ENGRACIO BOTONES, DEFENDANT AND APPELLANT.
PARAS, C.J.:
First Instance of Tarlac in which Bernardo Tiglao was the plaintiff and
Engrado Botones the defendant, judgment was rendered on March 24, 1943,
the dispositive part of which reads gs follows: “El Juzgado, de acuerdo
con dicho convenio, condena al demandado al pago de la canvtidad de
P4,000.00 con los intereses de 12 por ciento al ano desde el 29 de
Noviembre de 1937 hasta su pago completo y se le ordena que deposite
esta cantidad en poder del Escribano dentro del plazo de 90 dias, de lo
contrario se ordenara la ejecucion de la sentencia vendiendo en publica
subasta-los bienes hipotecados, con las costas a cargo del demandado.”
Upon motion of the plaintiff, the Court of First Instance of
Tarlac on July 20, 1943, ordered the issuance of a writ of execution.
Accordingly, on October 9, 1943, the provincial sheriff sold at public
auction the mortgaged properties to the plaintiff as the highest
bidder. On March 7, 1944, the plaintiff filed an ex parte
motion with the Court of First Instance of Tarlac, for the confirmation
of the sale in his favor. On March 22, 1944, the court issued the
following order; “As prayed for in the ‘Motion for confirmation of the
Sheriff’s sale dated October 9, 1943, of lots Nos. 784 and 1146 of the
cadastral survey of Concepcion, executed by the Provincial Sheriff of
Tarlac in favor of Bernardo Tiglao, pursuant to the order of execution
entered herein, the said sale is hereby APPROVED.'”
On May 7, 1948, the plaintiff filed with the Court of First
Instance of Tarlac a motion for the issuance of a writ of possession.
The defendant filed an opposition alleging (1) that the judgment of
March 24, 1943, is null and void, because the defendant’s former
counsel had no special authority to settle the case in the manner
stated in said judgment, and (2) that the sheriff’s sale was not
legally confirmed, because the defendant was not given notice of the
motion for confirmation or its hearing. On June 30, 1948, the court
granted plaintiffs-motion for the issuance of a writ of possession. The
defendant filed on July 7, 1948, a motion for reconsideration and under
date of September 9, 1948, a motion Invoking moratorium under Republic
Act No. 342 and praying that all proceedings be suspended. In its order
of October 12, 1948, the Court of First Instance of Tarlac denied the
motion for reconsideration. The defendant appealed.
Appellant’s first contention is that the trial court erred in
sustaining the order confirming the sheriff’s sale and in issuing the
corresponding writ of possession in favor of the appellee. Under
section 3 of Rule 70 of the Rules of Court, the sale of mortgaged
property “when confirmed by an order of the court * * * shall operate
to divest the rights:of all the parties to the action and to vest their
rights in the purchaser, subject to such rights of redemption as may be
allowed by law”. The effect of confirmation was more elaborately
explained in the case of Raymundo vs. Sunico, 25 Phil. 365,
368-369, as follows: “As the title to mortgaged real property does not
vest in the purchaser until after the confirmation of the sale, he has,
prior to that time, no right to the possession of such property, and no
legal cause of complaint against the defendants, who.remain in
possession, exercising the rights of ownership. On the other hand, the
mortgagors have no means, until after the confirmation, of compelling
the purchaser to comply with the terms of the sale. Should the
mortgagors attempt to compel a purchaser to pay in his money, an answer
on the part of the purchaser to the effect that the sale had not been
confirmed would be sufficient. The confirmation operates to divest the
title out of the former owner and to vest it in the purchaser. It is at
this time when the right or title passes, and not before. Sales of
mortgaged real estate should be more strictly scrutinized than ordinary
sales under execution. In the former the title, as we have said, passes
to the purchaser upon confirmation by the court, and the defendant or
debtor has no right to redeem within the statutory period granted in
cases of ordinary execution sales. In some of the States of the
American Union there are statutes permitting the mortgagor to redeem
after the foreclosure sale has been confirmed. There is no such
privilege extended to him by statute in the Philippine Islands. The
right of the mortgagor and those claiming under him to redeem from the
mortgage is extinguished by the foreclosure when the same has been
properly made. But, up to the time of confirmation the title remains in the mortgagor.” In said case this Court already held that a hearing “is
a very essential part of those proceedings because the hearing gives
the interested parties an opportunity to lay before the court their
reasons why the sale should or should not be confirmed, and it is the
result of this hearing which divests the title if the sale is
confirmed.”
In the case of Grimalt vs. Velazquez, 36 Phil. 936, 938, this Court, relying upon its decision in Raymundo vs.
Sunico, supra, ruled that “in order that a foreclosure sale may be
validly confirmed by the court, it is necessary that a hearing be given
the interested parties at which they may have an opportunity to show
cause why the sale should not be confirmed; that a failure to give
notice is good cause for setting aside the sale.”
In the cases of La Urbana vs. Belando, 54 Phil. 930, and Anderson vs. Reyes, 54 Phil. 944, it was held, following the decision in Grimalt vs.
Velazquez, supra, that after the sale of mortgaged property and before
its confirmation, the court may still grant the judgment debtor an
opportunity to pay the amount of the judgment. In other words, until a
sheriff’s sale is validly confirmed, the judgment debtor may exercise a
right of redemption.
