REPUBLIC OF THE PHILIPPINES

National Capital Judicial Region

METROPOLITAN TRIAL COURT
Branch 47, Pasay City

SPS. SALVADOR PRADO AND

EMERITA PRADO,
Plaintiffs,
Civil Case No. 528-05 CFM
-versus- For: Ejectment

SPS. RAYXEL PRADO AND JULIANA

PRADO AND ALL OTHER PERSONS
ACTING UNDER THEIR NAME,
Defendants.
x-------------------------------------------------x

ORDER

On August 25, 2010, plaintiffs through their counsel Atty. Benjamin Bulalacao
filed a Motion to Tender Payment. It prayed that defendants be ordered to pay One
Hundred Fifty Six Thousand Two Hundred Sixty Two Pesos (P156, 262.00) within Five
(5) days from receipt of a the Courts order and that failure to pay the said amount,
the amount should be deducted from the redemption price. The plaintiffs are willing
to deposit the amount of Three Hundred Forty Three Thousand Seven Hundred Thirty
Eight Pesos ( P343, 738.00).

On October 4, 2010, defendants through their counsel Atty. Lourdes Ona filed a
Comment or Opposition contending , inter alia, that defendants need not pay the
plaintiff any alleged excess proceeds of the auction sale because in reality, there is no
such payment. Thus, the Motion for Tender of Payment be denied.

On October 11, 2010, this Court issued an Order that annulled and set aside the
sale at public auction on the levied property for non-payment of the purchase price by
the highest bidder. The Certificate of Sale dated November 3, 2009 is contrary to
Section 21 of Rule 39 of the Revised Rules of Court stating that the purchaser of the bid
must pay the excess of the judgment.

On November 10, 2010, defendants through their counsel Atty. Lourdes Ona filed
a Motion for Reconsideration of the Order dated October 11, 2010, arguing, among
others: (1) Defendants as judgment creditor need not pay the purchase price; (2) The
case of Macasaet vs. R. Transport Corp., GR No. 172446, October 10, 2007, is not
applicable in the instant case; (3) The excess bid price and the failure to remit the
excess is not a ground for invalidating the execution sale citing Jacobus Bernhard Hulst
vs. PR Builders, GR No. 156364, September 3, 2007; and (4) Plaintiffs remedy is to file
a collection case to recover the excess bid applying by analogy Saguan vs. PBC, GR No.

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159882, November 23, 2007. Defendants through their counsel Atty. Lourdes Ona
prayed to set aside the order dated October 11, 2010, to order the plaintiffs to pay
the defendants the amount of Six Hundred Fifty Thousand Two Hundred Sixty Two
Pesos ( P650, 262.00) redemption price. If the redemption period has lapsed, to order
the consolidation of the title over the subject property.

On November 19, 2010, plaintiffs though their counsel Atty. Benjamin Bulalacao
filed an Opposition with Motion, arguing, among others: (1) The Court did not err in
annulling the auction sale on November 3, 2009 because the defendants failed to pay
the consideration of Six Hundred Fifty Six Thousand Two Hundred Sixty Two Pesos
(P656, 262.00); (2) The inclusion of the amount of One Hundred Fifty Six Thousand
Two Hundred Sixty Two Pesos (P156, 262.00) to the bid price is unjustified because the
expenses of attorneys fees, court fees and additional expenses are not part of the
decision sought to be implemented; (3) An order of execution that varies the tenor of
the judgment or exceeds the terms thereof is nullity citing Philippine Bank of
Communication vs. CA, 279 SCRA 364. In this case, the execution is even worse because
there is no Court order for the sheriff to execute attorneys fees, appearance fees, costs of
suit and other incidental expenses yet the sheriff exceeded in the implementation of the
writ of execution. The transportation expenses and miscellaneous expenses are
unenforceable. Sheriffs commission on the purchase cannot be included in the bid.
Costs of publication are unenforceable. The Official Receipt No. 001781 dated
November 3, 2009 showed that the defendants failed to comply with the publication of
the notice of sale for three (3) consecutive weeks . The publication fee of Five Thousand
Pesos (P5,000.00) per issue by an unknown newspaper is highly unconscionable ; (4)
the breakdown of the cost of sale by Sheriff Dennis Echegoyen is highly irregular and
erroneous; (5) The Jacobous Bernhard Hulst vs. PR Builders Inc., GR No. 156364,
September 3, 2007, the highest bidder who bid in excess of the monetary obligation of
the judgment obligor paid the auction price. The sheriff gave the excess of the auction
price to the judgment obligor contrary to this case, the defendants did not pay the bid
price of Six Hundred Fifty Six Thousand Two Hundred Sixty Two Pesos (P656, 262.00);
(6) That if the price is simulated, the sale is void (Article 1471 of New Civil Code).
Plaintiffs though their counsel Atty. Benjamin Bulalacao prayed to deny the Motion
for Reconsideration and to allow the plaintiff to deposit in court the amount of Three
Hundred Forty Three Thousand Seven Hundred Thirty Eight Pesos (P343, 738.00) as a
redemption price.

