Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=82451:56324&catid=1575&Itemid=566
Timestamp: 2019-04-24 15:49:31+00:00

Document:
G.R. No. 191594, October 16, 2013 - DAVID A. RAYMUNDO, Petitioners, v. GALEN REALTY AND MINING CORPORATION, Respondent.
DAVID A. RAYMUNDO, Petitioners, v. GALEN REALTY AND MINING CORPORATION, Respondent.
Assailed in the present Petition for Review on Certiorari under Rule 451 of the Rules of Court is the Decision2 dated October 30, 2009 and Resolution3 dated March 10, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 105401, which dismissed petitioner David A. Raymundo’s (Raymundo) special civil action for certiorari for lack of merit.
Civil Case No. 18808 is an action for Reconveyance with Damages filed by respondent Galen Realty and Mining Corporation (Galen) against Raymundo and Tensorex Corporation (Tensorex). Subject of the case was a transaction between Galen and Raymundo over a house and lot located in Urdaneta Village, Makati City originally covered by Transfer Certificate of Title (TCT) No. S-105-651 in the name of Galen. By virtue of a Deed of Sale dated September 9, 1987 executed between Galen and Raymundo, title to the property was transferred to the latter, who later on sold the property to Tensorex, which caused the issuance of TCT No. 149755 in its name.
Defendants-appellant’s COUNTERCLAIM is hereby DISMISSED.
In its Order9 dated February 3, 2006, the RTC granted Galen’s motion and ordered the issuance of a writ of execution. The property (land and improvements) was appraised by Asian Appraisal, Inc. at P49,470,000.00.10 Subsequently, the appointed special sheriff issued a Notice of Reconveyance/Notice of Demand to Pay11 on March 8, 2007. The sheriff also issued on April 4, 2007 a Notice of Levy on Execution12 to the Register of Deeds of Makati City over the rights and interest of Tensorex over the property, including all buildings and improvements covered by TCT No. 149755.
On July 16, 2007, the special sheriff issued a Notice of Sheriff’s Sale of Real Estate Property,13 stating that “the total outstanding balance of mortgage indebtedness as of January 25, 1988 and interest for 225 months with 2.25% interest is [P]37,108,750.00 plus costs x x x,”14 and sale at public auction was set on August 8, 2007. Raymundo filed a Manifestation and Urgent Motion15 objecting to the auction sale and expressing his willingness to reconvey the property upon payment in full by Galen of its indebtedness. Galen filed a Counter Manifestation and Opposition16 claiming that reconveyance is no longer feasible as the property is heavily encumbered and title to the property is still in the name of Tensorex which had already gone out of operations and whose responsible officers are no longer accessible.
Raymundo filed a Compliance/Comment21 to the RTC’s order, contending that his obligation to reconvey is not yet due pending payment of Galen’s own obligation.
On December 12, 2007, the RTC issued an Order22 lifting the suspension of the auction sale and directing Galen to coordinate with the deputy sheriff for the enforcement of the decision. The RTC ruled that Raymundo failed to show proof that the title was already registered in his name and thus, it resolves to deny his compliance/comment.
Raymundo filed a Motion for Reconsideration23 of the RTC’s order but it was denied per Order24 dated August 15, 2008. As a result, the property was sold at a public auction on November 26, 2008 for P37,108,750.00, with Galen as the highest bidder, and a certificate of sale25 was issued by the sheriff.
Raymundo then filed a special civil action for certiorari with the CA. In the assailed Decision26 dated October 30, 2009, the petition was dismissed for lack of merit. His motion for reconsideration having been denied in the assailed CA Resolution27 dated March 10, 2010, Raymundo is now seeking recourse with the Court on petition for review under Rule 45 of the Rules of Court.
Galen, on the other hand, claims that Raymundo was given the option to choose between reconveyance and payment of the fair market value of the property but did not manifest his choice. It was only when the property was set for sale at public auction that Raymundo manifested his choice of reconveyance, which was opposed by Galen because by that time, the property was still in the name of Tensorex and was already heavily encumbered.29 Galen maintains that the writ of execution and the auction sale was valid inasmuch as payment of the fair market value of the property is the only feasible way to satisfy the judgment.
The “some other person appointed by the court” can be the Branch Clerk of Court,38 the Sheriff,39 or even the Register of Deeds,40 and their acts when done under such authority shall have the effect of having been done by Raymundo himself. A party cannot frustrate execution of a judgment for a specific act on the pretext of inability to do so as the Rules provide ample means by which it can be satisfied.
Conversely, Galen’s obligation to pay the mortgage obligation is not subject to Raymundo’s reconveyance of the property. If Galen refuses to pay, it is only then that the court may direct the foreclosure of the mortgage on the property and order its sale at public auction to satisfy Galen’s judgment debt against Raymundo, pursuant to Rule 68 of the Rules of Court on Foreclosure.41 If Raymundo, meanwhile, unjustly refuses to accept Galen’s payment, the latter’s remedy is to consign the payment with the court in accordance with the Civil Code provisions on consignment.
It is only when reconveyance is no longer feasible that Raymundo and Tensorex should pay Galen the fair market value of the property. In other words, it is when the property has passed on to an innocent purchaser for value and in good faith, has been dissipated, or has been subjected to an analogous circumstance which renders the return of the property impossible that Raymundo and/or Tensorex, is obliged to pay Galen the fair market value of the property.
