AURORA GUIANG, PETITIONER, VS. EVA T. CO, DOING BUSINESS UNDER THE BUSINESS NAME, ETC LENDING INVESTOR, RESPONDENT.

Guiang versus Co

The Case

This is a petition for review brought by Aurora Guiang against Eva T. Co, who does business under the name and style of a lending investor. The petitioner asks the Supreme Court to reverse the Court of Appeals, which had dismissed her special petition seeking to annul the writ of execution and the execution sale of her thirty parcels of land. The case matters because it draws the boundary of the remedy of annulment of judgment under Rule 47 of the Rules of Court: it tells us that a writ of execution is not a final order that may be annulled under that rule, and that irregularities in the levy and sale must first be raised before the very court that issued the writ.

Procedural History

The Regional Trial Court of Santiago, Isabela, Branch 21, rendered judgment in a civil case ordering the petitioner to pay the respondent the principal sum of 64,870 pesos plus 18 percent interest per annum from August 3, 1990 until fully paid, and the costs of suit. That decision became final and executory. On motion of the respondent, the trial court issued a writ of execution, and the deputy sheriff levied thirty parcels of land owned by the petitioner and sold them at public auction to the respondent.

The petitioner then filed a separate complaint before the Regional Trial Court of Santiago City, Branch 35, for redemption of the foreclosed properties, consignation of payment, and damages. That court dismissed the complaint. The petitioner appealed to the Court of Appeals, but because she failed to file her appellant's brief, the Court of Appeals dismissed her appeal, denied her motion for reconsideration, and recorded an entry of judgment.

Later, the petitioner filed with the Court of Appeals a petition captioned as one for annulment of the writ of execution. The Court of Appeals dismissed it on the ground that her remedy was to appeal from the decision of the trial court. It denied her motion for reconsideration, ruling that her failure to avail of the remedies before the trial court was her own fault, so she could not invoke Rule 47. The petitioner then elevated the matter to the Supreme Court by petition for review.

Facts

On September 10, 1992, the trial court in Santiago, Isabela, Branch 21, ordered Aurora Guiang to pay Eva T. Co the sum of 64,870 pesos plus 18 percent interest per annum from August 3, 1990 until fully paid, and the costs. The decision became final and executory. On motion of the respondent, the trial court issued a writ of execution, and Deputy Sheriff David R. Medina levied thirty parcels of land owned by the petitioner. He set the public auction for May 27, 1993 and served the petitioner with the notice of levy and auction sale.

On May 27, 1993, the properties were sold at public auction to the respondent for 308,701 pesos, and the deputy sheriff executed a sheriff's certificate of sale in her favor. The petitioner received a copy of the certificate on August 20, 1993. On September 7, 1994, she filed a complaint for redemption, consignation, and damages, alleging that her account amounted to 112,574 pesos, that she had offered to pay that amount but the respondent and the sheriff rejected her offers, and that she was depositing that amount with the court. That complaint was dismissed.

After the petitioner failed to redeem the properties, the deputy sheriff executed a deed of final sale on August 16, 1995 in favor of the respondent, and the Register of Deeds issued titles in the respondent's name. The petitioner's appeal from the dismissal of her complaint was itself dismissed for failure to file her appellant's brief, and entry of judgment followed. She then filed with the Court of Appeals a petition to annul the writ of execution, alleging that the sheriff violated the rules by levying on and selling all thirty parcels for a lump sum far exceeding the judgment debt, instead of selling only so much as was sufficient and selling several home lots separately.

Issues

• Whether or not the petition filed by the petitioner in the Court of Appeals was a proper petition for annulment of judgment or final order under Rule 47 of the Rules of Court.
• Whether or not the petitioner's remedy to nullify the levy and the sale at public auction, for alleged violations of the rules on execution, lay with the Court of Appeals rather than with the trial court that issued the writ.

Applicable Provisions

Section 1 of Rule 47 of the Rules of Court provides:

Section 1. Coverage. This Rule shall govern the annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner.

This fixes the scope of the remedy: it reaches judgments, final orders, and resolutions, but not a writ of execution, which is why the petitioner's theory fails.

Section 2 of Rule 47 provides:

Section 2. Grounds for annulment. The annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.

The petitioner invoked grave abuse of discretion, but the rule confines annulment to extrinsic fraud and lack of jurisdiction.

Section 15 of Rule 39, as cited by the petitioner, governs the levy and sale of property on execution, requiring that only so much of the property be sold as is amply sufficient to satisfy the judgment and costs. Section 21 of Rule 39, also cited, requires that when the sale is of real property consisting of several home lots, they must be sold separately. These are the irregularities the petitioner attributes to the deputy sheriff.

Ruling

On the first issue, the Court held that the petition was not one for annulment of the writ of execution, whatever its caption. The nature of an action is determined by its material allegations, not by its title or by the relief prayed for. What the petitioner actually attacked was the levy of the thirty parcels, the sale at public auction, the sheriff's certificate of sale, and the final deed of sale. The Court stressed that Rule 47 applies only to a petition to annul a judgment or final order and resolution in civil actions, on the ground of extrinsic fraud or lack of jurisdiction or due process. A final order is one that disposes of the subject matter in its entirety or terminates a proceeding, leaving nothing to be done but execution. A writ of execution is not a final order; it is a judicial process to enforce a final order or judgment against the losing party. Hence, the rule does not apply to an action to annul the levy and sale or the certificate of sale.

On the second issue, the Court held that the remedy to nullify the levy and sale for violations of the rules on execution was a motion before the trial court that issued the writ, not a petition in the Court of Appeals. Jurisdiction once acquired is not lost but continues until the case is terminated, and whatever irregularities attended the execution should be referred to the same court that rendered the decision, because any court that issued a writ of execution has the inherent power to correct errors of its ministerial officers and to control its own processes. From an adverse resolution, the remedy would be a petition for certiorari under Rule 65 if the trial court committed grave abuse of discretion. The petitioner filed no such motion; instead she filed a separate complaint for redemption, which was itself an admission that the levy and sale were in accord with the rules. The Court concluded that the petition was an afterthought filed after her appeal was dismissed through her own negligence.

Doctrine

A petition for annulment of judgment under Rule 47 covers only judgments, final orders, and resolutions in civil actions, on the grounds of extrinsic fraud and lack of jurisdiction. A writ of execution is not a final order or resolution; it is a judicial process to enforce a final judgment, and it cannot be annulled under Rule 47. The nature of an action is determined by its material allegations, not by its caption or its prayer. Irregularities in the levy and sale of property on execution must first be raised by motion before the court that issued the writ, which retains jurisdiction and has the inherent power to correct the errors of its ministerial officers; the remedy from an adverse resolution is a petition for certiorari under Rule 65 on the ground of grave abuse of discretion.

Disposition

The petition was denied due course and dismissed, the decision of the Court of Appeals was affirmed insofar as consistent with the Supreme Court's decision, and the Office of the Court Administrator was directed to investigate the alleged irregularity in the execution sale conducted by the deputy sheriff, with costs against the petitioner.

Remember This

A writ of execution is not a final order and cannot be annulled under Rule 47; the remedy is a motion before the court that issued the writ. Examiners use this case to test the coverage of Rule 47 and the rule that the caption does not determine the nature of an action.