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III. The trial court erred in absolving the defendant Visayan Surety
& Insurance Corporation from liability on the surety bond it had
issued in behalf of defendant Juanita Hubo in favor of plaintiff.
It appears that appellant WESTERN had furnished not only
counsel for VISAYAN, as the sole appellee in its appeal, of copies
of its Notice of Appeal and motions related to the perfection of
its appeal, the record on appeal, 5 and its appellant's brief, but
also petitioners' counsel who filed a brief on July 18, 1960, as
stated in the brief for respondent VISAYAN, which was filed on
August 18, 1960. On October 2, 1965, the Court of Appeals
rendered judgment 6the dispositive portion of which was
quoted at the threshold of this decision, which petitioners seek to
reverse or annul, in so far as it imposes liability on them despite
that they were never parties to the appeal of the decision of the
trial court to the Court of Appeals.
Aside from the alleged lack of jurisdiction of the Court of Appeals
to render the aforementioned decision against them, petitioners
also claim denial of due process insofar as the Court of Appeals
reversed the decision of the Court of First Instance dismissing the
third-party Complaint against them, 7the third Party Plaintiff
(VISAYAN) never having appealed said decision of
dismissal nor had it served petitioners, as the third party
defendants, with a copy of its brief, which was exclusively in
answer to the brief of appellant (WESTERN).
The question raised is purely on a procedural matter. In
this jurisdiction, the rule is pretty well-settled that a party who
does not appeal from the decision may not obtain any
affirmative relief from the appellate court other than what
he has obtained from the lower court, if any, whose decision
is brought up on appeal. 8 The respondent VISAYAN has not
appealed the decision of the Court of First Instance of Iloilo for
the simple reason that it dismissed the complaint against it.
When its third-party complaint against petitioners as third party
defendants was also dismissed, it nevertheless could have
appealed, if it wanted the appellate court to reverse the decision
dismissing its third-party complaint, in the event that, as was an
ever-present possibility, the decision of the appellate court would
be adverse to it, and favorable to appellant. This would be the
more prudent action to take. It would be motivated by the same
consideration of avoiding multiplicity of actions, as was what
prompted VISAYAN to file the third party complaint in the lower
court, as the Rules allow and encourage, if not require and
demand.
Verily, it is the appeal taken by one of the parties against the
other, that gives jurisdiction of the appellate court over said
parties. The appellate court cannot acquire jurisdiction over
persons who are neither appellants nor appellees. For the
respondent court, in the instant case, to have rendered a decision
against petitioners who were neither appellees nor appellant
in the appeal brought before said court, is to act entirely
without jurisdiction. As a corollary, petitioners would also be
denied due process, never having been put on notice that
they were involved in the appeal so that they would have
tried to prevent the appellate court from rendering an adverse
decision against them in the ordinary course of law.
True it is that petitioners filed a brief on July 18, 1960, apparently
under a mistaken belief that having been furnished a copy of
appellant WESTERN's brief which it was not its duty to do, they
also had to file their own. They certainly did not have to, because
appellant WESTERN did not appeal as it could not have done so,
from the decision of the trial court dismissing the third-party
complaint against them. If they have to file a brief, it would be
one in answer to that of appellee VISAYAN. But VISAYAN did not
finish petitioners with its brief, which was filed on August 18,
1960 later than the filing of petitioners' aforementioned brief on
July 28, 1960, which, therefore, was not in reply to VISAYAN's
brief.
We are not persuaded that the cases relied upon the respondent
court in rendering the questioned decision against petitioners
who were not parties to the appeal justify its action complained
of as lacking in authority or jurisdiction and denying petitioners
their right to due process. If judgment is rendered by the
appellate court without having given the appellee an opportunity
to be heard through its brief, the judgment is clearly vulnerable
on ground of denial of due process. With more reason would a
judgment be similarly assailable as against one who was not
even an appellee at all, as herein petitioners. The American
cases cited by the Court of Appeal 9speak of either "co-parties,"
some having appealed but others did not, or of "joint liability "
and "joint judgment," neither of which is extant in the present
case. Petitioners are not co-parties with VISAYAN. Neither is
their iability as alleged, a "joint" one with VISAYAN,
insofar as appellant WESTERN is concerned. The judgment
on the original complaint is likewise not a "joint
judgment" with that dismissing the third party complaint.
