Dizon v. Dizon
REITERATIONFacts
The Antecedents: Petitioner Domingo A. Dizon purchased a house and lot from his nephew, respondent Elpidio R. Dizon. Respondent failed to deliver the property because his co-owner brother, Ricardo, did not authorize the sale of his share. Petitioner filed a complaint for specific performance and sum of money with damages. Procedural History: The Regional Trial Court (RTC) rescinded the contract of sale and ordered respondent to pay petitioner P207,000.00 with legal interest, P350,000.00 with 3% monthly interest, and P50,000.00 for attorney's fees. A writ of execution was issued, and an auction sale was scheduled. Petitioner emerged as the highest bidder at P180,000.00. Subsequently, the sheriff presented a "Supplemental Minutes on Sheriff’s Sale" showing a new bid of P1,690,074.41 made by petitioner's counsel after the auction sale had concluded. Respondent objected, arguing it was a new sale and difficult to redeem. The RTC denied respondent's motion to quash the supplemental sale, finding it beneficial to respondent. The Court of Appeals (CA) granted respondent's petition, setting aside the RTC orders and declaring the supplemental sale void. The Petition: Petitioner seeks review of the CA's decision, arguing he had the option to amend his bid as the highest bidder to conform to the awarded amounts. Respondent maintains the perfected auction sale could not be modified and redemption would be difficult.
Issue(s)
Whether the trial court committed grave abuse of discretion in upholding the validity of the "Supplemental Minutes on Sheriff’s Sale". Whether a perfected auction sale can be modified by a supplemental sale with a higher consideration at the instance of only one party.
Ruling
The petition is denied. The challenged Decision and Resolution of the Court of Appeals are affirmed.
Ratio Decidendi
On the issue of whether the trial court committed grave abuse of discretion in upholding the validity of the "Supplemental Minutes on Sheriff’s Sale": The Court held that the trial court committed grave abuse of discretion in upholding the validity of the "Supplemental Minutes on Sheriff’s Sale." The appellate court correctly found that the auction sale began on time and was finished at 10:25 a.m. on April 3, 1997, with both parties and their counsels participating. The amended bid by petitioner's counsel at 10:45 a.m. of the same date was made after the perfection of the auction sale. Therefore, the supplemental sale could not be considered valid as it was executed after the perfection of the auction sale. The trial court's denial of respondent's motion to quash and its declaration of the supplemental sale's validity were thus tainted with grave abuse of discretion. On the issue of whether a perfected auction sale can be modified by a supplemental sale with a higher consideration at the instance of only one party: Citing Article 1476, paragraph 2 of the Civil Code, the Court reiterated that a sale by auction is perfected when the auctioneer announces its perfection by the fall of the hammer or in another customary manner. Until such announcement, any bidder may retract his bid, and the auctioneer may withdraw the goods. In this case, the auction sale was perfected on April 3, 1997, when the sheriff declared petitioner the highest bidder. Consequently, a supplemental sale with a higher consideration, initiated by only one party (petitioner), could no longer be validly executed after the perfection of the original auction sale. The Court emphasized that the subsequent sale with a higher bid, made after the auction sale had already concluded and been perfected, was an invalid modification of the perfected contract.
Main Doctrine
An auction sale, once perfected by the declaration of the highest bidder, cannot be validly modified by a supplemental sale with a higher consideration at the instance of only one party, as such action constitutes grave abuse of discretion.