PACITA VIRAY, PETITIONER, VS. COURT OF APPEALS AND  JOHNSON CHUA, RESPONDENTS.

Viray versus Court of Appeals

The Case

This is a petition for review brought by Pacita Viray against the Court of Appeals and Johnson Chua, arising from a dispute over the amendment of a writ of execution. The case matters because it draws the line between the judicial act of awarding execution and the ministerial act of issuing the writ, and it settles that the Clerk of Court cannot, on his or her own initiative, amend a writ of execution to change the amount to be satisfied. It is a staple on the powers of the clerk of court and on the rights of a purchaser who relies on the face of a notice of levy.

Procedural History

In the Regional Trial Court of Dagupan City, Pacita Viray and the spouses Hilarion and Gliceria Pinlac entered into a compromise agreement, which the trial court approved. When the spouses defaulted, Viray moved for execution and the court granted the motion for the amount of 57,500 pesos. A writ of execution was issued by the Clerk of Court for that amount. Later, upon Viray's letter, the Clerk of Court issued an amended writ increasing the amount to 157,500 pesos without any prior order from the court.

Johnson Chua, who had bought the levied property, filed a complaint for injunction with a prayer for a restraining order, and later amended his complaint to seek a declaration of nullity of the auction sale plus damages. The trial court rendered judgment in favor of Chua, declaring void the amended writ of execution, the notice of sale at public auction, and the sheriff's certificate of sale. It directed the Register of Deeds to cancel the registration of the notice of levy and the certificate of sale, ordered the bank to pay Viray the consigned amount of 57,500 pesos, and dismissed her counterclaim. The Court of Appeals affirmed the trial court, adding that the deed of sale between the Pinlac spouses and Chua was not simulated and that bad faith could not be imputed to Chua. The appellate court denied Viray's motion for reconsideration. The case reached the Supreme Court by petition for review.

Facts

Pacita Viray obtained a compromise agreement against the spouses Pinlac, who bound themselves to pay their indebtedness of 160,000 pesos in eighty equal monthly installments of 2,000 pesos each, with the condition that failure to pay two installments would render the outstanding amount due and payable. The agreement was approved by the trial court. Meanwhile, a parcel of land owned by the Pinlac spouses and mortgaged with the Social Security System was sold at public auction after foreclosure for non-payment of amortizations. On 14 April 1989 the spouses redeemed the property and sold it a few days later to Johnson Chua.

On 4 May 1989, for failure of the Pinlac spouses to pay two installments, Viray filed a motion for the issuance of a writ of execution, demanding execution in the amount of 57,500 pesos as unpaid balance. The motion was granted, and on 22 May 1989 the Clerk of Court issued a writ of execution for 57,500 pesos. Three days later the Deputy Sheriff annotated the notice of levy on the transfer certificate of title still in the name of the Pinlac spouses.

In a letter dated 9 June 1989, Viray requested the Clerk of Court to amend the writ by changing the amount, explaining that the entire amount due was erroneously stated as 57,500 pesos when the correct amount was 157,500 pesos. On 13 June 1989 the Clerk of Court, without a prior order from the court, granted the request and issued an amended writ increasing the amount to 157,500 pesos. On the same day Chua registered the deeds of redemption and sale, and a new title was issued in his name. The new title contained the notice of levy, which did not specify the amount to be levied. Upon verification from the Sheriff's notice of levy that the amount due was 57,500 pesos, Chua tendered that amount to the Clerk of Court, but the tender was rejected on the ground that the writ and the notice of levy had been amended to 157,500 pesos.

A notice of sale at public auction based on the amended writ was published and the sale set on 24 July 1989. On the day of the auction, Chua filed a complaint for injunction, but the auction proceeded with Viray as the highest bidder, and a certificate of sale was issued in her favor. During trial, Chua consigned the amount of 57,500 pesos, which the trial court approved and which was deposited with the bank.