The Philippine case cited 10in the decision under review is clearly
inapplicable. It speaks of an appeal of one of several judgment
debtors, and whether it would affect the liability of those who did
not appeal. Petitioners were never judgment debtors because the
complaint against them seeking to impose liability on them was
dismissed by the trial court.
It is worth also noticing that the Court of Appeals rendered
judgment against petitioners because it sustained VISAYAN's
contention that although the appeal was interposed by WESTERN
alone, the whole case can be considered open again for
adjudication of all the questions involved therein which were
submitted to the lower court, including the dismissal of its crossclaim and third-party complaint against herein petitioners,
despite that no appeal was taken from the dismissal of both
cross-claim and third-party complaint. 11It is, likewise, to be
noticed that petitioners were never given an opportunity to
controvert the above contention of VISAYAN. The denial of
due process in this specific instance therefore, manifest
itself loud and clear. WHEREFORE, the decision appealed from
hereby is reversed insofar as it holds the petitioners liable
as third-party defendants to the third-party plaintiff, the
herein respondent Visayan Surety & Insurance Corporation. No
costs.
G.R. No. 86237 December 17, 1991 JORGE NAVARRA and
CARMELITA BERNARDO NAVARRA and THE RRRC
DEVELOPMENT CORP., Petitioners, vs. COURT OF APPEALS
and PIANTERS DEVELOPMENT BANK,Respondents.
CRUZ, J.: The respondent Court of Appeals 1 is faulted in this
petition for review for sustaining the orders of the trial court
dated Fe ruary 22, 1988, and May 20, 1988. The petitioners,
spouses Jorge Navarra and Carmelita Benardo, together with
Ruben Bernardo and Cresencia Villanueva and their family
corporation, the RRRC Development Corporation, executed a real
estate mortgage in favor of private respondent Planters
Development Bank over five parcels registered land to secure the
payment of a loan in the principal sum of P1,200,000.00.
When the petitioners failed to pay their obligation, Planters
caused the extra-judicial foreclosure of the mortgage in
accordance with Act No. 3135 as amended. On May 15, 1984, a
public auction was held; the following day the sheriff issued a
certificate of sale in favor of Planters as the highest bidder. The
one-year period having expired without the petitioners
exercising their right of redemption, ownership of the five
parcels of land was transferred to the private respondent
Planters upon the issuance in its name of new TCT Nos. by the
Register of Deeds of Makati, Metro Manila.
Thereafter, Planters sent a letter of demand to the
petitioners to vacate the premises, but the demand was
rejected. It then filed a petition for the issuance of a writ of
possession pursuant to Section 6 of Act No. 3135 as amended
possession was set for hearing. During the hearing, the lower
court discovered certain facts, among them: In Civil Case No. C11232, the petitioner-spouses claim ownership of the foreclosed
property against the respondent bank and Nicanor Reyes to
whom the former sold the property by negotiated sale; the
complaint alleged that the DBP knew the assumption of mortgage
between the mortgagors and the petitioner-spouses and the
latter have paid to the respondent bank certain amounts to
update the loan balances of the mortgagors and transfer and
restructuring fees which payments are duly receipted; the
petitioner-spouses were already in possession of the property
since September 28, 1979 and long before the respondent bank
sold the same property to respondent Nicanor Reyes on October
28,1984; and the respondent bank never took physical
possession of the property.
Under these circumstances, the obligation of a court to issue a
writ of possession in favor of the purchaser in a foreclosure of
mortgage case ceases to be ministerial. In the said case, this
Court took into account the circumstances that as early as 1979
the judgment debtor was no longer in possession of the disputed
property and that there was a pending civil case involving the
rights of third parties, namely, the petitioner-spouses. No such
third parties are involved in the case at bar, the controversy
being confined only to Planters, as mortgagee, and the
Navarra spouses, as mortgagors.