On December 28, 2010, plaintiffs though their counsel Atty. Benjamin Bulalacao,
filed a Rejoinder with Motion to Cite Sheriff Dennis Echegoyen in Contempt.

On January 19, 2011, defendants through their counsel Atty. Lourdes Ona, filed a
Comment or Opposition. The argument is that the court has no jurisdiction to interfere
with the final and executor decision of RTC Br. 112, Pasay City citing Ngo Bun Ton vs.
Judge Sayo, GR No. L-45825, June 30, 1988 that pursuant to the power of judicial
stability , the judgment of a court of competent jurisdiction may not be interfered with
by any court of concurrent jurisdiction. For the simple reason that the power to open,
modify or vacate judgment is not only possessed by, but is restricted to the court in
which the judgment was rendered.

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 On February 4, 2011, defendants through their counsel Atty. Loudes Ona filed a
Compliance. There was a reiteration of the previous contention that non-payment of
excess bid price is not a ground for invalidating a foreclosure sale citing Saguan vs. PBC,
GR No. 159882, November 23, 2007 and Metrobank vs. Lamb Construction
Consortium Corp., GR No. 170906, November 27, 2009. Other contentions are : (1)
actions seeking to set aside auction sales does not toll the running of the period seeking
redemption citing DBP vs. Vda de Moll et al., GR No. No. L-25802, January 31, 1972;
(2) The respondent merely offered to pay the amount of auction price alone without
payment of interest. Respondent did not consign such amount in court to show good
faith citing High Yield Realty Inc., GR No. 138978, September 12, 2001; and (3) The
petitioner cannot be granted possession of the property by a mere expediency of filing
an action for judicial redemption without ever paying or consigning the redemption
price with the trial court citing Tolentino vs. Shenton Realty Corp., GR No. 162103,
June 9, 2009.

This Court resolves to partially grant the Motion for Reconsideration.

From a painstaking evaluation of the records of this case, this Court notes that
there is no court order approving the costs and lawful fees of the public auction of
levied property. There is no court order confirming the sale of the levied property.
There is no court order for the payment of the excess amount of bid belonging to the
judgment creditor. To this Court, there was the existence of fraud in the execution sale.
It will not order the issuance of a Certificate of Sale or confirm it, if it knows that there is
no payment of the excess amount of the bid to the judgment debtors. This is the reason
it ordered for the annulment of the execution sale. This Court was kept in the dark
relative to the execution sale. It will not hesitate to apply a correct measure against
fraudulent transactions if only to preserve the integrity of the judiciary as an institution.

The Certificate of Sale dated November 3, 2009 by Sheriff Dennis Echegoyen

stated: IT IS HEREBY CERTIFIED , that on November 03, 2009, at 10:00 oclock in
the morning, in the City Hall of Pasay City, Metro Manila, by virtue of the writ of
execution dated August 15, 2008, to satisfy the judgment, Sheriff Dennis M. Echegoyen
had sold at Public Action the levied real property to Juliana Prado of 133Twin Pioneer
St., Don Carlos, Pasay City, Metro Manila for the total sum of SIX HUNDRED FIFTY
SIX THOUSAND TWO HUNDRED SIXTY TWO (Php. 656, 262.00) PESOS mentioned
in the Notice of Sale xxx IT IS FURTHER CERTIFIED, that the aforesaid highest
bidder, Juliana Prado of 133 Twin Pioneer St., Don Carlos, Pasay City, did not pay
anymore the Sheriff of Pasay City the sum of SIX HUNDRED FIFTY SIX THOUSAND
TWO HUNDRED SIXTY TWO (Php. 656, 262.00), the sale price of the levied property
described above, which amount has been credited to the FULL SATISFACTION of the
said writ of execution.

