Villarin v. Munasque
REITERATIONFacts
The Antecedents: Coronado P. Munasque (Munasque) filed a collection suit against Pablito T. Villarin and P.R. Builders Developers & Managers, Inc. (Petitioners). The parties entered into a compromise agreement where Petitioners acknowledged a joint and solidary obligation of P15 million with monthly interest. To guarantee payment, real estate mortgages previously executed in favor of Intra Strata Assurance Corp. (Intra Strata) were assigned to Munasque. Petitioners failed to satisfy the debt, paying only P250,000.00, prompting Munasque to move for execution. Procedural History: The Regional Trial Court (RTC) of Makati City, Branch 58, granted the motion and issued a writ of execution. Deputy Sheriff Antonio Q. Mendoza (Deputy Sheriff Mendoza) levied 44 parcels of land belonging to Petitioners. Petitioners moved to recall the levy, alleging that the sheriff failed to demand payment first and failed to allow them to choose which properties to levy. Judge Winlove M. Dumayas (Judge Dumayas) denied the motion. After Judge Dumayas inhibited himself, the case was re-raffled to Branch 148 under Judge Oscar B. Pimentel (Judge Pimentel), who declared the auction sale null and void. The Court of Appeals (CA) reversed Judge Pimentel's order and reinstated the validity of the auction sale. The Petition: Petitioners filed a petition for review under Rule 45, arguing that the CA erred in upholding the levy despite the sheriff's failure to comply with Section 9, Rule 39 of the Rules of Court. They contended that the lack of a prior demand for payment and the failure to exhaust personal properties first constituted fatal procedural defects. They further alleged an 'overlevy,' claiming the 44 parcels were worth far more than the P15 million debt, and that the properties were sold 'in bulk' rather than individually.
Issue(s)
Whether the failure of the sheriff to demand immediate payment and exhaust personal properties before levying real properties nullifies the execution sale. Whether there was an 'overlevy' of the Petitioners' properties. Whether the 44 parcels of land were sold in bulk in violation of the Rules of Court.
Ruling
The petition is DENIED. The Decision and Resolution of the Court of Appeals are AFFIRMED.
Ratio Decidendi
On Issue 1: The Supreme Court held that while Section 9, Rule 39 of the Rules of Court requires a sheriff to first demand immediate payment, this requirement was effectively waived by the Petitioners. The records show that Petitioners' counsel, Atty. Jufraida F. Salamero (Atty. Salamero), admitted that Petitioners had no funds to pay even the interest. Furthermore, Petitioners' letter dated November 13, 2002, where they identified eight specific parcels for levy, constituted an exercise of their right to choose properties, thereby curing any initial procedural lapses. The Court reasoned that requiring a formal demand when the debtor has already admitted insolvency would be an 'empty exercise.' Under Article 6 of the New Civil Code, rights may be waived, and Petitioners' conduct in selecting real properties for levy and admitting lack of cash amounted to such a waiver. On Issue 2: The Court ruled that the allegation of 'overlevy' is a factual matter that must be supported by competent evidence. Petitioners failed to meet the burden of proof because they only submitted photocopies of appraisal reports and bank memorandums. Under the Best Evidence Rule (Rule 130, Section 3), these photocopies are secondary evidence and are inadmissible unless the loss or unavailability of the originals is proven. Moreover, the appraisal reports were vague and did not clearly identify the subject properties by their Transfer Certificate of Title (TCT) numbers. Without admissible evidence of the properties' fair market value, the claim of overlevy cannot be sustained. On Issue 3: The Court found no merit in the claim that the properties were sold in bulk. The minutes of the auction sale and the certificate of sale on execution clearly indicated the individual TCT numbers, technical descriptions, and separate bid prices for each of the 44 parcels. The Court applied the legal presumption of regular performance of official duty under Rule 131, Section 3(m). Since Petitioners' representatives were present at the auction and did not object to the proceedings at that time, they cannot belatedly challenge the manner of the sale. The individualization of bid prices in the official documents confirmed that the sale was conducted separately as required by law.
Main Doctrine
The execution of a money judgment follows a specific hierarchy: (1) demand for immediate payment; (2) the debtor's option to choose property; (3) levy on personal property; and (4) levy on real property. However, these steps are procedural safeguards for the debtor and are not absolute if the debtor's conduct indicates a waiver. If a debtor admits to having no funds to satisfy the debt or actively selects real properties to be levied upon, the sheriff is justified in proceeding directly to the levy of real property. Such actions by the debtor cure any initial procedural lapses by the sheriff, as the law does not require the performance of useless acts.