The purchaser at an extra-judicial foreclosure sale has a right to
the possession of the property even during the one-year period of
redemption provided he files an indemnity bond. After the
lapse of the said period with no redemption having been
made, that right becomes absolute and may be demanded
by the buyer even without the posting of a bond.
Possession may then be obtained under a writ which may be
applied for ex parte pursuant to Section 7, of Act 3135 as
amended by Act 4118 as follows:
Sec. 7. In any sale made under the provisions of this Act, the
purchaser may petition the Court of First Instance of the province
place where the property or any part thereof is situated, to give
him possession thereof during the redemption period, furnishing
bond an amount equivalent to the use of the property for a period
of twelve months, to indemnify the debtor in case it be shown
that the sale was made without violating the mortgage or without
complying with requirements of this Act. Such petition shall be
made under oath filed in form of an ex parte motion in the
registration or cadastral proceedings if the property is registered,
or in special proceedings the case of property registered under
the Mortgage Law or under section one hundred and ninety-four
of the Administrative Code or any other real property
encumbered with a mortgage duly registered in the office of any
register of deeds in accordance with any existing law, and in each
case the clerk of the court shall, upon the filing such petition,
collect the fees specified in paragraph eleven of section one
hundred and fourteen of Act Numbered Four hundred and nine
six, as amended by Act Numbered Twenty-eight hundred and six,
and the court shall, upon approval of the bond, order that a writ
possession issue, addressed to the sheriff of the province in
which property is situated, who shall execute said order
immediately.
Applying this provision, the respondent Court of Appeals correctly
observed: Let it be stressed that, while it is true that the claim of
ownership over the five (5) parcels of land is pending litigation in
Civil Case 16917, until and unless the lower court in said case has
finally adjudicated the ownership thereof to petitioners, private
respondent cannot be deprived of its right of possession over the
same since the right of private respondent springs from the
failure of petitioners redeem the foreclosed properties within the
one-year period granted by law and the consequent issuance of
new transfer certificates of title in its name. Consequently, the
claim of ownership, allegedly in view a perfected contract of sale,
is left to be determined in Civil Case 16917. The same cannot be
raised as a justification for opposing t issuance of a writ of
3. That this case has been pending for years, as the plaintiff
and the Honorable Court were led to believe that the matter in
dispute would be settled amicably;
4. That an appeal by defendant would obviously be for
purposes of delay;
5. That on appeal, the case would certainly drag on for many
years, and in the meantime, the actual loss and damages
sustained by plaintiff, who because of such loss have become
heavily obligated and financially distressed, would remain
uncompensated and unsatisfied
6. That also, plaintiff is willing and able to file a bond to answer
for any damage which defendant may suffer as a result of an
execution pending appeal. 4
Subsequently, Deputy Sheriff Restituto R. Quemada who was
assigned to enforce the writ of execution, garnished in favor
of ECI all amounts due and payable to NPC which were then in
possession of MERALCO and sufficient to cover the judgment sum
of P1,108,985.31. 5
Attempts to lift the order of execution having proved
futile and the offer of a supersedeas bond having been
rejected by the lower court, NPC filed with the Appellate Court a
petition for certiorari. 6
In its challenged decision of October 20, 1971, the Court of
Appeals granted NPCs petition and nullified the execution
pending appeal of the judgment rendered by the trial court on
December 28, 1970, as well as all issued writs and processes in
connection with the execution. One justice dissented. 7 On
November 11, 1971, MERALCO sought from the Appellate Court a
clarification and reconsideration of the aforesaid decision on the
ground, among others, that the decision was being used
by NPC to compel MERALCO to return the amount of
P1,114,545.23 (inclusive of sheriff's fees) in two checks which it
had already entrusted to the deputy sheriff on February 23, 1971,
who then indorsed and delivered the same to ECI. Whereupon, in
its resolution of January 7, 1972, the Appellate Court held the
sheriff, MERALCO and EC liable to restore to NPC the amount due
to NPC which MERALCO had earlier turned over to the sheriff for
payment to ECI. 8
Their two motions for reconsideration having been denied, ECI
and MERALCO filed separate petitions for review before this
Court: Nos. L-34589 and 34656, the very petitions before us for
adjudication. In this connection, it must be made clear that we
are not concemed with the main appeal. For the present, we limit
our discussion to the correctness of the extraordinary writ of
execution pending appeal and the ordered restitution of the
garnished funds---two collateral matters which have greatly
exacerbated the existing dispute between the parties.