In this case, it appears that the RTC accommodated Galen’s choice of payment of the fair market value of the property and it became the main obligation of Raymundo as well as Tensorex instead of being the alternative. Worse, it even considered the subject property as absolutely owned by Tensorex and levied upon the same to satisfy payment of the fair market value of the very property that has only been pledged as security of Galen’s loan. While it indeed appears that Raymundo was able to transfer title of the property to Tensorex, it should be noted that the latter is a party to Civil Case No. 18808 and is necessarily bound by the judgment. The dissolution of Tensorex is not a valid reason to avoid reconveyance inasmuch as the court may order the transfer of title to Galen by some other person appointed by the court in accordance with Section 10, Rule 39 of the Rules of Court.
The RTC, therefore, committed grave abuse of discretion in ordering the payment of the fair market value of the subject property despite the fact that reconveyance is still feasible under the circumstances of this case. Consequently, the CA committed a reversible error in sustaining the assailed RTC orders and in dismissing Raymundo’s special civil action for certiorari for lack of merit.
Before concluding, the Court notes that under the final and executory CA Decision dated May 7, 2004, Galen was adjudged to pay Raymundo the sum of P3,865,000.00 with legal interest from the date of the filing of the complaint until fully paid. Raymundo, meanwhile, was ordered to pay damages, attorney’s fees and costs of suit.
1. When the obligation [is] breached[, and it] consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
Recently, the Monetary Board of the Bangko Sentral ng Pilipinas issued Resolution No. 796 dated May 16, 2013, revising the interest rate to be imposed for the loan or forbearance of any money, goods or credits, in the absence of an express contract, to six percent (6%) per annum. This was implemented by BSP Circular No. 799 dated June 21, 2013 and effective July 1, 2013.
(b) The damages, attorney’s fees and costs to be paid by Raymundo shall earn interest at the rate of six percent (6%) per annum from the date of finality of the CA Decision on May 7, 2004 until fully paid.
WHEREFORE, the petition is GRANTED. The Decision dated October 30, 2009 and Resolution dated March 10, 2010 of the Court of Appeals in CA-G.R. SP No. 105401 are REVERSED and SET ASIDE. Accordingly, the assailed Orders dated August 6, 2007, December 12, 2007 and August 15, 2008 of the Regional Trial Court of Makti City, Branch 62, as well as the writ of execution dated January 10, 2007 and all other orders, writs and processes issued pursuant thereto are NULLIFIED.
2 Penned by Associate Justice Portia Aliño-Hormachuelos (retired), with Associate Justices Fernanda Lampas Peralta and Ramon R. Garcia, concurring; id. at 44-61.
4 See CA Decision dated May 7, 2004 in CA-G.R. CV No. 68294; id. at 75-90.
5 Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Danilo B. Pine and Edgardo F. Sundiam, concurring; id.
30Tumibay v. Soro, G.R. No. 152016, April 13, 2010, 618 SCRA 169, 175-176, citing Mahinay v. Asis, G.R. No. 170349, February 12, 2009, 578 SCRA 562, 574 and Ingles v. Cantos, 516 Phil. 496, 506 (2006); B.E. San Diego, Inc. v. Alzul, 551 Phil. 841 (2007).
31Tumibay v. Soro, id. at 176, citing DHL Philippines Corp. United Rank and File Asso. Federation of Free Workers v. Buklod ng Manggagawa ng DHL Philippines Corp., 478 Phil. 842, 853 (2004) and Jaban v. CA, 421 Phil. 896, 904 (2001).
33Pastor, Jr. et al. v. CA, et al., 207 Phil. 758, 767 (1983).
34Muñoz, Jr. v. Ramirez, G.R. No. 156125, August 25, 2010, 629 SCRA 38, 51.
35Roberts v. Papio, 544 Phil. 280, 300-301 (2007).
36 198 Phil. 338 (1982).
37 Id. at 348, citing Civil Code, Article 2088.
38 See Balais-Mabanag v. Register of Deeds of Quezon City, G.R. No. 153142, March 29, 2010, 617 SCRA 1, 10.
39Tumibay v. Soro, supra note 30, at 178-179, citing Buñag v. CA, 363 Phil. 216 (1999).
40Cruz v. Court of Appeals, 459 Phil. 264, 282 (2003).
41 Spouses Rosales v. Spouses Suba, 456 Phil. 127, 133 (2003).
42Mahinay v. Gako, Jr., G.R. No. 165338, November 28, 2011, 661 SCRA 274, 297, citing Yu v. CA, 321 Phil. 897, 901 (1995).
43 Article 2088 of the Civil Code provides that “[t]he creditor cannot appropriate the things given by way of pledge or mortgage, or dispose of them. Any stipulation to the contrary is null and void.” See also Briones-Vasquez v. Court of Appeals, 491 Phil. 81, 94-95 (2005), which ruled that the principle of pactum commissorium is applicable to equitable mortgages.
44 144 Phil. 418 (1970).
46 G.R. No. 156125, August 25, 2010, 629 SCRA 38.
47 Id. at 54, citing Lustan v. CA, 334 Phil. 609, 620 (1997). See also Bacungan v. CA, G.R. No. 170282, December 18, 2008, 574 SCRA 642, 650.
48 578 Phil. 262 (2008).
49 G.R. No. 97412, July 12, 1994, 234 SCRA 78.
50 Supra note 48, at 276-278.
52 See Penta Capital Corporation v. Bay, G.R. No. 162100, January 18, 2012, 663 SCRA 192, 213-214.

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