Issues

• Whether or not respondent Johnson Chua had knowledge of the actual amount to be executed before he registered the deeds of redemption and sale.
• Whether or not Chua was a buyer in bad faith.
• Whether or not the Clerk of Court had the authority to amend a purely clerical error in the writ of execution.

Applicable Provisions

Rule 136, Section 4 of the Rules of Court, as cited in the decision, provides:

The clerk of court may, under the direction of the court or judge, make out and sign all writs and processes issuing from the court.

This provision bears on the case because it confirms that the clerk's act of issuing writs is ministerial and must be done under the direction of the court, not on the clerk's own initiative.

Ruling

On the first issue, the Court held that Chua was not mandated to dig deep into the records of the civil case to ascertain the amount subject of the notice of levy, for he had every right to rely on the amount stated in the notice itself, which was 57,500 pesos. Even assuming that Viray had informed him of the correct outstanding balance, this did not overrule the amount stated in the notice of levy, precisely because it was this amount ordered by the Clerk of Court for levy as directed by the trial court which approved the motion for execution. The Court reiterated that a purchaser is not required to explore beyond what the record in the Registry indicates on its face, in quest of any hidden defect or inchoate right which may subsequently defeat his right thereto.

On the second issue, the Court was unpersuaded that Chua was a buyer in bad faith or that the sale was simulated. It agreed with the appellate court's observation that Chua did not take immediate possession because he wanted the title to be clean or settled first, and that at the time the deed of sale was executed the title was in the possession of the Social Security System, so he could not register the deed and acquire a new title without presenting the owner's copy of the title.

On the third issue, the Court distinguished the issuance of an execution from the awarding of an execution. The awarding of execution is a judicial act, while the issuing of the writ is a ministerial act that can be performed by the clerk of court. The Court held that the order of the trial court granting the motion was the foundation of the writ and bestowed vitality to it, and that the order was unambiguous. Before the Clerk of Court can amend the writ, the order of the court granting its issuance should first be amended. The Court quoted the principle that a writ of execution should conform strictly with the very essential particulars of the promulgated judgment, or in this case, with the order granting execution. The amended writ for 157,500 pesos was void on two grounds: first, it went beyond the order granting execution for 57,500 pesos; and second, the Clerk of Court was not clothed with authority to issue the amended writ. By amending the writ on her own will, the Clerk of Court clearly usurped a judicial function.

The Court also noted that it was Viray's fault, if not negligence, which generated the controversy, since her motion prayed for a lesser amount and she compounded her woes by simply sending a letter to the Clerk of Court rather than directing the matter to the attention of the judge by way of a motion for amendment of the order and the writ. Nonetheless, the Court declared that Viray was not precluded from exercising whatever rights she may have under the law and from undertaking the appropriate step for the enforcement of such rights or the execution of the compromise judgment in her favor against the Pinlac spouses.

Doctrine

The awarding of execution is a judicial act that devolves upon the judge, while the issuing of the writ of execution is a ministerial act that may be performed by the clerk of court under the direction of the court. A writ of execution must conform strictly with the very essential particulars of the promulgated judgment, or with the order granting execution. The Clerk of Court has no authority to amend a writ of execution to change the amount to be satisfied without a prior order from the court amending the order granting execution; to do so is to usurp a judicial function, and the amended writ is void. A purchaser at a levy is not required to explore beyond what the record in the Registry indicates on its face, and may rely on the amount stated in the notice of levy.

Disposition

The petition was denied, and the decision of the Court of Appeals sustaining that of the Regional Trial Court of Dagupan City was affirmed, with the consequence that the amended writ of execution, the notice of sale at public auction, and the sheriff's certificate of sale were declared void, the registrations were ordered cancelled, and the consigned amount of 57,500 pesos was ordered released to Viray.

Remember This

The single line worth memorizing is that the Clerk of Court cannot amend a writ of execution on his or her own initiative, because the awarding of execution is judicial and only the judge can amend the order that is the foundation of the writ. Examiners like to use this case to test the distinction between the judicial act of awarding execution and the ministerial act of issuing the writ, and to test the rights of a purchaser who relies on the face of a notice of levy.