This Certificate of Sale is patently misleading upon its face for non-payment of
the full bid price which will be the basis of the redemption price. This is a direct
violation of Section 24 Rule 39 of the Revised Rules of Court asseverates: When the
purchaser of any personal property , not capable of manual delivery, pays the purchase
price, the officer making the sale must execute and deliver to the purchaser a certificate

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of sale. Such certificate conveys the purchaser all the rights which the judgment obligor
had in such property as of the date of the levy on execution or preliminary attachment.
There was the issuance of the Certificate of Sale without the court authorizing it.

The Notice of Sale on Execution of Real Property dated October 12, 2009 by
Sheriff Dennis Echegoyen stated: xxx NOW THEREFORE, by virtue of the said writ of
execution and in accordance with Rule 39, Section 18, of the Rules of Court, the
undersigned will sell at public auction to the highest bidder, for CASH and in Philippine
Currency, on November 03, 2009 at 10:00 oclock in the morning, or soon thereafter in
front of the City Hall of Makati City, the rights, interest and participation of the plaintiff
in order to satisfy the said writ of execution, together with interests, costs, sheriffs fees
and the expense of sale. This was published in Weekly Details on October 15 and 22,
2009. This is misleading because the highest bidder who is the judgment creditor did
not pay the excess bid in cash.

Section 21 Rule 39 of the Revised Rules of Court enounces: When the purchaser
is the judgment oblige, and no third party claim has been filed, he need not pay the
amount of the bid if it does not exceed the amount of his judgment. If it does, he shall
pay only the excess. In Matias vs. Provicnial Sheriff, G.R. No. L-48925, August 30,
1943, It will be seen that the law is silent as to the manner of payment in case the
successful bidder is the execution creditor himself. In the absence of a third-party
claimant to the proceeds of the sale, the execution creditor need not pay down the
amount of the bid if it does not exceed the amount of his judgment; and if it does, he
should only be required to pay the excess. That has been the invariable practice, dictated
by common sense, the correctness of which is too obvious for argument. In Sy vs.
Catajan, AM No. P-86-33, August 15, 1988, it was held that sheriff has no discretion and
must require the execution creditor who is the highest bidder to pay his bid in cash. In
Kelly vs. Barnet (24 Cal, App. 119, 140 Pac., 605), it was held: The plain intendment of
these sections is that sales of property under execution shall be conducted of cash, and
that successful bidders shall be prepared to pay the amount of their bids in cash at the
time of the sale. No distinction is made between purchases who are also judgment
creditors and those who are not.

The factual antecedents of the cases of Spouses Saguan vs. PBC, GR No. 159882,
November 23, 2007, Hulst vs. PR Builders Inc., G.R. No. 156364, September 25, 2008
and Metrobank vs. Lamb Construction Consortium Corp., GR No. 170906, November
27, 2009 do not fall squarely in this case. Unlike in the cited cases, this case involves an
ordinary execution sale with irregularities committed with respect to the issuance of the
certificate of sale and the misleading statements therein, without any court order. There
is no issue as to the issuance of a writ of possession as there is no such writ of possession
in this case.

However, a painstaking analysis of the principle of the cited jurisprudence reveals

that the non-payment of excess in judgment does not render the auction sale void. This
is because the judgment creditor partially paid the levied property in full satisfaction of
the writ of execution in the amount of Five Hundred Thousand Pesos (P500,000.00).

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In Villavecencio et al. vs. Mojares et al. , G.R. No. 142648 , February 27, 2003, the
Supreme Court declared, A closer examination of Section 21, Rule 39, would reveal
that there is no requirement to pay the bid in cash. What the Rule emphasizes is that in
the absence of a third party claim, the purchaser in an execution sale need not pay his
bid if it does not exceed the amount of the judgment, otherwise, he shall only pay the
excess. By implication, if there is a third party claim, the purchaser should pay the
amount of his bid without, however, requiring that it be made in cash. Petitioners
reliance in the case of Sy vs. Catajan, 164 SCRA 299, is misplaced. The cited case does
not state that any execution sale shall be null and void if the purchaser did not pay his
bid in cash.

