G.R. No. 73976 May 29, 1987 THE CONSOLIDATED BANK and TR ST COR!ORATION "SOLIDBANK#, petitioner, vs. HON.

INTERMEDIATE A!!ELLATE CO RT, GOLDEN STAR IND STRIAL COR!ORATION, NICOS IND STRIAL COR!ORATION and THE !RO$INCIAL SHERI%% O% B LACAN, respondents. The basic issue for resolution in this petition for review of the December 13, 1985 decision of the Intermediate Appellate ourt, now the ourt of Appeals, as well as the resolution of !arch 13, 198" den#in$ the motion for reconsideration, is whether or not an attachin$ creditor ac%uires the ri$ht of redemption of a debtor over the attached properties of the latter which are subse%uentl# e&tra'udiciall# foreclosed b# third parties. (riefl#, the facts are as follows) *ri$inall#, petitioner onsolidated (an+ and Trust orporation ,-*.ID(A/01 loaned private respondent /I *- Industrial orporation ,/I *-1 sums of mone# in the total amount of 2*34 !I..I*/ -565/T7 -I8 T9*3-A/D 2I65 93/D45D 5I:9T55/ A/D ";<1== >5-*- ,>;,=?",518.";1. -ubse%uentl#, /I *- failed to pa# bac+ the loan promptin$ -*.ID(A/0 to file a collection case before the ourt of 2irst Instance of !anila, (ranch 88I8. The case was doc+eted as ivil ase /o. 8@A11"11. *n Au$ust 3=, 198@, the court in the aforecited case issued an order of attachment B ... upon the ri$hts, interests and participation of which defendants /I *- Industrial orporation ... ma# have in Transfer ertificate of Title /o. TA@1=581 ,TA3@.5=5 !1 and Transfer ertificate of Title /o. TA1=58= ,TA3@.5=; !1 ,Anne&es B(B, B(A1B, B(A@B and B(A3B of petition1. *n -eptember 1, 198@, pursuant to the writ of attachment issued b# the ourt and upon petitionerCs postin$ of sufficient bond, the -heriff of !anila levied and attached the two real properties described b# the fore$oin$ order of attachment, includin$ the buildin$s and other improvements thereon. Afterwards, the -heriff sent separate /otices of .ev# 3pon 4ealt# to the 4e$istrar of Deeds of !alolos, (ulacan, dated -eptember 1, 198@ re%uestin$ him Bto ma+e the proper annotation in the boo+s of #our officeB b# virtue of the order of attachment dated Au$ust 3=,198@ issued b# the !anila ourt in ivil ase /o. 8@A11"11. Accordin$l#, on -eptember ?, 198@, the 4e$istrar of Deeds of !alolos, (ulacan, pursuant to the re%uest of the !anila -heriff, inscribed and annotated the /otices of .ev# 3pon 4eal >ropert# at the bac+ of Transfer ertificates of Title /os. TA@1=581 ,TA 3@.5=5 !1 and TA@1=58= ,TA3@.5=; !1. >ursuant to the fore$oin$ n$ inscription and annotations, $uards were deputiDed b# the !anila -heriff to secure the premises of the two attached realties.

