G.R. No.

156364

September 3, 2007

JACOBUS BERNHARD HULST, petitioner,

vs.
PR BUILDERS, INC., respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court assailing the Decision1 dated October 30, 2002 of the Court of Appeals (CA) in CA-G.R.
SP No. 60981.
The facts:
Jacobus Bernhard Hulst (petitioner) and his spouse Ida Johanna Hulst-Van Ijzeren (Ida), Dutch
nationals, entered into a Contract to Sell with PR Builders, Inc. (respondent), for the purchase of
a 210-sq m residential unit in respondent's townhouse project in Barangay Niyugan, Laurel,
Batangas.
When respondent failed to comply with its verbal promise to complete the project by June 1995,
the spouses Hulst filed before the Housing and Land Use Regulatory Board (HLURB) a
complaint for rescission of contract with interest, damages and attorney's fees, docketed as
HLRB Case No. IV6-071196-0618.
On April 22, 1997, HLURB Arbiter Ma. Perpetua Y. Aquino (HLURB Arbiter) rendered a
Decision2 in favor of spouses Hulst, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the
complainant, rescinding the Contract to Sell and ordering respondent to:
1) Reimburse complainant the sum of P3,187,500.00, representing the purchase price
paid by the complainants to P.R. Builders, plus interest thereon at the rate of twelve
percent (12%) per annum from the time complaint was filed;
2) Pay complainant the sum of P297,000.00 as actual damages;
3) Pay complainant the sum of P100,000.00 by way of moral damages;
4) Pay complainant the sum of P150,000.00 as exemplary damages;
5) P50,000.00 as attorney's fees and for other litigation expenses; and
6) Cost of suit.
SO ORDERED.3
Meanwhile, spouses Hulst divorced. Ida assigned her rights over the purchased property to
petitioner.4 From then on, petitioner alone pursued the case.
On August 21, 1997, the HLURB Arbiter issued a Writ of Execution addressed to the Ex-Officio
Sheriff of the Regional Trial Court of Tanauan, Batangas directing the latter to execute its
judgment.5

On April 13, 1998, the Ex-Officio Sheriff proceeded to implement the Writ of Execution. However,
upon complaint of respondent with the CA on a Petition for Certiorari and Prohibition, the levy
made by the Sheriff was set aside, requiring the Sheriff to levy first on respondent's personal
properties.6 Sheriff Jaime B. Ozaeta (Sheriff) tried to implement the writ as directed but the writ
was returned unsatisfied.7
On January 26, 1999, upon petitioner's motion, the HLURB Arbiter issued an Alias Writ of
Execution.8
On March 23, 1999, the Sheriff levied on respondent's 15 parcels of land covered by 13 Transfer
Certificates of Title (TCT)9 in Barangay Niyugan, Laurel, Batangas.10
In a Notice of Sale dated March 27, 2000, the Sheriff set the public auction of the levied
properties on April 28, 2000 at 10:00 a.m..11
Two days before the scheduled public auction or on April 26, 2000, respondent filed an Urgent
Motion to Quash Writ of Levy with the HLURB on the ground that the Sheriff made an overlevy
since the aggregate appraised value of the levied properties at P6,500.00 per sq m
is P83,616,000.00, based on the Appraisal Report12 of Henry Hunter Bayne Co., Inc. dated
December 11, 1996, which is over and above the judgment award.13
At 10:15 a.m. of the scheduled auction date of April 28, 2000, respondent's counsel objected to
the conduct of the public auction on the ground that respondent's Urgent Motion to Quash Writ of
Levy was pending resolution. Absent any restraining order from the HLURB, the Sheriff
proceeded to sell the 15 parcels of land. Holly Properties Realty Corporation was the winning
bidder for all 15 parcels of land for the total amount ofP5,450,653.33. The sum of P5,313,040.00
was turned over to the petitioner in satisfaction of the judgment award after deducting the legal
fees.14
At 4:15 p.m. of the same day, while the Sheriff was at the HLURB office to remit the legal fees
relative to the auction sale and to submit the Certificates of Sale15 for the signature of HLURB
Director Belen G. Ceniza (HLURB Director), he received the Order dated April 28, 2000 issued
by the HLURB Arbiter to suspend the proceedings on the matter.16
Four months later, or on August 28, 2000, the HLURB Arbiter and HLURB Director issued an
Order setting aside the sheriff's levy on respondent's real properties,17 reasoning as follows:
While we are not making a ruling that the fair market value of the levied properties is
PhP6,500.00 per square meter (or an aggregate value of PhP83,616,000.00) as
indicated in the Hunter Baynes Appraisal Report, we definitely cannot agree with the
position of the Complainants and the Sheriff that the aggregate value of the 12,864.00square meter levied properties is only around PhP6,000,000.00. The disparity between
the two valuations are [sic] so egregious that the Sheriff should have looked into the
matter first before proceeding with the execution sale of the said properties, especially
when the auction sale proceedings was seasonably objected by Respondent's counsel,
Atty. Noel Mingoa. However, instead of resolving first the objection timely posed by Atty.
Mingoa, Sheriff Ozaete totally disregarded the objection raised and, posthaste, issued
the corresponding Certificate of Sale even prior to the payment of the legal fees (pars. 7
& 8, Sheriff's Return).
While we agree with the Complainants that what is material in an execution sale
proceeding is the amount for which the properties were bidded and sold during the public
auction and that, mere inadequacy of the price is not a sufficient ground to annul the
sale, the court is justified to intervene where the inadequacy of the price shocks the
conscience (Barrozo vs. Macaraeg, 83 Phil. 378). The difference between
PhP83,616,000.00 and Php6,000,000.00 is PhP77,616,000.00 and it definitely invites our