This Court is now persuaded that the public auction by Sheriff Dennis
Echegoyen has a consideration, only there is a partial payment made by judgment
creditor. Thus, there was a voidable execution sale made on November 3, 2009 absent
of annulment action by the judgment debtors. In Caltex vs. PNOC, G.R. No. 150711
August 10, 2006, citing Oria vs. McMicking, 21 Phil. 243, 250-251 (1912). , the
Supreme Court enumerated the badges of fraud as follows: 1. The fact that the
consideration of the conveyance is fictitious or is inadequate; 2. A transfer made by a
debtor after suit has been begun and while it is pending against him; 3. A sale upon
credit by an insolvent debtor; 4. Evidence of large indebtedness or complete insolvency;
5. The transfer of all or nearly all of his property by a debtor, especially when he is
insolvent or greatly embarrassed financially; 6. The fact that the transfer is made
between father and son, when there are present other of the above circumstances; and
7. The failure of the vendee to take exclusive possession of all the property.

As to the inadequacy of the payment of the consideration by the judgment

creditor, the applicable provision is Article 1470 of the New Civil Code that states:
Gross inadequacy of price does not affect a contract of sale, except as it may indicate a
defect in the consent or that the parties really intended a donation or some other act of
contract. The defect of consent contemplated herein refers to mistake, violence,
intimidation, undue influence or fraud. The public auction conducted by Sheriff Dennis
Echegoyen is a voidable contract of sale which is binding unless it is annulled by a
proper action in court. It is susceptible to ratification. In Navarro vs. Sugar Producers
Cooperative Marketing Association, Inc. (1 SCRA 1181), the rule laid down is that the
manner of payment of the purchase price is an essential element before a valid and
binding contract of sale can exist. Although the Civil Code does not expressly state that
the minds of the parties must also meet on the terms or manner of payment of the price,
the same is needed, otherwise there is no sale. As held in Toyota Shaw, Inc. vs. Court of
Appeals (244 SCRA 320), agreement on the manner of payment goes into the price such
that a disagreement on the manner of payment is tantamount to a failure to agree on the
price." One of the three essential requisites of a valid contract is consent of the parties
on the object and cause of the contract. In a contract of sale, the parties must agree not
only on the price, but also on the manner of payment of the price. An agreement on the
price but a disagreement on the manner of its payment will not result in consent, thus
preventing the existence of a valid contract for lack of consent. This lack of consent is
separate and distinct from lack of consideration where the contract states that the price
has been paid when in fact it has never been paid. In the case at bar, Judgment debtors
and their counsel Atty. Benjamin Bulalacao did not file any action to annul the sale of
the subject levied property on the ground of irregularities attending it, including the lack
of the essential requisites of the contract of sale. Article 1318 of the New Civil Code

5
provides that there is no contract unless the following requisites concur: (1) Consent
of the contracting parties; (2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established. Corollary to this is Article 1458 of the
New Civil Code that states By the contract of sale one of the contracting parties
obligates himself to transfer the ownership and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent. This Court notes that
there was no objection prior to the issuance of the Certificate of Sale for the reasons of
unjustified expenses and fees, erroneous breakdown of cost of sale, non-compliance of
publication of auction sale, non-payment of the excess of the bid price, and the
existence of a simulated price during the public auction making the sale void. It can be
logically concluded that they considered the execution sale as valid and legitimate. The
filing of a Motion to Tender Payment instead of a complaint for the Annulment of
Execution Sale on the ground of a vice of consent on August 25, 2010 by judgement
debtors through their counsel Atty. Benjamin Bulalacao is a ratification of any defect
surrounding the execution sale. The redemption is inconsistent with the claim of the
invalidity of the sale(Aclon vs. CA 387 SCRA 415).

