Lonzame v. Amores
REITERATIONFacts
The Antecedents: Eufemia Corporal Blones was the registered owner of Lot No. 19. She sold a portion, Lot No. 19-A, to spouses Melanio and Segunda Flores via a "Kasunduan ng Pagbibilihan" on February 16, 1969, for P200.00 per square meter, payable in installments. The contract stipulated segregation of the lot and issuance of a new title upon full payment, and possession was transferred to the spouses upon signing. The "Kasunduan" was not registered. The Floreses complied with the payments. On August 12, 1970, Blones mortgaged Lot No. 19 to Conchita and Patrocinio Trinidad as security for a P24,000.00 promissory note. The mortgage was registered. When the Floreses offered to pay the balance of P12,000.00 before February 1974, Blones refused and offered to return their payments, which the spouses rejected. They discovered the mortgage and filed an action to nullify the mortgage and compel Blones to accept the balance. Blones defaulted on the promissory note, leading the Trinidads to file a cross-claim. Procedural History: On November 11, 1977, the respondent court ordered Blones to accept P12,000.00 from the Floreses as full payment for Lot No. 19-A, to register the lot in their names subject to the mortgage, and to pay the Trinidads P24,000.00 plus interest and attorney's fees. Default in payment would lead to the sale of Lot No. 19. On November 6, 1978, the Trinidads moved for execution due to Blones' non-payment. The court granted the motion on November 23, 1978, ordering the foreclosure and sale of Lot No. 19-A. The Floreses moved to modify the order to cover Lot No. 19, which was granted. During the public auction, the entire Lot No. 19 was sold as Lot No. 19-A had no separate title. Petitioner Pedro Lonzame was the highest bidder. On the same day, Lonzame executed an "Option to Buy" in favor of the Floreses for Lot No. 19-A at P8,000.00, exercisable within 15 days from confirmation of the sale. The Petition: The Sheriff's Final Deed was issued on September 12, 1979. On September 27, 1979, the Floreses tendered P8,000.00 to Lonzame, who refused, claiming the option had expired. The Floreses filed an "Amended Motion for Execution and/or for Contempt of Court," arguing Lonzame succeeded to Blones' rights and should accept P8,000.00 (based on their computation of the balance, moral damages, and attorney's fees). They also prayed for Lonzame to execute a deed of sale and for other reliefs. On January 10, 1980, the respondent court ordered Lonzame to accept P8,000.00, execute a deed of sale for Lot No. 19-A, and register it. Lonzame's motion for reconsideration was denied. Hence, this petition for review on certiorari to annul the orders of January 10, 1980, and March 19, 1980.
Issue(s)
Whether the respondent court erred in ordering the petitioner, as the highest bidder in a judicial foreclosure sale, to accept a tender of payment from the private respondents based on an "Option to Buy" executed after the confirmation of the sale. Whether the respondent court erred in modifying or amending its decision which had already become final and executory. Whether the petitioner, as a purchaser in a judicial foreclosure sale, is a successor-in-interest of the original owner (Blones) and bound by the unregistered deed of sale between Blones and the spouses Flores.
Ruling
The petition is GRANTED. The orders of the respondent court dated January 10, 1980, and March 19, 1980, are ANNULLED and SET ASIDE.
Ratio Decidendi
On the issue of the respondent court's authority to compel acceptance of payment and execute a deed of sale: The Supreme Court held that the petitioner, as the highest bidder in a judicial foreclosure sale, is not a successor-in-interest of the original owner, Eufemia Corporal Blones. The confirmation of the sheriff's sale by the court divested the parties of their rights and vested them in the purchaser, herein petitioner. Therefore, the petitioner cannot be compelled to accept the P8,000.00 tender of payment from the spouses Flores based on their computation in the amended motion. The "Option to Buy" was a separate transaction entered into after the rendition of the decision, and its enforceability could not be litigated in the original case which had already become final and executory. The court erred in compelling the petitioner to accept the payment and execute a deed of sale. On the issue of modifying a final and executory decision: The Supreme Court reiterated the hornbook doctrine that a decision which has become final and executory can no longer be amended or corrected by the court except for clerical errors. The clarificatory order issued by the respondent court substantially altered the terms of the original decision by introducing new matters related to the "Option to Buy," thereby exceeding its jurisdiction. The court had no more jurisdiction to amend its decision to incorporate a later agreement between the Flores spouses and the petitioner. Such modification was a grave error. On whether the petitioner is bound by the unregistered deed of sale and is a successor-in-interest: The Court found that the petitioner, as a purchaser in a judicial foreclosure sale, cannot be considered a successor-in-interest of Blones. He was not a party to the civil case between Blones and the spouses Flores, and crucially, the deed of sale between Blones and the spouses was never registered nor annotated on the certificate of title of Lot No. 19. Consequently, the petitioner, who purchased the property through a judicial foreclosure of mortgage, cannot be bound by this unregistered deed of sale. The confirmation of the sale vested title in the petitioner, subject only to rights of redemption allowed by law, which do not apply after confirmation in foreclosure sales.
Main Doctrine
A court loses jurisdiction to modify or amend a decision that has become final and executory, except for clerical errors. A purchaser at a judicial foreclosure sale, upon confirmation of the sale, acquires title to the property, divesting the rights of the parties to the action, and is not bound by prior unregistered agreements or subsequent modifications of the original decision to which they were not a party.