ZACARIAS COMETA AND HERCO REALTY AND AGRI-DEVELOPMENT CORPORATION, PETITIONERS, VS. HON. INTERMEDIATE APPELLATE COURT AND JOSE FRANCO, RESPONDENTS.

This is a petition for review of the decision of the then
Intermediate Appellate Court, now Court of Appeals, granting the issuance of a
writ of possession in favor of respondent Jose Franco thus placing him in
possession of certain real properties sold to him as judgment creditor and
highest bidder at an execution sale. The appellate court reversed an earlier decision of the Regional Trial
Court.

On July 2, 1976, in a suit for damages filed by respondent Jose
Franco, entitled “Jose Franco v. Zacarias Cometa” and docketed as
Civil Case No. 17585, the then Court of First Instance of Rizal, Branch XV,
awarded to the respondent the sum of P57,396.85. The judgment became final and a writ of execution was issued on March
9, 1978. Thereafter, the sheriff levied
on execution three commercial lots of Cometa (Rollo, p. 122) and sold them at
public auction on October 17, 1978 to the respondent for the amount of the
judgment. The sheriff’s return was made
on March 12, 1981.

On November 17, 1981, petitioner Herco Realty and
Agri-Development Corporation filed with the same Branch XV of the Court of
First Instance of Rizal an action to annul the levy on execution and sale at
public auction of the real properties. It alleged that the ownership of the lots had been transferred to it by
Cometa before the execution sale. It
assailed the validity of the levy and sale on the ground that the sheriff, in
disregard of the proper procedural practice, immediately proceeded against
Cometa’s real properties without first exhausting his personal properties, that
the properties were sold en masse and not by each parcel, and that the said
properties which are commercial lots situated in Guadalupe, Makati and are
conser­vatively valued at P500,000.00 were sold only for P57,396.85, the amount
of the judgment.

On March 22, 1982, the trial court in the first case issued an
order directing the Registrar of Deeds of Rizal to cancel Cometa’s certificates
of title to the lots and to issue new ones in favor of the respondent. Cometa went to this Court on petition for certiorari
questioning the said order. On February
28, 1983, however, the petition was dismissed for lack of merit.

On May 13, 1983, the respondent filed with the Regional Trial
Court, Branch 140, National Capital Region, a motion for the issuance of a writ
of possession. The petitioner opposed
the motion on the ground that there is pending before another Regional Trial
Court an action for the annulment of the levy and sale of the properties in
question. On August 12, 1983, the trial
court issued an order granting the motion but the same was reconsidered and set
aside on November 18, 1983 on the ground that the issuance of a writ of
possession was pre­mature. The respondent instituted a special civil
action for certiorari before this Court on June 27, 1984 but the case
was referred to the then Intermediate Appellate Court. On October 4, 1984, the appellate court
ruled for the respondent and granted the issuance of the writ in his favor.

Hence, this petition for certiorari filed by the
petitioners Zacarias Cometa and Herco Realty and Agri-Development Corporation.

The only issue in this case is whether or not Regional Trial
Court, Branch 140, can order peti­tioner Cometa to deliver the possession of
the properties sold at public auction to the respondent in spite of the
pendency of Civil Case No. 43846 in another Regional Trial Court for the
annulment of the levy and sale of said properties.

The
petitioners maintain the negative. They allege that the issuance of a writ of possession is premature
because the validity of the levy and sale on execution is still in issue. They take exception to the finding of the
respondent appellate court that their failure to redeem the properties within
the redemption period authorized the trial court under Section 35, Rule 39 of
the Revised Rules of Court, to place the purchaser or judgment creditor in
possession of the said properties. They
further assail the respondent court’s finding that the “peti­tioner has
only himself to blame that more property was sold by the sheriff, or that the
value of the property sold to satisfy his debt far exceeded the judgment
against him, for he could, and should, have been present at the auction to
direct the manner and order of the sale of his various property (sic)”
(Rollo, p. 27).

On the other hand, the respondent asserts that this Court disposed of Civil Case No. 17585 when it issued
resolutions dated February 9, 1983 and May 4, 1983 denying, for lack of merit,
the petitioner’s prayer to reverse the trial court’s order for entry of
judgment and issuance of new certificates of title in favor of the
respondent. He states that what the
lower court has to do is ministerial and mandatory. He contends that in this case, even Civil Case No. 43846 which
seeks the annulment of the levy and sale of the properties may be dismissed on
the ground of res judicata.