Judgment debtors and their counsel Atty. Benjamin Bulalacao asked for the
surplus of the execution sale in the total amount of One Hundred Fifty Six Thousand
Two Hundred Sixty Two Pesos (P156, 262.00) from the judgment creditor. The
computation of the surplus amount of the public auction by them is incorrect. The
correct amount which this Court will confirm in the issuance of the Certificate of Sale is
One Hundred Thousand Five Hundred Ninety Pesos and Sixty Centavos (P100, 590.
60). This is the balance of the total bid amounting to Six Hundred Fifty Six Thousand
Two Hundred Sixty Two Pesos (P656, 262.00) less the judgment for satisfaction
amounting to Five Hundred Thousand Pesos (P500,000.00) and the costs amounting
to Fifty Five Thousand Six Hundred Seventy One Pesos and Forty Centavos (P55,
671.40) excluding the computed interest. Pursuant to Section 21 Rule 39 of the Revised
Rules of Court, the judgment debtors are entitled to the excess amount of the bid of
One Hundred Thousand Five Hundred Ninety Pesos and Sixty Centavos (P100, 590.
60).

The computation of cost and expenses prepared by the judgment creditor

amounting to One Hundred Fifty Six Thousand Two Hundred Sixty Two Pesos (P156,
262.00) is incorrect. There is no basis for the engagement fee of lawyer, appearance fee
of lawyer, other expenses unsubstantiated by receipts. A judgment is the foundation of
a writ of execution which draws its vitality therefrom (Monaghon vs. Monaghon, 25
Ohio St. 325). An officer issuing a writ of execution is required to look to the judgment
for his immediate authority ( Sydnor vs. Roberts, 12 Tex. 598). An execution must
conform to and be warranted by the judgment on which it was issued (Francisco, The
Revised Rules of Court, 641 [1966]; Kramer vs. Montgomery, 206 Okla. 190 242 P. 2d
414 [1952]). There should not be a substantial variance between the judgment and the
writ of execution ( Avery vs. Lewis, 10 Vt. 332). Under A. M. NO. 00-2-01-SC
(Resolution Amending Rule 141 (Legal Fees) of the Rules of Court), the pertinent
sections are:

SEC. 1. Payment of fees. - Upon the filing of the pleading or other application which
initiates an action or proceeding, the fees prescribed therefor shall be paid in full.

6
SEC. 2. Fees in lien. - Where the court in its final judgment awards a claim not alleged,
or a relief different from, or more than that claimed in the pleading, the party concerned
shall pay the additional fees which shall constitute a lien on the judgment in satisfaction
of said lien. The clerk of court shall assess and collect the corresponding fees.

SEC. 3. Persons authorized to collect legal fees. - Except as otherwise provided in this
rule, the officers and persons hereinafter mentioned, together with their assistants and
deputies, may demand, receive, and take the several fees hereinafter mentioned and
allowed for any business by them respectively done by virtue of their several offices, and
no more. All fees so collected shall be forthwith remitted to the Supreme Court. The fees
collected shall accrue to the general fund. However, all increases in the legal fees
prescribed in amendments to this rule as well as new legal fees prescribed herein shall
pertain to the Judiciary Development Fund as established by law. The persons herein
authorized to collect legal fees shall be accountable officers and shall be required to post
bond in such amount as prescribed by law.

SEC. 8. Clerks of Courts of the First Level.- (a) For each civil action or proceeding,
where the value of the subject matter involved, or the amount of the demand, inclusive
of interest, damages of whatever kind, attorney's fees, litigation expenses, and costs is:

(g) For executing a writ or process to place a party in possession of real estates one
hundred and fifty (P150.00) pesos;

(h) For advertising a sale, besides cost of publication, seventy-five (P75.00) pesos;

(i) For taking inventory of goods levied upon when the inventory is ordered by the court,
one hundred and fifty (P150.00) pesos per day of actual inventory work;

(j) For levying on execution on personal or real property, seventy-five (P75.00) pesos;

(l) For money collected by him by order, execution, attachment, or any other process,
judicial or extrajudicial, the following sums, to wit: 1. On the first four thousand
(P4,000.00) pesos, five (5%) per centum; 2. On all sums in excess of four thousand
(P4,000.00) pesos, two and one-half (2.5%) per centum.