We shall deal first with the propriety of the execution
pending appeal. Section 2, Rule 39 of the Rules of Court
provides: Execution pending appeal. On motion of the
prevailing party with notice to the adverse party the court may,
in its discretion, order execution to issue even before the
expiration of the time to appeal, upon good reasons to be
stated in a special order. If a record on appeal is filed thereafter,
the motion and the special order shall be included thereon.
While the rule gives the court the discretionary power to allow
immediate execution, the following requisites must be satisfied
for its valid exercise: (a) There must be a motion by the
prevailing party with notice to the adverse party; (b) There
must be a good reasons for issuing the execution; and (c) The
good reasons must be stated in a special order.
In its assailed decision, the Appellate Court, trough Justice
Salvador V. Esguerra, observe that NPC, as defendant in the civil
case for damages, was being ordered to pay the amount of P
1,108,985.31 pending appeal when practically 40% thereof was
made up of awards of damages based on the court's sole and
III
We now consider the appeal on the merits. 1. To
begin with, the original tracing cloth plan of the land applied for,
which must be approved by the Director of Lands, was not
submitted in evidence. The submission of such plan is a statutory
requirement of mandatory character. 17 Unless a plan and its
technical description are duly approved by the Director of Lands,
the same are not of much value. 18
1969. 4 The loans matured during the pendency of the appeal and
because of the failure of the Arandas to redeem the same,
the two mortgages were foreclosed and the encumbered
properties were sold at public auction to mortgagees Cruz and
Oxiles on February 23, 1978 and March 30, 1978 respectively.
Eventually, the mortgagees consolidated their ownership
and new transfer certificates of title were issued in their
names. Meanwhile, on June 11, 1970, while their appeal was still
pending before the Appellate Court 5 private respondents decided
to register with the Register of Deeds of Bulacan notices of lis
pendens on all transfer certificates of title covering the parcels of
land mortgaged to Alfredo Cruz and Aurelio Oxiles.
On March 17, 1977, the Appellate Court, through Justice
Guardson R. Lood, reversed the decision of the Bulacan trial court
and declared the De Laras et al. as the owners of the disputed
lots covered by sixteen transfer certificates of title. The
dispositive portion of the decision reads as follows: WHEREFORE,
in view of all the foregoing, the judgment appealed from is
hereby reversed; consequently, dismissing this case against the
defendants-appellants and declaring them owners of the
properties in question with costs against the plaintiffs- appellees.
The counterclaim is denied for insufficiency of evidence. 6
This reversal was aimed by the Supreme Court in a minute
resolution dated August 1, 1977. 7
On February 6, 1978, the lower court, pursuant to the reversal by
the Appellate Court in CA-G.R. No. 42228-R issued an order which
required the Arandas (plaintiffs in execution) to re convey to
private respondents within five (5) days from notice the
properties transferred to them by virtue of the writ of execution
pending appeal, with the exception of the property covered by
TCT No. 98052, and authorized the clerk of court to execute the
proper documents of reconveyance should the Arandas fail to
comply. The order further required the petitioners to return to
private respondent Marcelo de Lara the jeepney which was levied
on execution or to turn over the proceeds of the sale thereof, and
to reimburse the latter in the sum of P 42,159.00 which had been
garnished from Tecson Chemical Corporation.