We sustain the
petitioner’s view.

The resolution of this case calls for a consideration of the nature of a writ of possession as it relates to an execution sale.

In the case of Mabale v. Apalisok (88 SCRA
234), this Court held:

“xxx That writ is available (1) in a land registration
proceeding, which is a
proceeding in rem (Sec. 17, Act No. 496; Estipona v. Navarro, L-41825, January
30, 1976, 69 SCRA 285, 291); (2) in an extrajudicial foreclosure of a realty
mortgage (Sec. 7, Act No. 3135); (3) in a judicial foreclosure of a mortgage, a
quasi in rem proceeding, provided that the mortgagor is in possession of the
mortgaged realty and no third person, not a party to the foreclosure suit, had
intervened (Rivera v. Court of First Instance of Nueva Ecija and Rupac, 61 Phil. 201; Ramos v. Manalac and
Lopez, 89 Phil. 270, 275) and (4) in execution sales (last par. of sec. 35, Rule 39, Rules of Court).”

The possession of the property sold at an execution sale shall be conferred on the purchaser under
the conditions set by Section 35 of Rule 39, Rules of Court, to wit:

“Sec. 35. Deed and
possession to be given at expiration of redemption period. By whom executed or given. – If no redemption be made within twelve
(12) months after the sale, the purchaser, or his assignee, is entitled to a
con­veyance and possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and no
other redemption has been made, and notice thereof given, and the time of
redemption has expired, the last
redemptioner, or his assignee, is entitled to the conveyance and posses­sion,
but in all cases the judgment debtor shall have the entire period of twelve
(12) months from the date of the sale to redeem the property. The deed shall be executed by the officer
making the sale or by his successor in office, and the latter case shall have
the same vali­dity as though the officer making the sale had continued in
office and executed it.

“Upon the execution and delivery of said deed the purchaser,
or redemptioner, or his assignee, shall be substituted to and acquire all the
right, title, interest and claim of the judgment
debtor to the property as of the time of the levy, except as against the
judgment debtor in possession, in
which case the substitution shall be effective as of the date of the deed. The possession of the property shall be
given to the purchaser or last redemptioner by the same officer unless a third
party is actually holding the property adversely to the judgment debtor.”

From the foregoing
discussion, it can be seen that the writ of possession may issue in favor of a
purchaser in an execution sale when the deed of conveyance has been executed
and delivered to him after the period of redemption has expired and no
redemption has been made by the judgment debtor.

A writ of possession is complementary to a writ
of execution (see Vda. de Bogacki v. Inserto, 111 SCRA 356, 363), and in an
execution sale, it is a consequence of a writ of execution, a public auction
sale, and the fulfillment of several other conditions for conveyance set by
law. The issuance of a writ of
possession is dependent on the valid execution of the procedural stages preceding
it. Any flaw afflicting any of its
stages, therefore, could affect the validity of its issuance.

In the case at bar, the
validity of the levy and sale of the properties is directly put in issue in
another case by the petitioners. This
Court finds it an issue which requires pre-emptive resolution. For if the respondent acquired no interest
in the property by virtue of the levy and sale, then, he is not entitled to its
possession.

The respondent appellate court’s emphasis on the failure of the
petitioner to redeem the properties within the period required by law is
misplaced because redemption, in this case, is incon­sistent with the
petitioner’s claim of invalidity of levy and sale. Redemption is an implied admission of the regularity of the sale
and would estop the petitioner from later impugning its validity on that
ground. (See Castillo v. Nagtalon, 4
SCRA 48, 53.)

Moreover, equitable considerations constrain us to reverse the
decision of the respondent court. The
fact is undisputed that the properties in question were sold at an unusually
lower price than their true value. Properties worth at least P500,000.00 were sold for only
P57,396.85. We do not comment on the
consequences of the inadequacy because that is the very issue which confronts
the court below in the pending case. It
appearing, however, that the issuance of the writ of possession would and might
work injustice because the petitioner might not be entitled thereto, we rule
that it be withheld.

WHEREFORE, the decision appealed from is hereby
REVERSED. The order of the trial court
dated November 18, 1983 is reinstated.

SO ORDERED.

Fernan, (Chairman), Paras, Padilla, Bidin, and Cortes, JJ., concur.