Modequillo v.

Breva, GR 86355, 31 May 1990, 185 SCRA 766

FACTS:

The sheriff levied on a parcel of residential land located at Poblacion Malalag, Davao del Sur on July
1988, registered in the name of Jose Mondequillo and a parcel of agricultural land located at Dalagbong
Bulacan, Malalag, Davao de Sur also registered in the latters name. A motion to quash was filed by the
petitioner alleging that the residential land is where the family home is built since 1969 prior the
commencement of this case and as such is exempt from execution, forced sale or attachment under
Article 152 and 153 except for liabilities mentioned in Article 155 thereof, and that the judgment sought
to be enforced against the family home is not one of those enumerated. With regard to the agricultural
land, it is alleged that it is still part of the public land and the transfer in his favor by the original
possessor and applicant who was a member of a cultural minority. The residential house in the present
case became a family home by operation of law under Article 153.

ISSUE: WON the subject property is deemed to be a family home.

HELD:

The petitioners contention that it should be considered a family home from the time it was occupied by
petitioner and his family in 1969 is not well-taken. Under Article 162 of the Family Code, it provides that
the provisions of this Chapter shall govern existing family residences insofar as said provisions are
applicable. It does not mean that Article 152 and 153 shall have a retroactive effect such that all existing
family residences are deemed to have been constituted as family homes at the time of their occupation
prior to the effectivity of the Family Code and are exempt from the execution for payment of obligations
incurred before the effectivity of the Code. The said article simply means that all existing family
residences at the time of the effectivity of the Family Code, are considered family homes and are
prospectively entitled to the benefits accorded to a family home under the FC. The debt and liability
which was the basis of the judgment was incurred prior the effectivity of the Family Code. This does not
fall under the exemptions from execution provided in the FC.

As to the agricultural land, trial court correctly ruled that the levy to be made shall be on whatever rights
the petitioner may have on the land. Petition was dismissed.

Manacop v. CA, GR 97898, 11 August 1997

FACTS:
Florante Manacop and his wife Euaceli purchased on March 1972, a residential lot with a bungalow
located in Quezon City. The petitioner failed to pay the sub-contract cost pursuant to a deed of
assignment signed between petitioners corporation and private respondent herein (FF Cruz & Co). The
latter filed a complaint for the recovery for the sum of money with a prayer for preliminary attachment
against the former. Consequently, the corresponding writ for the provisional remedy was issued which
triggered the attachment of a parcel of land in Quezon City owned by the Manacop Construction
President, the petitioner. The latter insists that the attached property is a family home having been
occupied by him and his family since 1972 and is therefore exempt from attachment.

ISSUE: WON the subject property is indeed exempted from attachment.

HELD:

The residential house and lot of petitioner became a family home by operation of law under Article 153
of the Family Code. Such provision does not mean that said article has a retroactive effect such that all
existing family residences, petitioners included, are deemed to have been constituted as family homes
at the time of their occupation prior to the effectivity of the Family Code and henceforth, are exempt
from execution for the payment of obligations incurred before the effectivity of the Family Code on
August 3, 1988. Since petitioner incurred debt in 1987, it preceded the effectivity of the Code and his
property is therefore not exempt form attachment.

The petition was dismissed by SC.

Taneo v. CA, GR 108532, 9 March 1999

Pablito Taneo vs. Court of Appeals

G.R. No. 108532

March 9, 1999

Petitioners: Heirs of Pablo Taneo

Respondent: Abdon Gilig

Facts: Two of the petitioners properties were levied to satisfy the judgement amount of about P5,000.
One was a parcel of land located in Bario Igpit, Municipality of Opol Misamis Oriental and the other was
the family home also located at Igpit, Opol Misamis Oriental. On February 12, 1966, the said properties
were sold at a public auction to the prvate respondent as the highest bidder. The petitioners failed to
redeem thesame so a final deed of conveyance was executed on February 9, 1968, definitely selling,
transferring and conveying said properties to the private respondent.