In addition to the fees herein above fixed, the party requesting the process of any
court, preliminary, incidental, or final, shall pay the sheriffs expenses in serving or
executing the process, or safeguarding the property levied upon, attached or seized,
including kilometrage for each kilometer of travel, guards' fees, warehousing and similar
charges, in an amount estimated by the sheriff, subject to the approval of the court.
Upon approval of said estimated expenses, the interested party shall deposit such
amount with the clerk of court and ex oficio sheriff, who shall disburse the same to the
deputy sheriff assigned to effect the process, subject to liquidation within the same
period for rendering a return on the process. Any unspent amount shall be refunded to
the party making the deposit. A full report shall be submitted by the deputy sheriff
assigned with his return, and the sheriffs expenses shall be taxed as costs against the
judgment debtor.

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 The lawful fees provided under Section 9, Rule 39 of the 1997 Rules of Civil
Procedure and the costs provided under Section 18, Rule 39 of the Revised Rules of
Court refer to the sheriffs fees and costs of publication. Thus it was held in Miahelhi et
al. vs. Halili et al., G.R. No. L-16587, October 31, 1962, As to the expense of
publication, Section 14 of Rule 39 of the Rules of Court, provides that after the judgment
has been satisfied, any excess in the proceeds of the sale (of the property levied upon)
over the judgment and accruing costs, must be delivered to the judgment debtor, less
otherwise directed by the judgment or order of court. Do these "accruing costs" include
the expense of application? Section 16 of Rule 39, imposes upon the sheriff duty to
publish in a newspaper, the notice of sale of property levied upon. The publication being
a requirement, the expenditures in relation thereto may be deemed as necessary
incident of execution. It is reasonable to hold that they form part of the accruing costs.
The above conclusions are strengthened by Section 18 of the same Rule 39 which allows
the judgment debtor to prevent the sale provided he pays the amount requested by the
execution and "the costs that have been incurred therein." The sheriff's fees and costs of
publication having been incurred in connection with the execution, covered by such
"costs" clause. The condition provided in this Section 18 that the judgment debtor pays
the costs that have been incurred therein is a clear indication that had there been an
execution sale, the judgment debtor would have had to bear these expenses. Otherwise,
why should he be required to pay the said expenses should he move to prevent the sale?
In pursuance, therefore, of the explicit order of lower court in its writ of execution, and
in accordance with the provisions of the Rules of Court, petitioners may charge
respondents Halili the sheriff's fees and costs of publication of his notice of sale.

The Breakdown of Cost of Sale dated September 17, 2010 by Sheriff Dennis
Echegoyen totalled to One Hundred Twenty One Thousand Two Hundred Ninety Seven
Pesos and Sixty Centavos (P121, 297.60). The properly receipted costs of the execution
sale totalled to Fifty Five Thousand Six Hundred Seventy One Pesos and Forty Centavos
(P55, 671.40) only. The Interest on the bid price is not part of the lawful fees. It should
be computed in order to determine the Redemption price, not as a part of the cost
added to the bid price. This amount of Fifty Five Thousand Six Hundred Seventy One
Pesos and Forty Centavos (P55, 671.40) with the corresponding receipts is the lawful
fees to be paid to the executing sheriff who shall turn over the same amount within the
same day to the clerk of court that issued the writ.

In case the judgment creditor refuses or fails to pay the excess amount of bid, the
applicable provision is Section 20, Rule 39 of the Revised Rules of Court that
ventilates : If a purchaser refuses the amount bid by him from property stuck off to
him at a sale under execution, the officer may again sell the property to the highest
bidder and shall not be responsible for any loss occasioned thereby but the court may
order the refusing purchaser to pay into the court the amount of such loss with costs
and may punish him for contempt if he disobeys the order. The amount of such
payment shall be for the benefit of the person entitled to the proceeds of the execution
unless the execution has been fully satisfied, in which event such proceeds shall be for
the benefit of the judgment obligor. The officer may thereafter reject any subsequent bid
of such purchaser who refuses to pay.

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 In view of the peculiar circumstances of this case, applying the laws and
jurisprudence in harmony to each other, this Court realizes and holds that to nullify
the Certificate of Sale and to re-sale the levied subject property is expensive and taxing
for both parties. To conduct another execution sale involving the same levied subject
property because of the irregularities which both parties seem not to mind at the onset
is against the interest of justice. The re-sale works to the disadvantage of both parties
who should not suffer because of the misleading statements in the Certificate of Sale.

