Bualan v. Sarenas
REITERATIONFacts
The Antecedents: Plaintiffs, Bagobos, won a case to recover the hacienda Sirawan, composed of lots 107 and 700, from Ciriaco Lizada. Upon taking possession, they found their attorneys, defendants Juan A. Sarenas and Domingo Braganza, appropriating the fruits. Plaintiffs filed a civil case (No. 607) to recover the property. The attorneys claimed ownership of two-thirds of the hacienda based on their contract for fees. Procedural History: The second suit was compromised, with a judgment rendered on January 18, 1927, ordering the return of lots 107 and 700 to the plaintiffs, who in turn were to pay P6,000 as fees. Plaintiffs paid P5,126.13 to their attorneys and P1,035.87 for land tax on the lots for 1926, which the attorneys failed to pay while in possession. Both payments, totaling P6,126, included the P6,000 judgment and interest. The attorneys protested the land tax payment and obtained a writ of execution for P1,053.87 in civil case No. 607. Under this writ, lot 107 was attached and sold at public auction to defendant Juan A. Sarenas for P500 on August 30, 1929. For the balance, lot 700 was attached and sold to defendants Sarenas and Braganza for P877.25 on June 23, 1931. Prior to the auction sales, the attorneys had applied for registration of the lots in the plaintiffs' name. After the auction, they applied for registration in their own name. Lot 107 was registered in their name (OCT No. 725) on December 10, 1930. The registration of lot 700 in their name was denied, and registration in favor of the plaintiffs was decreed, a decision affirmed by the Supreme Court (G.R. No. 38581, 61 Phil., 70) on December 18, 1934, declaring the sale of lot 700 null and void due to inadequate price (P877.25 for a lot assessed at over P60,000 in 1927) and holding that the land tax payment should have been credited to the judgment. The Petition: Plaintiffs filed the present action to have the sale of lot 107 declared null and void and to transfer its title to them. The lower court dismissed the complaint as to lot 107 and deemed it unnecessary to rule on lot 700 due to the pending appeal. Plaintiffs appealed.
Issue(s)
Whether the sale at public auction of lot No. 107 is null and void. Whether the defendants should be ordered to execute a deed of transfer of lot No. 107 in favor of the plaintiffs. Whether the defendants should be ordered to pay for the fruits of lots Nos. 107 and 700 during their possession.
Ruling
The appealed judgment is reversed. Defendants are ordered to execute a deed of transfer of lot No. 107 in favor of the plaintiffs, or, if impossible due to alienation to a third party, to pay P2,810, its value. The court a quo is directed to reopen the case to receive evidence on the production of lots 107 and 700 during the defendants' possession, and to order the defendants to pay for the fruits thereof. The complaint against the deputy sheriff is dismissed.
Ratio Decidendi
On the nullity of the sale at public auction of lot No. 107: The Supreme Court held that the sale of lot No. 107 at public auction was null and void. This was based on the finding that the writ of execution under which the sale was conducted was issued without a valid judgment to execute. The Court noted that the plaintiffs had paid the entire amount of the judgment in civil case No. 607, including the P6,000 fees and interest, and that the payment of land tax was also chargeable to this judgment. Therefore, when the writ of execution was issued, the defendants had no outstanding judgment to enforce. Consequently, all proceedings in the execution of an already satisfied judgment, including the attachment and sale of lot 107, were deemed null and void. The alleged deed of sale and the subsequent decree of registration and certificate of title issued in favor of the defendants were also declared null and void. On the transfer of title for lot No. 107: The Court found it just and equitable to order the defendants to transfer the title of lot No. 107 to the plaintiffs, as the decree of registration and certificate of title were obtained by fraud and the defendants had no legal title to the lot. The Court emphasized that the plaintiffs had not applied for a review of the decree and that the lot had not been sold to a third person who acted in good faith. Therefore, it would be inequitable for the defendants to enrich themselves at the prejudice of the plaintiffs by keeping land that did not belong to them. On the alternative remedy and payment of fruits: In the event that lot No. 107 had been transferred to a good-faith third party, making its transfer to the plaintiffs impossible, the defendants were ordered to pay the plaintiffs the sum of P2,810, representing the value of the lot at the time of the public auction. Furthermore, the defendants were ordered to pay for the fruits that the plaintiffs failed to receive from the time the defendants took possession of both lots until they were turned over. However, due to deficiencies in the evidence presented regarding the date of turnover and the exact amount of production for lot No. 107, the trial court was directed to reopen the case to receive further evidence on these matters.
Main Doctrine
A writ of execution issued on an already satisfied judgment is null and void, and all subsequent proceedings, including attachment, public auction sale, and the resulting deed of sale and certificate of title, are likewise null and void. The payment of land taxes that became due during the possession of the defendants should be credited to the judgment amount.