On November 5, 1985, the petitioner filed an action to declare the deed of conveyance void and to quiet
title over the land with a prayer for a writ of preliminary injuction. They argued that the property was
acquire through free patent thfore it isinalienable and not subject to any encumbrance for the payment
of debt, pursuant to Commonwealth Act No. 141. They further alleged that the Sheriffs Deed of
Conveyance issued by Deputy Provincial Sheriff Jose V. Yasay on February 1968 in favor of the private
respondent over the subject property including their family home was extrajudicially constituted.

Private respondent refuted the petitioners contentions alleging that he lawfully acquired the subject
properties described as Lot No. 5545, Cad. 237 which was a private land, by virtue of a Sheriffs Sale on
February 12, 1966.

Private respondent averred that the subject land was originally owned by Lazaro Ba-a who sold the land
to Pablo Taneo on September 18, 1941, as evidenced by an Escritura de Venta. Despite it being a
private land, Pablo Taneo filed an application for free patent which was made final only in 1979.

RTC ruled in favor of Gilig. The Court of Appeals affirmed the RTC Decision in toto.

Issue: Whether or not the family home is exempt from execution

Held: NO

Ratio: A debt was incurred before the housewas deemed a family home. Before the effectivity of the FC,
a family home must be constituted judicially (filing of petition)and extra-judicially (registration). It turns
out that the instrument constituting the family home was registered only in JAN 24, 1966 while the
money judgement was rendered on JAN 24 1964. The family home is not exempt from execution since
there was a debtincurred before theregistration of the house as a family home

A family home is the dwelling place of a person and his family. It is said, however, that the family home
is a real right, which is gratuitous, inalienable and free from attachment, constituted over the dwelling
place and the land on which it is situated, which confers upon a particular family the right to enjoy such
properties, which must remain with the person constituting it and his heirs.[9] It cannot be seized by
creditors except in certain special cases.

Under the Civil Code (Articles 224 to 251), a family home may be constituted judicially and
extrajudicially, the former by the filing of the petition and with the approval of the proper court, and the
latter by the recording of a public instrument in the proper registry of property declaring the
establishment of the family home. The operative act then which created the family home extrajudicially
was the registration in the Registry of Property of the declaration prescribed by Articles 240 and 241 of
the Civil Code.[10]
Under the Family Code, however, registration was no longer necessary. Article 153 of the Family Code
provides that the family home is deemed constituted on a house and lot from the time it is occupied in
the family residence. It reads:

The family home is deemed constituted on a house and lot from the time it is occupied as family
residence. From the time of its constitution and so long as its beneficiaries actually resides therein, the
family home continues to be such and is exempt from execution, forced sale or attachment, except as
hereinafter provided and to the extent of the value allowed by law.

It is under the foregoing provision which petitioners seek refuge to avert execution of the family home
arguing that as early as 1964, Pablo Taneo had already constituted the house in question as their family
home. However, the retroactive effect of the Family Code, particularly on the provisions on the family
home has been clearly laid down by the court as explained in the case of Manacop v. Court of
Appeals[11] to wit:

Finally, the petitioner insists that the attached property is a family home, having been occupied by him
and his family since 1972, and is therefore exempt from attachment.

The contention is not well-taken.

While Article 153 of the Family Code provides that the family home is deemed constituted on a house
and lot from the time it is occupied as a family residence, it does not mean that said article has a
retroactive effect such that all existing family residences, petitioners included, are deemed to have
been constituted as family homes at the time of their occupation prior to the effectivity of the Family
Code and henceforth, are exempt from execution for the payment of obligations incurred before the
effectivity of the Family Code on August 3, 1988 (Modequillo vs. Breva, 185 SCRA 766). Neither does
Article 162 of said Code state that the provisions of Chapter 2, Title V thereof have retroactive effect. It
simply means that all existing family residences at the time of the effectivity of the Family Code are
considered family homes and are prospectively entitled to the benefits accorded to a family home under
the Family Code (Modequillo vs. Breva, supra). Since petitioners debt was incurred as early as
November 25, 1987, it preceded the effectivity of the Family Code. His property is therefore not exempt
from attachment (Annex O, Plaintiffs Position Paper and Memorandum of Authorities, p. 78). (pp. 5-
6, Decision; pp. 64-65, Rollo) (underscoring ours)

The applicable law, therefore, in the case at bar is still the Civil Code where registration of the
declaration of a family home is a prerequisite. Nonetheless, the law provides certain instances where
the family home is not exempted from execution, forced sale or attachment.