The failure to pay the excess bid by the judgment creditor results to the re-sale of
the subject property. This Court agrees to the applicability of the legal compensation, as
a better option to the re-bidding of the subject property. In Selwyn F. Lao, et al. vs.
Special Plans, Inc., G.R. No. 164791, June 29,2010, it was declared, The Civil Code
provides that compensation shall take place when two persons, in their own right, are
creditors and debtors of each other. In order for compensation to be proper, it is
necessary that: (i) each one of the obligors is bound principally and that he be at the
same time a principal creditor of the other; (ii) both debts consist in a sum of money, or
if the things due are consumable, they be of the same kind, and also of the same quality
if the latter has been stated; (iii) the two debts are due: (iv) the debts are liquidated and
demandable; and (v) over neither of them be any retention or controversy, commenced
by third parties and communicated in due time to the debtor. A claim is liquidated when
the amount and time of payment is fixed. If acknowledged by the debtor, although not in
writing, the claim must be treated as liquidated.

Anent the issue on the redemption of the subject property, Section 30 of Rule 39 of
the Revised Rules of Court reads as follows:

Sec. 30. Time and manner of, and amounts payable on, successive redemptions. Notice
to be given and filed. - The judgment debtor, or redemptioner, may redeem the property
from the purchaser, at any time within twelve (12) months after the sale, on paying the
purchaser the amount of his purchase, with one per centum per month interest thereon
in addition, up to the time of redemption, together with the amount of any assessments
or taxes which the purchaser may have paid thereon after purchase, and interest on such
last-named amount at the same rate; and if the purchaser be also a creditor having a
prior lien to that of the redemptioner, other than the judgment under which such
purchase was made, the amount of such other lien, with interest. Property so redeemed
may again be redeemed within sixty (60) days after the last redemption upon payment
of the sum paid on the last redemption, with two per centum thereon in addition, and
the amount of any assessments or taxes which the last redemptioner may have paid
thereon after redemption by him, with interest on such last-named amount, and in
addition, the amount of any liens held by said last redemptioner prior to his own, with
interest. The property may be again, and as often as a redemptioner is so disposed,
redeemed from any previous redemptioner within sixty (60) days after the last
redemption, on paying the sum paid on the last previous redemption, with two per
centum thereon in addition, and the amounts of any assessments or taxes which the last
previous redemptioner paid after the redemption thereon, interest thereon, and the
amount of any liens held by the last redemptioner prior to his own, with interest.

9
 Written notice of any redemption must be given to the officer who made the sale
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; if such notice be not filed, the property
may be redeemed without paying such assessments, taxes, or liens.

In Bodiongan vs. CA et al, GR No. 114418 September 21, 1995, our Supreme
Court ruled, In order to effect a redemption, the judgment debtor must pay the
purchaser the redemption price composed of the following: (1) the price which the
purchaser paid for the property; (2) interest of 1% per month on the purchase price; (3)
the amount of any assessments or taxes which the purchaser may have paid on the
property after the purchase; and (4) interest of 1% per month on such assessments and
taxes. The redemption price must be for the full amount, otherwise the offer to redeem
will be ineffectual. And if the tender is for less than the entire amount, the purchaser
may justly refuse acceptance thereof. The judgment debtor must pay the purchaser
within twelve months after the sale, "the amount of his purchase, with one per centum
per month interest thereon in addition, up to the time of redemption, together with the
amount of any assessments or taxes which the purchaser may have paid thereon after
the purchase, and interest on such last-named amount at the same rate," otherwise, the
purchaser may justly refuse the tender if it is for less than this amount( See Ordoez vs.
Villaroman, 44 O.G. [No. 6] 2226). Indeed, the payment mentioned in the rule must be
made by tendering and delivering to the purchaser the sum of money required for the
purpose (Aparri vs. CA et al., G.R. No. L-15947, April 30, 1965).