attention to look into the proceedings had especially so when there was only one bidder,
the HOLLY PROPERTIES REALTY CORPORATION represented by Ma, Chandra
Cacho (par. 7, Sheriff's Return) and the auction sale proceedings was timely objected by
Respondent's counsel (par. 6, Sheriff's Return) due to the pendency of the Urgent Motion
to Quash the Writ of Levy which was filed prior to the execution sale.
Besides, what is at issue is not the value of the subject properties as determined
during the auction sale, but the determination of the value of the properties levied
upon by the Sheriff taking into consideration Section 9(b) of the 1997 Rules of Civil
Procedure x x x.
xxxx
It is very clear from the foregoing that, even during levy, the Sheriff has to consider the
fair market value of the properties levied upon to determine whether they are sufficient to
satisfy the judgment, and any levy in excess of the judgment award is void (Buan v. Court
of Appeals, 235 SCRA 424).
x x x x18 (Emphasis supplied).
The dispositive portion of the Order reads:
WHEREFORE, the levy on the subject properties made by the Ex-Officio Sheriff of the
RTC of Tanauan, Batangas, is hereby SET ASIDE and the said Sheriff is hereby directed
to levy instead Respondent's real properties that are reasonably sufficient to enforce its
final and executory judgment, this time, taking into consideration not only the value of the
properties as indicated in their respective tax declarations, but also all the other
determinants at arriving at a fair market value, namely: the cost of acquisition, the current
value of like properties, its actual or potential uses, and in the particular case of lands,
their size, shape or location, and the tax declarations thereon.
SO ORDERED.19
A motion for reconsideration being a prohibited pleading under Section 1(h), Rule IV of the 1996
HLURB Rules and Procedure, petitioner filed a Petition for Certiorari and Prohibition with the CA
on September 27, 2000.
On October 30, 2002, the CA rendered herein assailed Decision20 dismissing the petition. The
CA held that petitioner's insistence that Barrozo v. Macaraeg21 does not apply since said case
stated that "when there is a right to redeem inadequacy of price should not be material" holds no
water as what is obtaining in this case is not "mere inadequacy," but an inadequacy that shocks
the senses; that Buan v. Court of Appeals22 properly applies since the questioned levy covered
15 parcels of land posited to have an aggregate value of P83,616,000.00 which shockingly
exceeded the judgment debt of only around P6,000,000.00.
Without filing a motion for reconsideration,23 petitioner took the present recourse on the sole
ground that:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE
ARBITER'S ORDER SETTING ASIDE THE LEVY MADE BY THE SHERIFF ON THE
SUBJECT PROPERTIES.24
Before resolving the question whether the CA erred in affirming the Order of the HLURB setting
aside the levy made by the sheriff, it behooves this Court to address a matter of public and
national importance which completely escaped the attention of the HLURB Arbiter and the CA:

petitioner and his wife are foreign nationals who are disqualified under the Constitution from
owning real property in their names.
Section 7 of Article XII of the 1987 Constitution provides:
Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred
or conveyed except to individuals, corporations, or associations qualified to acquire
or hold lands of the public domain. (Emphasis supplied).
The capacity to acquire private land is made dependent upon the capacity to acquire or hold
lands of the public domain. Private land may be transferred or conveyed only to individuals or
entities "qualified to acquire lands of the public domain." The 1987 Constitution reserved the right
to participate in the disposition, exploitation, development and utilization of lands of the public
domain for Filipino citizens25 or corporations at least 60 percent of the capital of which is owned
by Filipinos.26 Aliens, whether individuals or corporations, have been disqualified from acquiring
public lands; hence, they have also been disqualified from acquiring private lands.27
Since petitioner and his wife, being Dutch nationals, are proscribed under the Constitution from
acquiring and owning real property, it is unequivocal that the Contract to Sell entered into by
petitioner together with his wife and respondent is void. Under Article 1409 (1) and (7) of the Civil
Code, all contracts whose cause, object or purpose is contrary to law or public policy and those
expressly prohibited or declared void by law are inexistent and void from the beginning. Article
1410 of the same Code provides that the action or defense for the declaration of the inexistence
of a contract does not prescribe. A void contract is equivalent to nothing; it produces no civil
effect.28It does not create, modify or extinguish a juridical relation.29
Generally, parties to a void agreement cannot expect the aid of the law; the courts leave them as
they are, because they are deemed in pari delicto or "in equal fault."30 In pari delicto is "a
universal doctrine which holds that no action arises, in equity or at law, from an illegal contract;
no suit can be maintained for its specific performance, or to recover the property agreed to be
sold or delivered, or the money agreed to be paid, or damages for its violation; and where the
parties are in pari delicto, no affirmative relief of any kind will be given to one against the other."31
This rule, however, is subject to exceptions32 that permit the return of that which may have been
given under a void contract to: (a) the innocent party (Arts. 1411-1412, Civil Code);33 (b) the
debtor who pays usurious interest (Art. 1413, Civil Code);34 (c) the party repudiating the void
contract before the illegal purpose is accomplished or before damage is caused to a third
person and if public interest is subserved by allowing recovery (Art. 1414, Civil
Code);35 (d) the incapacitated party if the interest of justice so demands (Art. 1415, Civil
Code);36 (e) the party for whose protection the prohibition by law is intended if the agreement is
not illegal per se but merely prohibited and if public policy would be enhanced by permitting
recovery (Art. 1416, Civil Code);37 and (f) the party for whose benefit the law has been intended
such as in price ceiling laws (Art. 1417, Civil Code)38 and labor laws (Arts. 1418-1419, Civil
Code).39
It is significant to note that the agreement executed by the parties in this case is a Contract to
Sell and not a contract of sale. A distinction between the two is material in the determination of
when ownership is deemed to have been transferred to the buyer or vendee and, ultimately, the
resolution of the question on whether the constitutional proscription has been breached.
In a contract of sale, the title passes to the buyer upon the delivery of the thing sold. The vendor
has lost and cannot recover the ownership of the property until and unless the contract of sale is
itself resolved and set aside.40 On the other hand, a contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the vendor's obligation to transfer title is subordinated to
the happening of a future and uncertain event, so that if the suspensive condition does not take
place, the parties would stand as if the conditional obligation had never existed.41 In other words,

in a contract to sell, the prospective seller agrees to transfer ownership of the property to the
buyer upon the happening of an event, which normally is the full payment of the purchase price.
But even upon the fulfillment of the suspensive condition, ownership does not automatically
transfer to the buyer. The prospective seller still has to convey title to the prospective buyer by
executing a contract of absolute sale.42
Since the contract involved here is a Contract to Sell, ownership has not yet transferred to the
petitioner when he filed the suit for rescission. While the intent to circumvent the constitutional
proscription on aliens owning real property was evident by virtue of the execution of the Contract
to Sell, such violation of the law did not materialize because petitioner caused the rescission of
the contract before the execution of the final deed transferring ownership.
Thus, exception (c) finds application in this case. Under Article 1414, one who repudiates the
agreement and demands his money before the illegal act has taken place is entitled to recover.
Petitioner is therefore entitled to recover what he has paid, although the basis of his claim for
rescission, which was granted by the HLURB, was not the fact that he is not allowed to acquire
private land under the Philippine Constitution. But petitioner is entitled to the recovery only of the
amount of P3,187,500.00, representing the purchase price paid to respondent. No damages may
be recovered on the basis of a void contract; being nonexistent, the agreement produces no
juridical tie between the parties involved.43 Further, petitioner is not entitled to actual as well as
interests thereon,44 moral and exemplary damages and attorney's fees.
The Court takes into consideration the fact that the HLURB Decision dated April 22, 1997 has
long been final and executory. Nothing is more settled in the law than that a decision that has
acquired finality becomes immutable and unalterable and may no longer be modified in any
respect even if the modification is meant to correct erroneous conclusions of fact or law and
whether it was made by the court that rendered it or by the highest court of the land.45 The only
recognized exceptions to the general rule are the correction of clerical errors, the so-called nunc
pro tunc entries which cause no prejudice to any party, void judgments, and whenever
circumstances transpire after the finality of the decision rendering its execution unjust and
inequitable.46 None of the exceptions is present in this case. The HLURB decision cannot be
considered a void judgment, as it was rendered by a tribunal with jurisdiction over the subject
matter of the complaint.47
Ineluctably, the HLURB Decision resulted in the unjust enrichment of petitioner at the expense of
respondent. Petitioner received more than what he is entitled to recover under the
circumstances.
Article 22 of the Civil Code which embodies the maxim, nemo ex alterius incommode debet
lecupletari (no man ought to be made rich out of another's injury), states:
Art. 22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.
The above-quoted article is part of the chapter of the Civil Code on Human Relations, the
provisions of which were formulated as basic principles to be observed for the rightful
relationship between human beings and for the stability of the social order; designed to indicate
certain norms that spring from the fountain of good conscience; guides for human conduct that
should run as golden threads through society to the end that law may approach its supreme ideal
which is the sway and dominance of justice.48 There is unjust enrichment when a person unjustly
retains a benefit at the loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good conscience.49
A sense of justice and fairness demands that petitioner should not be allowed to benefit from his
act of entering into a contract to sell that violates the constitutional proscription.