A #ear later, however, on Eul# 11, 1983, the attached properties which had been mort$a$ed b# /I *- to the 3nited oconut >lanters (an+ ,3 >(1 on !arch 11, 198@, were e&tra'udiciall# foreclosed b# the latter. As the hi$hest bidder therein, a certificate of sale was issued to it b# the -heriff of (ulacan over the sub'ect realties includin$ the buildin$s and improvements thereon. -urprisin$l#, two transactions occurred soon thereafter, both on Au$ust @9, 1983. 2irst, 3 >( sold all of its ri$hts, interests, and participation over the properties in %uestion to a certain !anuel :oF -econd, !anuel :o sold all the ri$hts he ac%uired from 3 >( over the same lots on that ver# same da# to private respondent :olden -tar Industrial orporation ,:*.D5/ -TA41. (arel# a month later, on *ctober 5, 1983, respondent /I *-, thou$h full# aware that it still had the ri$ht to redeem the auctioned properties within the one #ear period of redemption from Eul# 11, 1983, suddenl# e&ecuted a document entitled BGaiver of 4i$ht of 4edemptionB in favor of respondent :*.D5/ -TA4. *n -eptember 15, 1983, :*.D5/ -TA4 filed a petition for the issuance of a writ of possession over the sub'ect realties before the 4e$ional Trial ourt, (ranch 6I of !alolos, (ulacan. *n /ovember ;, 1983, the !alolos ourt $ranted :*.D5/ -TA4Cs petition for a writ of possession and issued the writ. In accordance with these orders, armed men of :*.D5/ -TA4 forcibl# too+ over the possession of the properties in dispute from the $uards deputiDed b# the -heriff of !anila to secure the premises. Thus on /ovember @1, 1983, petitioner -*.ID(A/0, on the stren$th of its prior attachment over the lands in %uestion filed with the !alolos court an omnibus motion to annul the writ of possession issued to :*.D5/ -TA4 and to punish for contempt of court the persons who implemented the writ of possession with the use of force and intimidation. The respondents /I *- and :*.D5/ -TA4, filed oppositions to the fore$oin$ omnibus motion, the former on the basis of the waiver of its ri$ht of redemption to :*.D5/ -TA4, and the latter on its alle$ed i$norance that the lands in %uestion were under custodia legis, havin$ been attached b# the -heriff of !anila. *n Eune 9, 198;, the !alolos ourt issued an order den#in$ the omnibus motion, the decretal portion of which is as follows) G95452*45, the *mnibus !otion of movant onsolidated (an+ and Trust orporation to annul the writ of possession issued b# this ourt in favor of :olden -tar Industrial orporation and to cite for contempt those who fraudulentl# secured and unlawfull# implemented the writ of possession is hereb# D5/I5D for lac+ of merit. ,p. 8 of the (rief for the omplainantA *ppositorAAppellant in A A:.4. 6 /o. =;398 Hp.118, 4olloI1

The petitioner -*.ID(A/0 forthwith interposed an appeal before the Intermediate Appellate ourt ar$uin$ inter alia that the properties were under custodia legis, hence the e&tra'udicial foreclosure and the writ of possession were null and void, and that the ri$ht of /I *- to redeem the auctioned properties had been ac%uired b# -*.ID(A/0. *n December 13, 1985, the Intermediate Appellate ourt rendered its assailed decision Bfindin$ no merit in this appeal and affirmin$ in toto the appealed order of Eune 9, 198;, rulin$ that Bthe properties in issue ... were not in custodia legis at the time of the e&tra'udicial foreclosure.B The petitioner moved for reconsideration, ar$uin$ that its writ of attachment over the properties in %uestion was dul# re$istered in the 4e$ister of Deeds of !alolos, (ulacan, and that the ri$ht to redeem said properties should be retained or $iven bac+ to -*.ID(A/0 as attachin$ creditor. *n !arch 13, 198", the Intermediate Appellate ourt promul$ated its resolution den#in$ the motion for reconsideration for lac+ of merit. 9ence this petition for review, on the $rounds that respondent appellate court decided the case contrar# to law and applicable decisions of the -upreme ourt, and has departed from the accepted and usual course of 'udicial proceedin$s as to call for an e&ercise of the power of supervision of this ourt. The fundamental %uestion herein, which is determinative of the other issues, is whether or not the sub'ect properties were under custodia legis b# virtue of the prior annotation of a writ of attachment in petitionerCs favor at the time the properties were e&tra'udiciall# foreclosed. Ge rule in the affirmative on the followin$ $rounds) 2irst of all, the records show ,specificall# Anne&es B(,B B(A1B to B(A3B of the petition1 that on -eptember 1, 198@, the -heriff of (ranch 88I8 of the ourt of 2irst Instance of !anila, sent separate /otices of .ev# 3pon 4ealt# to the 4e$istrar of Deeds of !alolos (ulacan, re%uestin$ him Bto ma+e the proper annotation in the boo+s of #our office,B Bb# virtue of an order of attachment issued in ivil ase /o. 8@A11"11 dated Au$ust 3=, 198@, ... upon the ri$hts, interests, and participation of which defendant /I *Industrial orporation in this case ma# have in ... .BTransfer ertificate of Title /o. TA @1=581 ,TA3@.5=5 !1 and Transfer ertificate of Title /o. TA@1=58= ,TA3@,5=5 !1. -econdl#, and more si$nificant, the records clearl# show ,pa$e ;, Anne& BDB of petition1 that the 4e$istrar of Deeds of !alolos, (ulacan, on -eptember ?, 198@, inscribed and annotated the fore$oin$ /otices of .ev# at the bac+ of Transfer ertificate of Title /os. @1=58= and @1=581, to wit) T4A/-254 54TI2I AT5 *2 TIT.5 /o. TA@1=58= ,TA3@.5=; !1