On June 26, 1978, the clerk of court executed the deed of
reconveyance in favor of private respondents (defendants) with
respect to the lots covered by TCT Nos. all of the Bulacan Registry
of Deeds. Thereafter, on September 25, 1978, the De Laras et al.
filed a motion to nullify the aforesaid sixteen (16) titles to the
disputed properties for failure and/or refusal of the Arandas to
surrender their owner's copy of the said titles to the Register of
Deeds in order that new ones could be issued in favor of private
respondents.
After hearing the arguments of both parties in said motion to
nullify the titles, the lower court, on March 15, 1979, issued an
order cancelling TCT Nos. 98050, 98062, 38605, 98059, 98061
and 42055 but denied the motion of private respondents to nullify
TCT Nos. issued in favor of Alfredo Cruz and Aurelia Oxiles
respectively, without prejudice to private respondents' filing a
separate action for their invalidation. 8
Having failed in their attempt to nullify the titles now in the
names of Cruz and Oxiles, private respondents filed on January
14, 1980 an amended motion for restitution with motion for
contempt, which motions were rejected by the trial court in its
order dated August 21, 1980. 9 The court opined that the
consolidated ownership of said realty in the names of mortgagees
Cruz and Oxiles could no longer be disturbed in said proceedings.
However, this would not bar the De Laras, et al. from going after
the Arandas in a separate direct action to seek redress for the
former's inability to recover the said properties now in the names
of Cruz and Oxiles. 10
On August 9, 1982, private respondents (De Laras et al.) filed a
special civil action for certiorari and mandamusbefore the Court
though actual authority had been given for its receipt. Likewise, if
payment is made to one who by law is authorized to act for the
creditor, it will work a discharge. The receipt of money due on
ajudgment by an officer authorized by law to accept it will,
therefore, satisfy the debt.
The theory is where payment is made to a person authorized and
recognized by the creditor, the payment to such a person so
authorized is deemed payment to the creditor. Under ordinary
circumstances, payment by the judgment debtor in the case at
bar, to the sheriff should be valid payment to extinguish the
judgment debt.
There are circumstances in this case, however, which compel a
different conclusion. The payment made by the petitioner to the
absconding sheriff was not in cash or legal tender but in checks.
The checks were not payable to Amelia Tan or Able Printing Press
but to the absconding sheriff. Did such payments extinguish
the judgment debt?
Article 1249 of the Civil Code provides: The payment of debts in
money shall be made in the currency stipulated, and if it is not
possible to deliver such currency, then in the currency which is
legal tender in the Philippines. The delivery of promissory notes
payable to order, or bills of exchange or other mercantile
documents shall produce the effect of payment only when they
have been cashed, or when through the fault of the creditor they
have been impaired. In the meantime, the action derived from
the original obligation shall be held in abeyance.
In the absence of an agreement, either express or implied,
payment means the discharge of a debt or obligation in money
and unless the parties so agree, a debtor has no rights, except at
his own peril, to substitute something in lieu of cash as medium
of payment of his debt . Consequently, unless authorized to do so
by law or by consent of the obligee a public officer has no
authority to accept anything other than money in payment of an
obligation under a judgment being executed. Strictly speaking,
the acceptance by the sheriff of the petitioner's checks, in the
case at bar, does not, per se, operate as a discharge of the
judgment debt.
Since a negotiable instrument is only a substitute for money and
not money, the delivery of such an instrument does not, by itself,
operate as payment . A check, whether a manager's check or
ordinary cheek, is not legal tender, and an offer of a check in
payment of a debt is not a valid tender of payment and may be
refused receipt by the obligee or creditor. Mere delivery of checks
does not discharge the obligation under a judgment. The
obligation is not extinguished and remains suspended until the
payment by commercial document is actually realized.
If bouncing checks had been issued in the name of Amelia Tan
and not the Sheriff's, there would have been no payment. After
dishonor of the checks, Ms. Tan could have run after other
properties of PAL. The theory is that she has received no value for
what had been awarded her. Because the checks were drawn in
the name of Emilio Z. Reyes, neither has she received anything.
The same rule should apply.