This is not a case of equity overruling or supplanting a positive provision of law or judicial rule.
Rather, equity is exercised in this case "as the complement of legal jurisdiction [that] seeks to
reach and to complete justice where courts of law, through the inflexibility of their rules and want
of power to adapt their judgments to the special circumstances of cases, are incompetent to do
so."50
The purpose of the exercise of equity jurisdiction in this case is to prevent unjust enrichment and
to ensure restitution. Equity jurisdiction aims to do complete justice in cases where a court of law
is unable to adapt its judgments to the special circumstances of a case because of the inflexibility
of its statutory or legal jurisdiction.51
The sheriff delivered to petitioner the amount of P5,313,040.00 representing the net proceeds
(bidded amount isP5,450,653.33) of the auction sale after deducting the legal fees in the amount
of P137,613.33.52 Petitioner is only entitled to P3,187,500.00, the amount of the purchase price
of the real property paid by petitioner to respondent under the Contract to Sell. Thus, the Court in
the exercise of its equity jurisdiction may validly order petitioner to return the excess amount
of P2,125,540.00.
The Court shall now proceed to resolve the single issue raised in the present petition: whether
the CA seriously erred in affirming the HLURB Order setting aside the levy made by the Sheriff
on the subject properties.
Petitioner avers that the HLURB Arbiter and Director had no factual basis for pegging the fair
market value of the levied properties at P6,500.00 per sq m or P83,616,000.00; that reliance on
the appraisal report was misplaced since the appraisal was based on the value of land in
neighboring developed subdivisions and on the assumption that the residential unit appraised
had already been built; that the Sheriff need not determine the fair market value of the subject
properties before levying on the same since what is material is the amount for which the
properties were bidded and sold during the public auction; that the pendency of any motion is not
a valid ground for the Sheriff to suspend the execution proceedings and, by itself, does not have
the effect of restraining the Sheriff from proceeding with the execution.
Respondent, on the other hand, contends that while it is true that the HLURB Arbiter and Director
did not categorically state the exact value of the levied properties, said properties cannot just
amount to P6,000,000.00; that the HLURB Arbiter and Director correctly held that the value
indicated in the tax declaration is not the sole determinant of the value of the property.
The petition is impressed with merit.
If the judgment is for money, the sheriff or other authorized officer must execute the same
pursuant to the provisions of Section 9, Rule 39 of the Revised Rules of Court, viz:
Sec. 9. Execution of judgments for money, how enforced.
(a) Immediate payment on demand. - The officer shall enforce an execution of a
judgment for money by demanding from the judgment obligor the immediate payment of
the full amount stated in the writ of execution and all lawful fees. x x x
(b) Satisfaction by levy. - If the judgment obligor cannot pay all or part of the obligation in
cash, certified bank check or other mode of payment acceptable to the judgment
obligee, the officer shall levy upon the properties of the judgment obligor of every
kind and nature whatsoever which may be disposed of for value and not otherwise
exempt from execution, giving the latter the option to immediately choose which
property or part thereof may be levied upon, sufficient to satisfy the judgment. If the
judgment obligor does not exercise the option, the officer shall first levy on the personal

properties, if any, and then on the real properties if the personal properties are
insufficient to answer for the judgment.
The sheriff shall sell only a sufficient portion of the personal or real property of the
judgment obligor which has been levied upon.
When there is more property of the judgment obligor than is sufficient to satisfy
the judgment and lawful fees, he must sell only so much of the personal or real
property as is sufficient to satisfy the judgment and lawful fees.
Real property, stocks, shares, debts, credits, and other personal property, or any
interest in either real or personal property, may be levied upon in like manner and with
like effect as under a writ of attachment (Emphasis supplied).53
Thus, under Rule 39, in executing a money judgment against the property of the judgment
debtor, the sheriff shall levy on all property belonging to the judgment debtor as is amply
sufficient to satisfy the judgment and costs, and sell the same paying to the judgment creditor so
much of the proceeds as will satisfy the amount of the judgment debt and costs. Any excess in
the proceeds shall be delivered to the judgment debtor unless otherwise directed by the
judgment or order of the court.54
Clearly, there are two stages in the execution of money judgments. First, the levy and then the
execution sale.
Levy has been defined as the act or acts by which an officer sets apart or appropriates a part or
the whole of a judgment debtor's property for the purpose of satisfying the command of the writ
of execution.55 The object of a levy is to take property into the custody of the law, and thereby
render it liable to the lien of the execution, and put it out of the power of the judgment debtor to
divert it to any other use or purpose.56
On the other hand, an execution sale is a sale by a sheriff or other ministerial officer under the
authority of a writ of execution of the levied property of the debtor.57
In the present case, the HLURB Arbiter and Director gravely abused their discretion in setting
aside the levy conducted by the Sheriff for the reason that the auction sale conducted by the
sheriff rendered moot and academic the motion to quash the levy. The HLURB Arbiter lost
jurisdiction to act on the motion to quash the levy by virtue of the consummation of the auction
sale. Absent any order from the HLURB suspending the auction sale, the sheriff rightfully
proceeded with the auction sale. The winning bidder had already paid the winning bid. The legal
fees had already been remitted to the HLURB. The judgment award had already been turned
over to the judgment creditor. What was left to be done was only the issuance of the
corresponding certificates of sale to the winning bidder. In fact, only the signature of the HLURB
Director for that purpose was needed58 a purely ministerial act.
A purely ministerial act or duty is one which an officer or tribunal performs in a given state of
facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard for
or the exercise of his own judgment upon the propriety or impropriety of the act done. If the law
imposes a duty upon a public officer and gives him the right to decide how or when the duty shall
be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the
discharge of the same requires neither the exercise of official discretion nor judgment.59In the
present case, all the requirements of auction sale under the Rules have been fully complied with
to warrant the issuance of the corresponding certificates of sale.
And even if the Court should go into the merits of the assailed Order, the petition is meritorious
on the following grounds:

Firstly, the reliance of the HLURB Arbiter and Director, as well as the CA, on Barrozo v.
Macaraeg60 and Buan v. Court of Appeals61 is misplaced.
The HLURB and the CA misconstrued the Court's pronouncements in Barrozo. Barrozo involved
a judgment debtor who wanted to repurchase properties sold at execution beyond the one-year
redemption period. The statement of the Court in Barrozo, that "only where such inadequacy
shocks the conscience the courts will intervene," is at best a mere obiter dictum. This declaration
should be taken in the context of the other declarations of the Court in Barrozo, to wit:
Another point raised by appellant is that the price paid at the auction sale was so
inadequate as to shock the conscience of the court. Supposing that this issue is open
even after the one-year period has expired and after the properties have passed into the
hands of third persons who may have paid a price higher than the auction sale money,
the first thing to consider is that the stipulation contains no statement of the reasonable
value of the properties; and although defendant' answer avers that the assessed value
wasP3,960 it also avers that their real market value was P2,000 only. Anyway, mere
inadequacy of price which was the complaint' allegation is not sufficient
ground to annul the sale. It is only where such inadequacy shocks the conscience
that the courts will intervene. x x x Another consideration is that the assessed value
being P3,960 and the purchase price being in effect P1,864 (P464 sale price plusP1,400
mortgage lien which had to be discharged) the conscience is not shocked upon
examining the prices paid in the sales in National Bank v. Gonzales, 45 Phil., 693
and Guerrero v. Guerrero, 57 Phil., 445, sales which were left undisturbed by this Court.
Furthermore, where there is the right to redeem as in this case inadequacy of
price should not be material because the judgment debtor may re-acquire the
property or else sell his right to redeem and thus recover any loss he claims to
have suffered by reason of the price obtained at the execution sale.
x x x x (Emphasis supplied).62
In other words, gross inadequacy of price does not nullify an execution sale. In an ordinary sale,
for reason of equity, a transaction may be invalidated on the ground of inadequacy of price, or
when such inadequacy shocks one's conscience as to justify the courts to interfere; such does
not follow when the law gives the owner the right to redeem as when a sale is made at public
auction,63 upon the theory that the lesser the price, the easier it is for the owner to effect
redemption.64 When there is a right to redeem, inadequacy of price should not be material
because the judgment debtor may re-acquire the property or else sell his right to redeem and
thus recover any loss he claims to have suffered by reason of the price obtained at the execution
sale.65 Thus, respondent stood to gain rather than be harmed by the low sale value of the
auctioned properties because it possesses the right of redemption. More importantly, the subject
matter in Barrozo is the auction sale, not the levy made by the Sheriff.
The Court does not sanction the piecemeal interpretation of a decision. To get the true intent and
meaning of a decision, no specific portion thereof should be isolated and resorted to, but the
decision must be considered in its entirety.66
As regards Buan, it is cast under an entirely different factual milieu. It involved the levy on two
parcels of land owned by the judgment debtor; and the sale at public auction of one was
sufficient to fully satisfy the judgment, such that the levy and attempted execution of the second
parcel of land was declared void for being in excess of and beyond the original judgment award
granted in favor of the judgment creditor.
In the present case, the Sheriff complied with the mandate of Section 9, Rule 39 of the Revised
Rules of Court, to "sell only a sufficient portion" of the levied properties "as is sufficient to satisfy
the judgment and the lawful fees." Each of the 15 levied properties was successively bidded

upon and sold, one after the other until the judgment debt and the lawful fees were fully satisfied.
Holly Properties Realty Corporation successively bidded upon and bought each of the levied
properties for the total amount of P5,450,653.33 in full satisfaction of the judgment award and
legal fees.67
Secondly, the Rules of Court do not require that the value of the property levied be exactly the
same as the judgment debt; it can be less or more than the amount of debt. This is the
contingency addressed by Section 9, Rule 39 of the Rules of Court. In the levy of property, the
Sheriff does not determine the exact valuation of the levied property. Under Section 9, Rule 39,
in conjunction with Section 7, Rule 57 of the Rules of Court, the sheriff is required to do only two
specific things to effect a levy upon a realty: (a) file with the register of deeds a copy of the order
of execution, together with the description of the levied property and notice of execution; and (b)
leave with the occupant of the property copy of the same order, description and notice.68 Records
do not show that respondent alleged non-compliance by the Sheriff of said requisites.
Thirdly, in determining what amount of property is sufficient out of which to secure satisfaction of
the execution, the Sheriff is left to his own judgment. He may exercise a reasonable discretion,
and must exercise the care which a reasonably prudent person would exercise under like
conditions and circumstances, endeavoring on the one hand to obtain sufficient property to
satisfy the purposes of the writ, and on the other hand not to make an unreasonable and
unnecessary levy.69 Because it is impossible to know the precise quantity of land or other
property necessary to satisfy an execution, the Sheriff should be allowed a reasonable margin
between the value of the property levied upon and the amount of the execution; the fact that the
Sheriff levies upon a little more than is necessary to satisfy the execution does not render his
actions improper.70 Section 9, Rule 39, provides adequate safeguards against excessive levying.
The Sheriff is mandated to sell so much only of such real property as is sufficient to satisfy the
judgment and lawful fees.
In the absence of a restraining order, no error, much less abuse of discretion, can be imputed to
the Sheriff in proceeding with the auction sale despite the pending motion to quash the levy filed
by the respondents with the HLURB. It is elementary that sheriffs, as officers charged with the
delicate task of the enforcement and/or implementation of judgments, must, in the absence of a
restraining order, act with considerable dispatch so as not to unduly delay the administration of
justice; otherwise, the decisions, orders, or other processes of the courts of justice and the like
would be futile.71 It is not within the jurisdiction of the Sheriff to consider, much less resolve,
respondent's objection to the continuation of the conduct of the auction sale. The Sheriff has no
authority, on his own, to suspend the auction sale. His duty being ministerial, he has no
discretion to postpone the conduct of the auction sale.
Finally, one who attacks a levy on the ground of excessiveness carries the burden of sustaining
that contention.72In the determination of whether a levy of execution is excessive, it is proper to
take into consideration encumbrances upon the property, as well as the fact that a forced sale
usually results in a sacrifice; that is, the price demanded for the property upon a private sale is
not the standard for determining the excessiveness of the levy.73
Here, the HLURB Arbiter and Director had no sufficient factual basis to determine the value of
the levied property. Respondent only submitted an Appraisal Report, based merely on surmises.
The Report was based on the projected value of the townhouse project after it shall have been
fully developed, that is, on the assumption that the residential units appraised had already been
built. The Appraiser in fact made this qualification in its Appraisal Report: "[t]he property subject
of this appraisal has not been constructed. The basis of the appraiser is on the existing model
units."74 Since it is undisputed that the townhouse project did not push through, the projected
value did not become a reality. Thus, the appraisal value cannot be equated with the fair market
value. The Appraisal Report is not the best proof to accurately show the value of the levied
properties as it is clearly self-serving.