5ntr# /o. ?95@; ,!1) 0indF /*TI 5 *2 .567 3>*/ 45A.T7, 5&ecuted in favor of the */-*.IDAT5D (A/0 A/D T43-T *4>*4ATI*/ ,-*.ID(A/01FA>laintiffF onditions) /otice is hereb# $iven that b# virtue of an *rder of Attachment issued b# the .2.I. of !anila, (ranch 88I8, in ivil ase /o. 8@A11"11, all the ri$hts, interest and participation of /I *- I/D3-T4IA. *4>*4ATI*/ADefendant over the herein described lot is hereb# levied upon attached.F Date of Instrument) -eptember 1, 198@F Date of Inscription) -eptember ?, 198@ at @)35. !e#caua#an, (ulacan. ,-:D.1 6I*.5TA 4. .I/ A..* :A4 IA (ranch 4e$ister of Deeds T4A/-254 54TI2I AT5 *2 TIT.5 /o. TA@1=581 ,TA3@.5=5 !1 5ntr# /o. ?95@; ,!1F 0ind) /*TI 5 *2 .567 3>*/ 45A.T7, 5&ecuted in favor of T95 */-*.IDAT5D (A/0 A/D T43-T *4>*4ATI*/ ,-*.ID(A/01 J >laintiffF onditions) /otice is hereb# $iven that b# virtue of an *rder of Attachment issued b# the .2.I. of !anila, (ranch 88I8, in ivil ase /o. 8@A11"11, all the ri$hts, interest and participation of /I *I/D3-T4IA. *4>*4ATI*/ J Defendants over the herein described lot is hereb# levied upon attached.F Date of InstrumentF -eptember 1, 198@F Date of Inscription) -eptember ?, 198@ at @)35. !e#caua#an, (ulacan. ,-:D.1 6I*.5TA 4. .I/ A..* :A4 IA (ranch 4e$ister of Deeds ,pp. 91A9@, 4ollo1 (ased on the fore$oin$ evidence on record, the conclusion is clear that the disputed real properties were under custodia legis b# virtue of a valid attachment at the time the same were e&tra'udiciall# foreclosed b# a third part# mort$a$ee. The rule is well settled that when a writ of attachment has been levied on real propert# or an# interest therein belon$in$ to the 'ud$ment debtor, the lev# thus effected creates a lien which nothin$ can destro# but its dissolution , hua >ua 9ermanos v. 4e$ister of Deeds of (atan$as, 5= >hil. "?=F :overnment, et. al. v. !ercado, "? >hil. ;=91. The fore$oin$ conclusion has two necessar# conse%uences. 2irstl#, it follows that the writ of possession issued b# the !alolos court in favor of respondent :*.D5/ -TA4 is nun and void ab initio because it interfered with the 'urisdiction of a coAordinate and coAe%ual court ,-ee De .eon v. -alvador, 3" - 4A 5"?1) Ghile propert# or mone# is in custodia legis, the officer holdin$ it is the mere hand of the court, his possession is the possession of the court, and to