In several cases decided by the Supreme Court where the right to repurchase was
held to have been properly exercised, there was an unequivocal tender of payment for
the full amount of the repurchase price. Otherwise, the offer to redeem is ineffectual.
Bona fide redemption necessarily implies a reasonable and valid tender of the entire
repurchase price, otherwise the rule on the redemption period fixed by law can easily be
circumvented (BPI Family Savings Bank, Inc. vs. Spouses Veloso, 479 Phil. 627, 632).
It is not difficult to discern why the redemption price should either be fully offered in
legal tender or else validly consigned in court. Only by such means can the buyer
become certain that the offer to redeem is one made seriously and in good faith. A buyer
cannot be expected to entertain an offer of redemption without attendant evidence that
the redemptioner can, and is willing to accomplish the repurchase immediately. A
different rule would leave the buyer open to harassment by speculators or crackpots, as
well as to unnecessary prolongation of the redemption period, contrary to the policy of
the law. While consignation of the tendered price is not always necessary because legal
redemption is not made to discharge a pre-existing debt (Asturias Sugar Central vs.
Cane Molasses Co., 60 Phil. 253), a valid tender is indispensable, for the reasons already
stated. Of course, consignation of the price would remove all controversy as to the
redemptioner's ability to pay at the proper time (Conejero et al. vs. CA et al., G.R. No.
L-21812 , April 29, 1966).

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 The general rule in redemption is that it is not sufficient that a person offering to
redeem manifests his desire to do so. The statement of intention must be accompanied
by an actual and simultaneous tender of payment. This constitutes the exercise of the
right to repurchase.

On the other hand, the Supreme Court allowed partial tender of payment of the
redemption price in Castillo et al vs. Nagtalon et al., G.R. No. L-17079, January 29,
1962. It ruled, In other words, in the redemption of properties sold at an execution
sale, the amount payable is no longer the judgment debt but the purchase price.
Considering that appellee tendered payment only of the sum of P317.44, whereas the
three parcels of land she was seeking to redeem were sold for the sums of P1,240.00,
P21.00, and P30.00, respectively, the aforementioned amount of P317.44 is insufficient
to effectively release the properties. However, as the tender of payment was timely made
and in good faith in the interest of justice we incline to give the appellee opportunity to
complete the redemption purchase of the three parcels, as provided in Section 26, Rule
39 of the Rules of Court, with and executory. In this wise, justice is done to the appellee
who had been made to pay more than her share in the judgment, without doing an
injustice to the purchaser who shall get the corresponding interest of 1% per month on
the amount of his purchase up to the time of redemption. Should appellee fail to
complete the redemption price as herein indicated, the sheriff may either release to
appellee, the two smaller lots and return to her the balance of her deposit, or return the
entire deposit without releasing any of the three lots, as the appellee may elect. The
factual milieu of this case finds no application in this instant case.

There was no expiration of the period of redemption. The Order dated October
11, 2010 suspended the period of redemption. The plaintiffs as judgement debtors did
not lose any right or interest over the property as their failure to redeem them in not
due to their own fault. They filed a Motion to Tender Payment filed August 25, 2010.
The rule on redemption is liberally construed in favour of the original owner of the
property (Serrano vs. CA 417 SCRA 415). In fact, the Court allowed redemption in
certain cases even after the lapse of the one year period, in order to promote justice and
to avoid injustice (De Robles v. CA, 431 SCRA 566). Article 1545 of the New Civil Code
also provides that "where the obligation of either party to a contract of sale is subject to
any condition which is not performed, such party may refuse to proceed with the
contract or he may waive performance of the condition." Unless the here judgment
creditor pays the excess bid of the purchase price of the expiration of execution sale, it is
a flawed argument that the period of redemption has expired.

The principle of judicial stability is inapplicable in this case. In Beltran vs.

Judge Cabrera, G.R. No. L-48109 , September 7, 1942, Our Supreme Court through its
ponente Justice Manuel Moran held that a justice of the peace court has the inherent
power "to amend and control its process and orders so as to make them conformable to
law and justice".

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 WHEREFORE, premises considered, the Order dated October 11, 2010 is
hereby PARTIALLY RECONSIDERED AND SET ASIDE. The judgment creditor
is ordered to pay the excess of the amount of the bid amounting to One Hundred
Thousand Five Hundred Ninety Pesos and Sixty Centavos (P100, 590. 60) to the
judgment debtors who are allowed to tender the payment of the full amount of the
redemption price and consign the same within thirty (30) days from receipt of this
Order. In case of failure to pay the excess amount of bid, the said amount shall be
deducted from the redemption price. The Courts sheriff is ordered to submit the
computation of the redemption price within ten (10) days from the receipt of this Order.

SO ORDERED.

Pasay City, February 25, 2011.

ELIZA B. YU
Judge

Copy furnished:
All parties concerned.

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