Notice and hearing of a motion for confirmation are therefore
essential to the validity of the order of confirmation, not only to
enable the interested parties to resist the motion but also to inform
them of the time when their right of redemption is cut off.
It is argued for the appellee that because section 3 of Rule 70
does not carry the last part of section 257 of Act 190 to the effect
that “should the court decline to confirm the sale, for good cause
shown, and should set it aside, it shall order a resale in accordance
with law,” the cases hereinabove cited are no longer efficacious. We
disagree. The fact that the present rules still require confirmation of
the sheriff’s sale implies the power of the court to either confirm the
same or not, when asked. And the court may properly exercise its
judgment on the matter only after hearing both parties. Indeed, there
is reason to suppose that the omitted provision is superfluous.
The case of Commonwealth of the Philippines vs. Ching Yap, 70 Phil. 116, citing So Chu vs. Nepomuceno, 29 Phil. 208, Jaranillo vs. Jacinto, 43 Phil. 588, Price vs. Sontua, 60 Phil. 410, and National Investment Board vs.
Pena, G. H. No. 46448, May 29, 1939, invoked by the appellee, is
obviously not controlling. In said case this Court found that notice of
the motion for confirmation was sent to the judgment debtors at their
address of record and when said notice was returned to the judgment
creditor, the latter filed it with the clerk of court in accordance
with Rule 20 of the Rules of Courts of First Instance. What the
creditor did was held sufficient, because if the debtors failed to
receive the notice sent to their address appearing in the record, it
was their fault. The statement in said case, therefore, that lack of
notice does not deprive the court of its jurisdiction to approve a
sheriff’s sale, was purely an obiter dictum. Moreover, the cases of So Chu vs. Nepomuceno, Jaranillo vs. Jacinto, Price vs. Sontua, and National Investment Board vs. Pena, did not involve situations in which confirmation of sheriff’s sales was upheld although there was no notice or hearing.
In the more recent case of Somera vs. Navarro, February
11, 1946, 42 O. G. 2106, it was contended that no 3-day notice of the
motion for confirmation was given, because the hearing of the motion
was set for July 26, 1941, the notice was mailed to the appellants on
July 23 and received by them on July, 24. It appears, however, that at
the hearing on July 26, the appellants were present and at their
instance said hearing was postponed to August 9. Other postponements
were conceded and the mfction was not heard until December 4, 1942.
This Court held: “Resulta evidente, por tanto, que la regla sobre
notificaciones se cumplio substancialmente, y que toda discusion ahora
sobre el particular viene a ser meramente academica, porque, aun
suponiendo que la primera notitficacion haya sido irregular, de ella no
se siguio ningun perjuicio para los apelantes, toda vez que la mocion
no se considero y resolvio sino despuls de varias transferencias, de
los cuales aquellos habian sido debidamente avisados.” We have thus
inferentially recognized the essential need for notice of a motion for
confirmation of a sheriff’s sale, for, on the contrary supposition, we
would have summarily dismissed appellant’s contention and held that
notice and hearing were unnecessary.
In the case at bar, the lower court undoubtedly had acquired
jurisdiction over the foreclosure proceedings but, in confirming the
sheriff’s sale without the essential requisite as to notice of the
motion for confirmation, it exceeded its power, with the result that
the order of confirmation is null and void. As stated by Mr. Justice
Feria in Caluag et al. vs. Pecson et al.,[*]
October 29, 1948, (J. R. No. L-1403, “a wrong, or for that matter a
correct, decision is void, and may be set aside either directly or
collaterally, where the court exceeds its jurisdiction and power in
rendering it.” In Ang Lam vs. Rosillosa,[*] May 22, 1950, G.R. No. L-3595, it was held that “a void judgment may be assailed or impugned
at any time either directly or collaterally, by means of a petition
filed in the same case or by means of a separate action, or by
resisting such judgment in any action or proceeding wherein it is
invoked.” Hence there is no merit in appellee’s contention that the
order of confirmation had become final and cannot be set aside after
the 6-month period provided in Rule 38 of the Rules of Court, within
which re-lief could be asked, had expired.
The second contention of the appellant is that the trial court
erred in not suspending the proceedings because of the Moratorium law
(Republic Act No. 342). This contention is untenable. The foreclosure
judgment had long become final. By his motion for confirmation of the
sheriff’s sale and his motion for a writ of possession, the appellee
sought to recover, not a monetary obligation, but the properties sold
to him at public auction. What was held in Barrozo vs.
Macaraeg, April 25, 1949, G.R. No, L-1282, is decisive against
appellant’s position. “The debt moratorium merely prohibited the
enforcement by action of the debts therein included; and in this case
no one is attempting to force anybody to pay his debt. The judgment
debtor whose property has been sold is not in debt for the-redemption
money. He could not be required by action to redeem. Hence, he is not
entitled to invoice the suspension,”
Wherefore, the order of March 22, 1944, confirming the sheriff’s
sale of the mortgaged properties, being null and void, the order of
June 30, 1948, granting appellee’s motion for the issuance of a writ of
possession is hereby set aside, without prejudice to appellee’s right
to move anew for the confirmation of the sheriff’s sale in his favor,
with due notice and hearing. So ordered, without costs.
Feria, Pablo, Bengzon, Padilla, Tuason, Reyes, Jugo, and Bautista Angelo, JJ., concur.
[*] 82 Phil., 8.
[*] 86 Phil., 447.