It is argued that if PAL had paid in cash to Sheriff Reyes, there
would have been payment in full legal contemplation. The
reasoning is logical but is it valid and proper? Logic has its limits
in decision making. We should not follow rulings to their logical
extremes if in doing so we arrive at unjust or absurd results.
In the first place, PAL did not pay in cash. It paid in cheeks.
And second, payment in cash always carries with it certain
cautions. Nobody hands over big amounts of cash in a careless
and inane manner. Mature thought is given to the possibility of
the cash being lost, of the bearer being waylaid or running off
others (secs. 29, 30, Rule 39), it is to him (or to the purchaser or
redemptioner that the payments may be made by those declared
by law as entitled to redeem (sec. 31, Rule 39); and in this
situation, it becomes his duty to accept payment and execute the
certificate of redemption. It is also to the sheriff that "written
notice of any redemption must be given and a duplicate filed with
the registrar of deeds of the province, and if any assessments or
taxes are paid by the redemptioner or if he has or acquires any
lien other than that upon which the redemption was made, notice
thereof must in like manner be given to the officer and filed with
the registrar of deeds," the effect of failure to file such notice
being that redemption may be made without paying such
assessments, taxes, or liens.
The sheriff may likewise be appointed a receiver of the property
of the judgment debtor where the appointment of the receiver is
deemed necessary for the execution of the judgment (sec. 32,
Rule 39). At any time before the sale of property on execution,
the judgment debtor may prevent the sale by paying the sheriff
the amount required by the execution and the costs that have
been incurred therein (sec. 20, Rule 39).
The sheriff is also authorized to receive payments on account of
the judgment debt tendered by "a person indebted to the
judgment debtor," and his "receipt shall be a sufficient discharge
for the amount so paid or directed to be credited by the judgment
creditor on the execution" (sec. 41, Rule 39).
Now, obviously, the sheriff s sale extinguishes the liability of the
judgment debtor either in fun, if the price paid by the highest
bidder is equal to, or more than the amount of the judgment
or pro tanto if the price fetched at the sale be less. Such
extinction is not in any way dependent upon the judgment
creditor's receiving the amount realized, so that the conversion or
embezzlement of the proceeds of the sale by the sheriff does not
revive the judgment debt or render the judgment creditor liable
anew therefor.
So, also, the taking by the sheriff of, say, personal property from
the judgment debtor for delivery to the judgment creditor, in
fulfillment of the verdict against him, extinguishes the debtor's
liability; and the conversion of said property by the sheriff, does
not make said debtor responsible for replacing the property or
paying the value thereof.
In the instances where the Rules allow or direct payments to be
made to the sheriff, the payments may be made by check, but it
goes without saying that if the sheriff so desires, he may require
payment to be made in lawful money. If he accepts the check, he
places himself in a position where he would be liable to the
judgment creditor if any damages are suffered by the latter as a
result of the medium in which payment was made (Javellana v.
Mirasol, et al., 40 Phil. 761). The validity of the payment made by
the judgment debtor, however, is in no wise affected and the
latter is discharged from his obligation to the judgment creditor
as of the moment the check issued to the sheriff is encashed and
the proceeds are received by Id. office. The issuance of the check
to a person authorized to receive it (Art. 1240, Civil Code; See. 46
of the Code of Civil Procedure; Enage v. Vda y Hijos de Escano, 38
Phil. 657, cited in Javellana v. Mirasol, 40 Phil. 761) operates to
release the judgment debtor from any further obligations on the
judgment.
The sheriff is an adjunct of the court; a court functionary whose
competence involves both discretion and personal liability
(concurring opinion of J. Fernando, citing Uy Piaoco v. Osmena, 9
Phil. 299, in Bagatsing v. Herrera, 65 SCRA 434). Being an officer
of the court and acting within the scope of his authorized
functions, the sheriff s receipt of the checks in payment of the
judgment execution, may be deemed, in legal contemplation, as
received by the court itself (Lara v. Bayona, 10 May 1955, No. L10919).