Therefore, the Order dated August 28, 2000 of HLURB Arbiter Aquino and Director Ceniza in
HLRB Case No. IV6-071196-0618 which set aside the sheriff's levy on respondent's real
properties, was clearly issued with grave abuse of discretion. The CA erred in affirming said
Order.
WHEREFORE, the instant petition is GRANTED. The Decision dated October 30, 2002 of the
Court of Appeals in CA-G.R. SP No. 60981 is REVERSED and SET ASIDE. The Order dated
August 28, 2000 of HLURB Arbiter Ma. Perpetua Y. Aquino and Director Belen G. Ceniza in
HLRB Case No. IV6-071196-0618 is declared NULL andVOID. HLURB Arbiter Aquino and
Director Ceniza are directed to issue the corresponding certificates of sale in favor of the winning
bidder, Holly Properties Realty Corporation. Petitioner is ordered to return to respondent the
amount of P2,125,540.00, without interest, in excess of the proceeds of the auction sale
delivered to petitioner. After the finality of herein judgment, the amount of P2,125,540.00 shall
earn 6% interest until fully paid.
SO ORDERED.
Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

REVELINA LIMSON,
Petitioner,

G.R. No. 188802

Present:
CARPIO MORALES, Chairperson, J.,
BRION,
PERALTA*
VILLARAMA, JR., and
MENDOZA,** JJ.

- versus -

WACK WACK CONDOMINIUM

CORPORATION,
Respondent.

Promulgated:
February 14, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

CARPIO MORALES, J.

On January 22, 1996, Revelina Limson[1] (Revelina) purchased from Conchita

Benitez an apartment unit (Unit 703) at Wack Wack Apartments, Wack Wack
Road,Mandaluyong City.

Upon moving in, Revelina noticed defects in the electrical main panel located
inside the unit, drawing her to report them, by letter of February 22, 1996, to the
Wack Wack Condominium Corporation (respondent), a non-stock corporation
organized for the purpose of holding title to and managing the common areas of
Wack Wack Apartments
Racquel Gonzalez, who sits as Member of respondents Board of Directors,
replied by letter of February 23, 1996 that under Section 3 of the House Rules
and Regulations, it is the duty of the unit owner to maintain the electrical and
plumbing systems at his/her expense.
By still another letter dated February 28, 1996, Revelina informed respondent that
the switch board is such that No. 12 wire is protected by 30 ampere fuse and that
five appliances refrigerator, freezer, iron, dryer and washing machine are
connected to only one fuse.
Revelina later sought professional assistance from a private electrical consultant,
Romago, Incorporated. It was concluded that the wirings in Unit 703 are unsafe,
hazardous and did not comply with the Philippine Electrical Code.
On Revelinas request, the City Building Office conducted an inspection of Unit
703 following which a Report dated January 21, 1997 was accomplished with the
following findings and recommendations:
Findings:
1. The load center consists of 100 A 2 pst main switch and fusible cut
out Blocks with 16 circuits. The fusible cut out block enclosure is
not provided with cover, exposing electrical live part that makes it
hazardous, unsafe and will be difficult to maintain because a portion
was blocked by a shelf.

2. The jumper cable from main safety switch to fusible cut-out blocks
used 2 #10 wire (Capt. 60 amp) per phase. This is undersized and
would overheat.
3. The fusible current protective devise where all 30 Amp., sp., 240 v
FOR 2 #12 TW (20 AMP. Capacity wire) this does not comply with
the provision of the Philippine Electrical Code that stipulates rating
of the protective devise shall be the same as the conductor ampacity
especially on a multi outlet circuit.
4. Power supply for water heaters was tapped to small appliance for
convenience outlet circuit.
Recommendation:
1. Replacement of fusible load center with panel board and circuit
breaker components to correct the problem as enumerated on items
2, 3, 4 of our findings.
2. Replace the embedded circular loom with conduit on moulding.
3. Check all grounded circuit for water heater lad.
4. Provide separate circuit for water heater lad.
5. Submit As Built Electrical Plan signed and sealed by a Professional
Electrical Engineer together with the previous approved Electrical
Plan. (emphasis and underscoring supplied)

The Report was sent by then Mayor Benjamin Abalos, Sr. to respondent
by letter dated January 31, 1997. On February 3, 1997, respondent, through
Architect Eugenio Gonzalez, wrote Revelina to demand that repairs in line with
the above-stated recommendation of the City Building Office be undertaken
within ten (10) days.
Before the deadline, respondents Board of Directors convened on February
7, 1997 and resolved to impose a daily fine of P1,000.00 on Revelina and her
husband Benjamin, to commence on February 14, 1997, should the latter fail to
comply.
Revelina and her husband refused to undertake the repairs and to pay the
fine. They claimed that the electrical main panel forms part of the common areas,
citing Section 6 ofRepublic Act No. 4726[2], AN ACT TO DEFINE
CONDOMINIUM, ESTABLISH REQUIREMENTS FOR ITS CREATION
AND GOVERNMENT OF ITS INCIDENTS, the pertinent provision of which
reads:

Sec. 6. Unless otherwise expressly provided in the enabling or

master deed or the declaration of restrictions, the incidents of a
condominium grant are as follows:
a.) x x x The following are not part of the unit: bearing walls,
columns, floors, roofs, foundations, and other common structural
elements of the buildings; lobbies, stairways, hallways and other
areas of common use, elevator equipment and shafts, central
heating, central refrigeration and central air conditioning
equipment, reservoir, tanks, pumps and other central services and
facilities, pipes, ducts, flues, chutes, conduits wires and
other utility installations, wherever located, except the outlets
thereof when located within the unit. (emphasis and underscoring
supplied)

They argued that an electrical main panel is in the nature of a utility installation.
Meanwhile, Revelina and her husband purchased an oversized
whirlpool. In the process of installation, the 7th floor utility room which is
adjacent to Unit 703 was damaged.
Revelina claimed that an agreement had been reached under which
respondent would take charge of the repair of the utility room and would bill her
for the cost incurred therefor but respondent failed to do so. Yet the Board of
Directors assessed her and her husband a fine of P1,000.00 per day until the utility
room is repaired.
Respondent thereupon filed a complaint for specific performance and
damages against Revelina and Benjamin before the Securities and Exchange
Commission (SEC) upon the following causes of action:
1. To compel the defendants (Spouses Limson) to undertake the
necessary repairs of the defective and hazardous condition of the
electrical wiring of their Unit 703 in accordance with the report and
recommendation of the Office of the Building Official of
Mandaluyong City;
2. To seek payment of liquidated damages from the defendants in
accordance with the Resolution of the Board of Directors of

plaintiff (respondent herein), starting February 15, 1997 until the

defendants shall have complied with the aforestated report and
recommendation of the building officials; and

3. To seek payment of [sic] from the defendants for the damages they
have caused to the common area of Wack Wack Apartments due to
their insistence to install in their unit an over-sized whirlpool.[3]

Pursuant to A.M. No. 00-11-03,[4] the complaint was transferred to

the Regional Trial Court (RTC) of Mandaluyong City for disposition.
As of June 30, 1997, the assessments and penalties charged against the
spouses had reached P569,736.94. On July 17, 1997, respondent filed a Notice of
Assessment with the Register of Deeds, Mandaluyong City with application for
foreclosure and public auction of Unit 703.
At the public auction held on August 28, 1997, respondent emerged as
highest bidder and thereupon purchased Unit 703 in the amount of P569,736.94,
on account of which it was issued a Certificate of Sale on September 15, 1997.
By Decision of December 22, 2003, Branch 214 of the Mandaluyong
RTC dismissed respondents complaint for lack of merit in this wise:

Guided by the findings and recommendation of the building

official of Mandaluyong City, it would appear that the
questioned electrical installations are to be considered as part of the
common area and not of Unit 703, though the same are necessarily
found inside the said unit. As contained in Section 6, par. 1 of the
Condominium Act: a) The boundary of the Unit granted are the interior
surfaces of the perimeter walls, floors, ceilings, windows and doors
thereof. The following are not part of the unit: bearing walls,
columns, floors, roofs, foundations, and other common structural
elements of the buildings; lobbies, stairways, hallways and other areas
of common use, elevator equipment and shafts,

central heating, central refrigeration and central air conditioning

equipment, reservoir, tanks, pumps and other central services and
facilities, pipes, ducts, flues, chutes, conduits wires and other utility
installations, wherever located, except the outlets thereof when
located within the unit. (underscoring supplied; emphasis in the
original)[5]

On appeal, the Court of Appeals, by Decision of December 19,

2008,[6] reversed the decision of the trial court, holding in the main that for the
electrical main panel to be considered as part of the common areas, it should have
been intended for communal use and benefit. The subject electrical main panel
being located inside the unit and its principal function being to control the flow
of electricity into the unit, the appellate court concluded that charges for its repair
cannot be for respondents account.
On the imposition of fine on the spouses Limson for failure to correct the faulty
electrical wiring despite notice, the appellate court upheld respondents authority
to enforce the same. Finding, however, that the amount of P1,000 fine per day
was excessive, it reduced the same to P200.
Respecting respondents imposition of a fine of P1,000 per day on the spouses
alleged failure to repair the 7th floor utility room, the appellate court disallowed
the same, however, it holding that respondent did not first seek reimbursement
from them before assessment.
Finally, the appellate court denied respondents prayer for actual damages in the
amount of P5,000 representing repair expenses on the utility room, it having
failed to present receipts therefor.
Her Motion for Reconsideration having been denied, Revelina filed the present
petition for review.

The Court finds for Revelina.

The pertinent provisions of the Wack Wack Apartments Master Deed

follow:
Section 5. The Common Areas. The common elements or areas of the
Project (herein referred to as the Common Areas) shall comprise all
parts of the Project other than the Units, including without limitation
the following:
xxxx
(e) All central and appurtenant equipment and installations for
common facilities and utilities such as power, light, sewerage,
drainage, garbage chute, and water connections (including all outlets,
pipes, ducts, wires, cables and conduits used in connection therewith,
whether located in Common Areas or in Units); all elevators, elevator
shafts, tanks, pumps, motors, fans, compressors, and control
equipment; all common utility spaces and areas;
(f) All other parts of the Project and all apparatus, equipment
and installations therein which are for common use or necessary or
convenient for the existence, maintenance of safety of the Project.
(emphasis and underscoring supplied)
Section 3. Maintenance, Repairs and Alterations. (a) All
maintenance of and repairs of any Unit (other than the
maintenance of and repairs to any of the Common Areas contained
therein not necessitated by the act or negligence of the owner, tenant
or occupant of such Unit) shall be made [by], and at the expense
of, the owner of such unit. Each Unit owner shall be responsible for
all damages to any other Unit and to the Common Areas resulting
from his failure to effect such maintenance and repairs. Each Unit
owner shall also be responsible for promptly reporting to the
Condominium Corporation any defect or need for repairs in any of
the Common Areas in his Unit. (emphasis and underscoring
supplied)
xxxx

Section 3 (e) of R.A. 4726 defines common areas as the entire project except all
units separately granted or held or reserved. Section 6 (a) of the same law
provides:

a.) x x x The following are not part of the unit: bearing walls,
columns, floors, roofs, foundations, and other common structural
elements of the buildings; lobbies, stairways, hallways and other
areas of common use, elevator equipment and shafts, central
heating, central refrigeration and central air conditioning
equipment, reservoir, tanks, pumps and other central services and
facilities, pipes, ducts, flues, chutes, conduits wires and
other utility installations, wherever located, except the outlets
thereof when located within the unit. (emphasis and underscoring
supplied)

The electrical panels location inside the unit notwithstanding, it is not

automatically considered as part of it. The above-quoted pertinent provisions of
the law and the master deed contemplate that common areas, e.g. utility
installations, may be situated within the unit.
Where a statute is clear, plain and free from ambiguity, it must be given its literal
meaning and applied without attempt to interpret.[7] Verba legis non est
recedendum, index animi sermo est. There should be no departure from the words
of the statute, for speech is the index of intention.
An explanation of the Apartments electrical supply system was presented by
respondent, viz:
a.)

x x x [T]he electrical system of the Apartments commences

with a common main electrical line (main line) provided by the
Apartments, connected to a Meralco line outside the building.
This common main line runs to the ground floor of the building,
where the common meter station is located; from where
individual secondary lines, are tapped to the common main
line. There are as many individual secondary lines tapped to the
common main line, as there are units. EVERY SECONDARY
LINE TRAVELS VERTICALLY TO ITS DESIGNATED
FLOOR AND LEADS TO AN INDIVIDUAL UNIT.

b.)

The construction is such, that every secondary line is

embedded within the wall of a unit, until it surfaces from the
wall, ready to supply electricity to that unit; the UNIT, in this
case, has two (2) metal boxes, inside the UNIT; both attached to
the wall of the UNIT. The first of the two (2) metal boxes is
the main switch box. (Annex B and B-1 The main switch
box has a hole, through which the secondary line enters and is

attached to the upper end of two (2) big fuses, located in the
main switch box (Annex B-1-a). The upper end of the two (2)
big fuses, where the secondary line (tapped to the main line)
ends are indicated and marked as (Annex B-1-b and B-1-c)

c.)

At the lower end of these two (2) big fuses, there are separate
electrical wires (technically called jumper cables). The jumper
cables originate in the UNITs second metal box which is the
fusible cutout box (fuse box), and the jumper cables are
connected to the lower end of the two (2) big fuses in the main
switch box to draw electricity to feed the fuse box. x x
x [8](capitalization and underscoring in the original)

In a multi-occupancy dwelling such as Apartments, limitations are imposed under

R.A. 4726[9] in accordance with the common interest and safety of the occupants
therein which at times may curtail the exercise of ownership. To maintain safe,
harmonious and secured living conditions, certain stipulations are embodied in
the duly registered deed of restrictions, in this case the Master Deed, and in house
rules which the condominium corporation, like respondent, is mandated to
implement. Upon acquisition of a unit, the owner not only affixes his conformity
to the sale; he also binds himself to a contract with other unit owners.[10]
Unquestionably, the fuse box controls the supply of electricity into the unit.
Power is sourced through jumper cables attached to the main switch which
connects the units electrical line to the Apartments common electrical line. It is
an integral component of a power utility installation. Respondent cannot disclaim
responsibility for the maintenance of the Apartments electrical supply system
solely because a component thereof is placed inside a unit.
As earlier stated, both the law and the Master Deed refer to utility installations as
forming part of the common areas, which reference is justified by practical
considerations. Repairs to correct any defects in the electrical wiring should be
under the control and supervision of respondent to ensure safety and compliance
with the Philippine Electrical Code,[11] not to mention security and peace of mind
of the unit owners

WHEREFORE, the petition is GRANTED. The Court of Appeals Decision

of December 19, 2008 is REVERSED and SET ASIDE. The Decision
of Branch 214 of the Mandaluyong Regional Trial Court dismissing the
complaint of Wack Wack Condominium Corporation against Revelina and
Benjamin Limson is, in light of the foregoing discussions, REINSTATED.
SO ORDERED.