Article 243 reads:

The family home extrajudicially formed shall be exempt from execution, forced sale or attachment,
except:

(1) For nonpayment of taxes;

(2) For debts incurred before the declaration was recorded in the Registry of Property;

(3) For debts secured by mortgages on the premises before or after such record of the declaration;
(4) For debts due to laborers, mechanics, architects, builders, material-men and others who have
rendered service or furnished material for the construction of the building.[12]

The trial court found that on March 7, 1964, Pablo Taneo constituted the house in question, erected on
the land of Plutarco Vacalares, as the family home. The instrument constituting the family home was
registered only on January 24, 1966. The money judgment against Pablo Taneo was rendered on
January 24, 1964. Thus, at that time when the debt was incurred, the family home was not yet
constituted or even registered. Clearly, petitioners alleged family home, as constituted by their father
is not exempt as it falls under the exception of Article 243(2).

Moreover, the constitution of the family home by Pablo Taneo is even doubtful considering that such
constitution did not comply with the requirements of the law. The trial court found that the house was
erected not on the land which the Taneos owned but on the land of one Plutarco Vacalares. By the very
definition of the law that the family home is the dwelling house where a person and his family resides
and the land on which it is situated,[13] it is understood that the house should be constructed on a land
not belonging to another. Apparently, the constitution of a family home by Pablo Taneo in the instant
case was merely an afterthought in order to escape execution of their property but to no avail.

Josef v. Santos, GR 165060, 27 November 2008

Facts:

In Civil Case No. 95-110-MK, Petitioner Albino Josef was the defendant, which is a case for
collection of sum of money filed by herein respondent Otelio Santos, who claimed that petitioner failed
to pay the shoe materials which he bought on credit from respondent on various dates in 1994. After
trial, the Regional Trial Court of Marikina City found petitioner liable to respondent. Petitioner appealed
to the Court of Appeals, which affirmed the trial courts decision in Toto. Petitioner filed before this
Court a petition for review on certiorari, but it was dismissed in a Resolution dated February 18, 2002.
The Judgment became final and executory on May 21, 2002.

A writ of execution was issued on August 20, 2003 and enforced on August 21, 2003. On August
29, 2003, certain personal properties subjects of the writ of execution were auctioned off. Thereafter, a
real property located at Marikina City was sold by way of public auction to fully satisfy the judgment
credit.

On November 5, 2003, petitioner filed an original petition for certiorari with the Court of Appeals,
questioning the sheriffs levy and sale of the abovementioned personal and real properties. Petitioner
claimed that the personal properties did not belong to him but to his children; and that the real property
was his family home thus exempt from execution.

Issue:
 Whether or not the levy and sale of the personal belongings of the petitioners children as well as
the attachment and sale on public auction of his family home to satisfy the judgment award in favor of
respondent is legal.

Ruling:

The Supreme Court held that the family home is the dwelling place of a person and his family, a
sacred symbol of family love and repository of cherished memories that last during ones lifetime. It is
the sanctuary of that union which the law declares and protects as a sacred institution; and likewise a
shelter for the fruits of that union. It is where both can seek refuge and strengthen the tie that binds
them together and which ultimately forms the moral fabric of our nation. The protection of the family
home is just as necessary in the preservation of the family as a basic social institution, and since no
custom, practice or agreement destructive of the family shall be recognized or given effect, the trial
courts failure to observe the proper procedures to determine the veracity of petitioners allegations, is
unjustified.

The same is true with respect to personal properties levied upon and sold at auction. Despite
petitioners allegations in his Opposition, the trial court did not make an effort to determine the nature
of the same, whether the items were exempt from execution or not, or whether they belonged to
petitioner or to someone else.