interfere with it is to invade the 'urisdiction of the court itself ,:ende v. 2lemin$, 3?1 /.5. @d. 191F (ishop v. Atlantic -mo+eless oal o., 882. -upp. @?, ? E- 3@=1. *f e%ual importance is the fact that the transactions on which respondent :*.D5/ -TA4Cs ri$ht to a writ of possession are based are hi$hl# irre$ular and %uestionable, to sa# the least, considerin$ the followin$ circumstances) *n Eul# 11, 1983, the -heriff of (ulacan e&ecuted a certificate of sale over the two lots in %uestion in favor of 3 >(. *n Au$ust @9, 1983, or about a month and a half later, 3 >( sold its ri$hts, interests and participation over the lands to !anuel :o. *n that ver# same da#, Au$ust @9, 1983, !anuel :o sold the same properties to respondent :*.D5/ -TA4. *n *ctober 5, 1983, respondent /I *- which had a one #ear ri$ht of redemption over the lands in %uestion e&ecuted a BGaiver of 4i$ht of 4edemption in favor of respondent :*.D5/ -TA4.B The attempts to brin$ the disputed properties out of the petitionerCs reach, inspite of the attachment, are plain and apparent. (ased on the fore$oin$ facts, we find that respondents /I *- and :*.D5/ -TA4 conspired to defeat petitionerCs lien on the attached properties and to den# the latter its ri$ht of redemption. It appears that in issuin$ the writ of possession, the !alolos court relied on copies of documents ,which did not show the memorandum of encumbrance1 submitted to it b# :*.D5/ -TA4. It was thus led into the error of rulin$ that the petitionerCs attachment was not properl# annotated. -econdl#, it li+ewise follows that the petitioner has ac%uired b# operation of law the ri$ht of redemption over the foreclosed properties pursuant to -ec. " of Act /o. 3135, to wit) In all such cases in which an e&tra'udicial sale is made ... an# person havin$ a lien on the propert# subse%uent to the mort$a$e ... ma# redeem the same at an# time within the term of one #ear from and after the date of sale. It has been held that Ban attachin$ creditor ma# succeed to the incidental ri$hts to which the debtor was entitled b# reason of his ownership of the propert#, as for e&ample, a ri$ht to redeem from a prior mort$a$eB ,.#on v. -tanford, 5 onn. 5;1, ? -E- 5=51. The fact that respondent /I *- e&ecuted a waiver of ri$ht of redemption in favor of respondent :*.D5/ -TA4 on *ctober 5, 1983 is of no moment as b# that time it had no more ri$ht which it ma# waive in favor of another,

2inall#, :*.D5/ -TA4 ar$ues that even if the attachment in issue was dul# re$istered and the petitioner has a ri$ht of redemption, the certificate of sale of the lands in %uestion was re$istered on -eptember ", 1983. It claims that the period to redeem therefore lapsed on -eptember ", 198; without the petitioner ban+ ever e&ercisin$ an# ri$ht of redemption. This ar$ument is untenable. Gell settled is the rule that the pendenc# of an action tolls the term of the ri$ht of redemption. -pecificall#, tills ourt in Ong Chua v. Carr, ,53 >hil. 9?5, 9831 cate$oricall# ruled that) &&& &&& &&& ... /either was it error on the part of the court to hold that the pendenc# of the action tolled the term for the ri$ht of redemptionF that is an old and well established rule. This was reiterated in Fernandez v. Suplido ,9" >hil. 5;1, 5;31, as follows) &&& &&& &&& ... As pointed out in *n$ hua v. arr, 53 >hil. 9?5, the pendenc# of an action brou$ht in $ood faith and relatin$ to the validit# of a sale with pacto de retro tolls the term for the ri$ht of redemption. ... /ot onl# that. It has been held that Bunder a statute limitin$ the time for redemption ... the ri$ht of redemption continues after perfection of an appeal ... until the decision of the appeal ,>hiladelphia !ort$a$e o. v. :ustus, ?5 /.G. 11=?1. In the case at bar, the petitioner commenced the instant action b# wa# of an omnibus motion before the (ulacan ourt on /ovember @1, 1983 or barel# two months after the certificate of sale was re$istered on -eptember ", 1983, well within the one #ear period of redemption. G95452*45, I/ 6I5G *2 T95 2*45:*I/:, the petition is $ranted and 'ud$ment is hereb# rendered) 11 declarin$ as valid and bindin$ the lev# and attachment b# the !anila -heriff on the two realties in %uestion includin$ the buildin$s and improvements thereonF @1 declarin$ that petitioner has ac%uired the ri$ht of redemption over the aforesaid properties which it ma# e&ercise within one #ear from notice of entr# of 'ud$ment in this caseF and 31 declarin$ as null and void ,a1 the order of the (ulacan ourt dated /ovember ;, 1983 $rantin$ the writ of possession to respondent :*.D5/ -TA4, ,b1 its order of

Eune 9, 198; den#in$ the petitionerCs omnibus motion, and ,c1 the Gaiver of 4i$ht of 4edemption e&ecuted b# respondent /I *- in favor of respondent :*.D5/ -TA4. -* *4D545D.