FIRST MARBELLA CONDOMINIUM

ASSOCIATION, INC.,
Petitioner,

G.R. No. 163196

Present:
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

- versus -

Promulgated:
AUGUSTO GATMAYTAN,
Respondent.
July 4, 2008
x----------------------------------------------------------x

DECISION
AUSTRIA-MARTINEZ, J.:
From the January 7, 2004 Order[1] of the Regional Trial Court (RTC), Pasay City,
denying the request of First Marbella Condominium Association, Inc. (petitioner) for
extrajudicial foreclosure against Augusto Gatmaytan (respondent); and the March 31,
2004 RTC Order,[2] denying petitioner's Motion for Reconsideration, the latter filed
directly with this Court a Petition for Review onCertiorari under Rule 45 of the Rules of
Court on this sole ground:
The Executive Judge of the Regional TrialCourt of Pasay City gravely erred
in dismissing the petition in view of the fact that:

(A) Section. 20 of Rep. Act No. 4726, as amended, otherwise known as the
Condominium Act, expressly grant the petitioner, being the acknowledged
association of unit owners at Marbella I Condominium, the right to enforce its
liens of unpaid dues and other assessments in the same manner provided for
by law for judicial or extra-judicial foreclosure of mortgage of real property;
and
(B) Such practice of auctioning the delinguent condominium unit through
a petition for extra-judicial foreclosure of mortgage, as aforestated is
permitted in other jurisdictions, such as in the City of Manila.[3]

The factual antecedents are as follows.

Respondent is the registered owner of Fontavilla No. 501 (condominium
unit), Marbella I Condominium, Roxas Boulevard, Pasay City, under Condominium
Certificate of Title No. 1972 (CCT No. 1972).[4] Inscribed on his title is a Declaration of
Restrictions, to wit:
Entry No. 65370/T-20065 DECLARATONS OF RESTRICTIONS executed by the herein registered owner, is hereon annotated restrictions shall
be deemed to run with the land, the bldg. & other improvements making up
the project, shall constitute lien upon the project, and each unit and shall inure
to the benefit of, and be binding upon all units owners, purchasers,
interchangeably or sometimes referred to in this Master of Deed with Dec. of
Restrictions as occupant, [sic] or holding any w/o [sic] or any right or interest
therein or in the project, pursuant to the prov. of the condominium act or other
pertinent laws. See restrictions and conditions imposed on Doc. No. 114, Page
24, Bk. I, s. of 1974 of the Not. Pub. for Rizal, M. Perez, Cardenas among w/c
are those dealing on scope & coverage; Management Body; repair,
alteration et [sic] assessment real property of restrictions & bldg. rules &
waivers rights and assignee, tenants occupants of unit validity,[sic]
amendment of declaration dated March 19, 1974.
Date of inscription May 9, 1979 3:02 p.m.[5] (Emphasis supplied.)

Also inscribed is a Notice of Assessment, which states:

Entry No. 96-2466/CCT No. 1972 -NOTICE OF ASSESSMENT Executed
by MILAGROS D. CUBACUB in her capacity as Vice-President/
Administrator of FIRST MARBELLA CONDOMINIUM ASSOCIATION,
INC. (FMCAI) [herein petitioner], stating among other things that the
condominium unit, described herein has an outstanding dues with the FMCAI
in the sum of P775,786.17, inclusive of interests, penalties and attorney's fees,

which aforementioned liabilities constitute as first lien against this

condominium unit pursuant to the Master Deed of Restrictions. (Doc. No. 34;
Page No. 7; Book No. III; Series of 1996 before Notary Public Jose A. Suing,
Notary Public for Quezon City).
Date of Instrument March 27, 1996.
Date of Inscription May 3, 1996 2:10 p.m.[6]

On November 11, 2003, petitioner filed with the RTC, through the Office of the Clerk of
Court & Ex-Oficio Sheriff, a Petition[7] for extrajudicial foreclosure of the condominium
unit of respondent, alleging that it (petitioner) is a duly organized association of the
tenants and homeowners of Marbella I Condominium; that respondent is a member
thereof but has unpaid association dues amounting to P3,229,104.89, as of June 30, 2003;
and that the latter refused to pay his dues despite demand. The petition is docketed as File
Case No. 03-033. Attached to it are the June 30, 2003 Statement of Account[8] and July
22, 2000 demand letter[9] issued to respondent.
In a letter dated November 21, 2003, the Clerk of Court, as Ex-Oficio Sheriff,
recommended to the RTC Executive Judge that the petition be dismissed for the
following reasons:
Under the facts given, no mortgage exists between the petitioner and
respondent. Evidently, it is not one of those contemplated under Act 3135 as
amended by Act 4118. The allegation simply does not show a mortgagormortgagee relationship since respondent liability arises from his failure to pay
dues, assessments and charges due to the petitioner.
As clearly stated, the authority of the Executive Judge under Administrative
Matter No. 99-10-05-0, as amended dated March 1, 2001, covers extrajudicial foreclosure of real estate mortgages under R.A. No. 3135 and chattel
mortgages under P.D. No. 1508. There is nothing in the above mentioned
Circular which authorizes the Executive Judge and/or the Ex-Officio Sheriff
to extra judicially foreclose properties covered by obligations other than the
said mortgages. Hence, the subject petition is not proper for extra-judicial
foreclosure under the supervision of the Executive Judge. Dismissal of the
subject petition is recommended.[10]
Agreeing with the Clerk of Court, the RTC Executive Judge issued on January 7,
2004 the following Order:
Upon perusal of the pertinent laws and Supreme Court Resolutions, this Court
concurs with the position taken by the Ex-Oficio Sheriff that herein petition is
not within the coverage of Administrative Matter No. 99-10-05-0 as amended,
dated March 1, 2001 re: Procedure in Extra Judicial Foreclosure of Mortgage,
paragraph 1 thereof is hereby quoted as follows:

1. All applications for extra-judicial foreclosure of mortgage

whether under the direction of the sheriff or a notary public,
pursuant to Act 3135, as amended by Act 4118, and Act 1508,
as amended,shall be filed with the Executive Judge, through the
Clerk of Court who is also the Ex-Oficio Sheriff.
Hence, it is not within the authority of the Executive Judge to supervise and
approve extra judicial foreclosures of mortgages.
WHEREFORE, the request for extra-judicial foreclosure of the subject
condominium unit is DENIED. Consequently, the petition is DISMISSED.
SO ORDERED.[11] (Emphasis added.)