De Mesa v. Acero, GR 185064, 16 January 2012

DOCTRINE:

Rules on constitution of family homes, for purposes of exemption from execution:

First, family residences constructed before theeffectivity of the Family Code or before August 3, 1988
must be constituted as a family home either judicially or extrajudicially in accordance with the
provisions of the Civil Code in order to be exempt from execution;

Second, family residences constructed after the effectivity of the Family Code on August 3, 1988 are
automatically deemed to be family homes and thus exempt from execution from the time it was
constituted and lasts as long as any of its beneficiaries actually resides therein;

Third, family residences which were not judicially orextrajudicially constituted as a family home prior to
the effectivity of the Family Code, but were existing thereafter, are considered as family homes by
operation of law and are prospectively entitled to the benefits accorded to a family home under the
Family Code.
The settled rule is that the right to exemption or forced sale under Article 153 of the Family Code is a
personal privilege granted to the judgment debtor and as such, it must be claimed not by the sheriff, but
by the debtor himself before the sale of the property at public auction. It is not sufficient that the
person claiming exemption merely alleges that such property is a family home. This claim for exemption
must be set up and proved to the Sheriff.

FACTS:

Araceli De Mesa is married to Ernesto De Mesa.They purcahsed a parcel of land located in Meycauayan,
Bulacan. A house was contracted in the said property, which became their family home. A year after,
Arceli contracted a loan in the amount of P100,000 from Claudio Acero, which was secured by a
mortgage on the said parcel of land and house. Araceli issued a check for the payment of the loan. When
Acero presented the check to the bank it was dishonored because the checking account was already
closed. Acero demanded payment. However, Spouses De Mesa still failed to pay. Acero filed a complaint
for violation of B.P. 22 in the RTC. The RTC acquitted the Spouses but ordered them to pay Acero
P100,000 plus legal interest. A writ of execution was issued to levy on the said property.

The house and lot was sold in the public auction and Acero was the highest bidder. Acero leased the
property to Juanito Oliva, who defaulted payment for several years. Oliva contends that the Acero
spouses are not the owners of the property.

The MTC rendered a Decision, giving due course to Spouses Aceros complaint and ordering the Spouses
De Mesa and Oliva to vacate the subject property. Spouses De Mesa contend that they are the rightful
owners of the property. The MTC also stated that from the time a Torrens title over the subject property
was issued in Claudios name up to the time the complaint for ejectment was filed, the petitioners never
assailed the validity of the levy made by the Sheriff, the regularity of the public sale that was conducted
thereafter and the legitimacy of Aceros Torrens title that was resultantly issued.

Spouses De Mesa filed an action to nullify the TCT issued to Acero. Spouses De Mesa contend that the
subject property is a family home, which is exempt from execution under the Family Code and, thus,
could not have been validly levied upon for purposes of satisfying the writ of execution. RTC dismissed
the complaint. CA affirmed RTCs decision.

ISSUE:
Whether or not the subject property, as a family home, may be subject to execution in this case.

HELD:

YES, the subject property is family home but is subject to execution.In general, the family home is
exempt from execution. However, the person claiming this privilege must assert it at the time it was
levied or within a reasonable time thereafter.

RATIO:

For the family home to be exempt from execution,distinction must be made as to what law applies
based on when it was constituted and what requirements must be complied with by the judgment
debtor or his successors claiming such privilege.

The foregoing rules on constitution of family homes, for purposes of exemption from execution, could
be summarized as follows:

First, family residences constructed before the effectivity of the Family Code or before August 3, 1988
must be constituted as a family home either judicially or extrajudicially in accordance with the
provisions of the Civil Code in order to be exempt from execution;

Second, family residences constructed after the effectivity of the Family Code on August 3, 1988 are
automatically deemed to be family homes and thus exempt from execution from the time it was
constituted and lasts as long as any of its beneficiaries actually resides therein;

Third, family residences which were not judicially or extrajudicially constituted as a family home prior to
the effectivity of the Family Code, but were existing thereafter, are considered as family homes by
operation of law and are prospectively entitled to the benefits accorded to a family home under the
Family Code.

Here, the subject property became a family residence sometime in January 1987 when Spouses De Mesa
got married. There was no showing, however, that the same was judicially or extrajudicially constituted
as a family home in accordance with the provisions of the Civil Code. Still, when the Family Code took
effect on August 3, 1988, the subject property became a family home by operation of law and was thus
prospectively exempt from execution. The petitioners were thus correct in asserting that the subject
property was a family home.

Despite the fact that the subject property is a family home and, thus, should have been exempt from
execution, Spouses De Mesa should have asserted the subject property being a family home and its
being exempted from execution at the time it was levied or within a reasonable time thereafter. They
are stopped from claiming the exemption of the property from execution.

Kelley v. Planters Products, Inc, GR 172263, 9 July 2008

Facts:

Petitioner Auther G. Kelley, Jr. (Auther) acquired agricultural chemical products on consignment
from respondent Planters Products, Inc. (PPI) in 1989. Due to Authers failure to pay despite demand,
PPI filed an action for sum of money against him in the Regional Trial Court of Makati City. After trial on
the merits, the RTC Makati City decided in favor of PPI and issued a writ of execution. After being
belatedly informed of the said sale, petitioners Auther and his wife Doris A. Kelley filed a motion to
dissolve or set aside the notice of levy in the RTC Makati City on the ground that the subject property
was their family home which was exempt from execution.

Issue:

Whether or not the subject property is the family home of the petitioners.

Ruling:

Under the Family Code, there is no need to constitute the family home judicially or extrajudicially.
All family homes constructed after the effectivity of the Family Code (August 3, 1988) are constituted as
such by operation of law. All existing family residences as of August 3, 1988 are considered family homes
and are prospectively entitled to the benefits accorded to a family home under the Family Code.

The exemption is effective from the time of the constitution of the family home as such and lasts
as long as any of its beneficiaries actually resides therein. Moreover, the debts for which the family
home is made answerable must have been incurred after August 3, 1988. Otherwise (that is, if it was
incurred prior to August 3, 1988), the alleged family home must be shown to have been constituted
either judicially or extrajudicially pursuant to the Civil Code.

The rule, however, is not absolute. The Family Code, in fact, expressly provides for the following
exceptions: Article 155. The family home shall be exempt from execution, forced sale or attachment
except: (1) For non-payment of taxes; (2) For debts incurred prior to the constitution of the family
home; (3) For debts secured by a mortgage on the premises before or after such constitution; and (4)
For debts due to laborers, mechanics, architects, builders, material men and others who have rendered
service or furnished material for the construction of the building.

Equitable PCIB v. OJ-Mark Trading, GR 165950, 8 August 2010

121. Equitable PCI Bank vs. OJ- Mark trading

G.R. No. 165950, August 11, 2010

Facts:

Respondent-spouses Oscar and Evangeline Martinez obtained loans from petitioner Equitable PCI Bank,
Inc. in the aggregate amount of P4,048,800.00. As security for the said amount, a Real Estate Mortgage
(REM) was executed over a condominium unit where the spouses are residing. Respondent Oscar
Martinez signed the REM both as principal debtor and as President of the registered owner and third-
party mortgagor, respondent OJ-Mark Trading, Inc.

Respondent-spouses defaulted in the payment of their outstanding loan obligation; thus, they offered to
settle their indebtedness with the assignment to the Bank of a commercial lot, which at that time, was
not transferred in their name. While petitioners officers held a meeting with respondent Martinez, the
latter however failed to submit the required documents such as certificates of title and tax declarations
so that the bank can evaluate his proposal to pay the mortgage debt via dacion en pago. Consequently,
petitioner initiated the extrajudicial foreclosure of the real estate mortgage. On the other hand,
respondents filed a civil case for TRO and annulment of the extrajudicial sale. They alleged, among
others, that the REM is void for having been illegally notarized; that the petitioner acted in BAD FAITH
because it did not officially inform them of the denial or of their proposal to settle the loan obligation by
dacion. The RTC ruled in favor of respondents and issued the TRO. The same was affirmed by the CA,
the latter holding that respondents have sufficiently shown their proprietary right over the
condominium unit sought to be foreclosed, entitling it to the questioned TRO. Thus, petitioner filed a
petition for review on certiorari under Rule 45 contending as follows: 1) it has a clear right to foreclose
the mortgage because the respondents failed to settle their obligations; 2) there respondents have no
right to an injunction because they have no clear right to a dacion en pago.