Petitioner filed a Motion for Reconsideration,[12] but the RTC Executive Judge denied it
in an Order[13] dated March 31, 2004.
Hence, the present petition.
Petitioner asserts that it is expressly provided under Section 20 of Republic Act (R.A.)
No. 4726 that it has the right to cause the extrajudicial foreclosure of its annotated lien on
the condominium unit. Its petition then is cognizable by the RTC under Administrative
Matter No. 99-10-05.[14]
In his Comment,[15] Supplemental Comment[16] and Memorandum,[17] respondent objects
to petitioner's direct appeal to this Court from an Order issued by the RTC on a mere
administrative matter.[18] Respondent also impugns petitioner's right to file the petition for
extra-judicial foreclosure, pointing out that the latter does not hold a real estate mortgage
on the condominium unit or a special power of attorney to cause the extra-judicial
foreclosure sale of said unit.[19] Respondent claims that there is even a pending litigation
regarding the validity of petitioner's constitution as a homeowners association and its
authority to assess association dues, annotate unpaid assessments on condominium titles
and enforce the same through extrajudicial foreclosure sale.[20] In sum, respondent
contends that petitioner has no factual or legal basis to file the petition for extrajudicial
foreclosure.
The petition lacks merit.
Only a judgment, final order or resolution rendered by a court in the exercise of its judicial
functions relative to an actual controversy is subject to an appeal to this Court by way of
a Petition for Review on Certiorari under Rule 45 of the Rules of Court.[21] The January

7, 2004 Order and March 21, 2004 Order assailed herein were issued by the RTC
Executive Judge in the exercise of his administrative function to supervise the ministerial
duty of the Clerk of Court as Ex-Oficio Sheriff in the conduct of an extrajudicial
foreclosure sale; hence, said orders are not appealable under Rule 45. Rather, the correct
mode of appeal is by petition for mandamus[22] under Section 3, Rule 65 of the Rules of
Court, to wit:
Sec. 3. Petition for mandamus When any tribunal, corporation, board, officer
or person unlawfully neglects the performance of an act which the law
specifically enjoins as a duty resulting from an office, trust, or station, or
unlawfully excludes another from the use and enjoyment of a right or office
to which such other is entitled, and there is no other plain, speedy and adequate
remedy in the ordinary course of law, the person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent, immediately
or at some other time to be specified by the court, to do the act required to be
done to protect the rights of the petitioner, and to pay the damages sustained
by the petitioner by reason of the wrongful acts of the respondent.

Although under Section 5,[23] Rule 56, an erroneous appeal may be dismissed outright,
this Court shall not exercise such option; but instead, shall treat the present petition as a
petition formandamus to obviate further litigation between the parties.[24]
Yet, in order to avail itself of a writ of mandamus, petitioner must establish that it has a
clear right to the extrajudicial foreclosure sale of the condominium unit of
respondent.[25] Under Circular No. 7-2002,[26] implementing Supreme Court
Administrative Matter No. 99-10-05-0,[27] it is mandatory that a petition for extrajudicial
foreclosure be supported by evidence that petitioner holds a special power or authority to
foreclose, thus:
Sec. 1. All applications for extra-judicial foreclosure of mortgage, whether
under the direction of the Sheriff or a notary public pursuant to Art. No. 3135,
as amended, and Act 1508, as amended, shall be filed with the Executive
Judge, through the Clerk of Court, who is also the Ex-Officio Sheriff (A.M.
No. 99-10-05-0, as amended, March 1, 2001).
Sec. 2. Upon receipt of the application, the Clerk of Court shall:
a. Examine the same to ensure that the special power of attorney authorizing
the extra-judicial foreclosure of the real property is either inserted into or
attached to the deed of real estate mortgage (Act No. 3135, Sec. 1, as
amended) x x x.

Without proof of petitioners special authority to foreclose, the Clerk of Court as

Ex-Oficio Sheriff is precluded from acting on the application for extrajudicial
foreclosure.[28]
In the present case, the only basis of petitioner for causing the extrajudicial foreclosure of
the condominium unit of respondent is a notice of assessment annotated on CCT No.
1972 in accordance with Section 20 of R.A. No. 4726. However, neither annotation nor
law vests it with sufficient authority to foreclose on the property.
The notice of assessment contains no provision for the extrajudicial foreclosure of the
condominium unit. All that it states is that the assessment of petitioner against respondent
for unpaid association dues constitutes a first lien against [the] condominium unit.[29]
Neither does Section 20 of R.A. No. 4726[30] grant petitioner special authority to
foreclose. All that the law provides is the following:
Sec. 20. The assessment upon any condominium made in accordance with a
duly registered declaration of restrictions shall be an obligation of the owner
thereof at the time the assessment is made. The amount of any such
assessment plus any other charges thereon, such as interest, costs (including
attorney's fees) and penalties, as such may be provided for in the declaration
of restrictions, shall be and become a lien upon the condominium to be
registered with the Register of Deeds of the city or province where such
condominium project is located. The notice shall state the amount of such
assessment and such other charges thereon as may be authorized by the
declaration of restrictions, a description of condominium unit against which
same has been assessed, and the name of the registered owner thereof. Such
notice shall be signed by an authorized representative of the management
body or as otherwise provided in the declaration of restrictions. Upon payment
of said assessment and charges or other satisfaction thereof, the management
body shall cause to be registered a release of the lien.
Such lien shall be superior to all other liens registered subsequent to the
registration of said notice of assessment except real property tax liens and
except that the declaration of restrictions may provide for the subordination
thereof to any other liens and encumbrances, such liens may be enforced in
the same manner provided for by law for the judicial or extra-judicial
foreclosure of mortgage or real property. Unless otherwise provided for in
the declaration of the restrictions, the management body shall have power to
bid at foreclosure sale. The condominium owner shall have the right of
redemption as in cases of judicial or extra-judicial foreclosure of
mortgages. (Emphasis supplied.)

Clearly, Section 20 merely prescribes the procedure by which petitioners claim may be
treated as a superior lien i.e., through the annotation thereof on the title of the
condominium unit.[31] While the law also grants petitioner the option to enforce said lien
through either the judicial or extrajudicial foreclosure sale of the condominium unit,
Section 20 does not by itself, ipso facto, authorize judicial as extra-judicial foreclosure of
the condominium unit. Petitioner may avail itself of either option only in the manner
provided for by the governing law and rules. As already pointed out, A.M. No. No. 9910-05-0, as implemented under Circular No. 7-2002, requires that petitioner furnish
evidence of its special authority to cause the extrajudicial foreclosure of the condominium
unit.
There being no evidence of such special authority, petitioner failed to establish a clear
right to a writ of mandamus to compel the RTC to act on its petition for extrajudicial
foreclosure.
WHEREFORE, the petition is DENIED for lack of merit.
Costs against petitioner.
SO ORDERED.