Issue: Whether or not the respondents have shown a clear legal right to enjoin the foreclosure and
public auction of the third-party mortgagors property.
Held: The Court REVERSED the decision of the CA. The Court held that respondent spouses are NOT
entitled to an injunctive writ because their rights are merely contingent and not in esse. According to
the Court:

1. Respondents failed to show that they have a right to be protected and that the acts against which the
writ is to be directed are violative of the said right.

On the face of their clear admission that they were unable to settle their obligations which were secured
by the mortgage, petitioner has a clear right to foreclose the mortgage. Foreclosure is but a necessary
consequence of non-payment of a mortgage indebtedness. In a real estate mortgage when the principal
obligation is not paid when due, the mortgagee has the right to foreclose the mortgage and to have the
property seized and sold with the view of applying the proceeds to the payment of the obligation.

This Court has denied the application for a Writ of Preliminary Injunction that would enjoin an
extrajudicial foreclosure of a mortgage, and declared that foreclosure is proper when the debtors are in
default of the payment of their obligation. Where the parties stipulated that the mortgagee is
authorized to foreclose the mortgaged properties in case of default by the mortgagors, the mortgagee
has a clear right to foreclosure in case of default, making the issuance of a Writ of Preliminary Injunction
improper. Therefore, the allegations of denial of due process and prematurity of a loan are not
sufficient to defeat the mortgagees unmistakable right to an extrajudicial foreclosure.

2. There was no bad faith on the part of the petitioner.

It bears stressing that the existing written contract between petitioner and respondent was admittedly
one of loan restructuring; there is no mention whatsoever or even a slightest reference in that written
contract to a supposed agreement of dacion en pago. In fine, it is still necessary for petitioner to
establish in the main case its rights on the alleged dacion en pago before those rights become in esse or
actual and existing. Only then can the injunctive writ be properly issued. It cannot be the other way
around. Otherwise, it will be like putting the cart before the horse.

The respondents position, therefore, that petitioners act of initiating extrajudicial foreclosure
proceeding while they negotiated for a dacion en pago was illegal and done in bad faith is without merit.
As respondent-spouses themselves admitted, they failed to comply with the documentary requirements
imposed by the petitioner for proper evaluation of their proposal. In any event, petitioner had found
the subdivision lots offered for dacion as unacceptable, not only because the lots were not owned by
respondents as in fact, the lots were not yet titled but also for the reason that respondent Oscar
Martinezs claimed right therein was doubtful or inchoate, and hence not in esse.
Requests by debtors-mortgagors for extensions to pay and proposals for restructuring of the loans,
without acceptance by the creditor-mortgagee, remain as that. Without more, those proposals neither
novated the parties mortgage contract nor suspended its execution. In the same vein, negotiations for
settlement of the mortgage debt by dacion en pago do not extinguish the same nor forestall the
creditor-mortgagees exercise of its right to foreclose as provided in the mortgage contract.

3. Respondent-spouses alleged proprietary right in the mortgaged condominium unit appears to be

based merely on respondents averment that respondent OJ-Mark Trading, Inc. is a family corporation.

However, there is neither allegation nor evidence to show prima facie that such purported right,
whether as majority stockholder or creditor, was superior to that of petitioner as creditor-mortgagee.
The rule requires that in order for a preliminary injunction to issue, the application should clearly allege
facts and circumstances showing the existence of the requisites. It must be emphasized that an
application for injunctive relief is construed strictly against the pleader.

4. The contention that the family home is exempt from execution sale does not hold water.

The contention that the family home is exempt from execution is entirely inconsistent with the clear
contractual agreement of the REM. Assuming arguendo that the mortgaged condominium unit
constitutes respondents family home, the same will not exempt it from foreclosure as Article 155 (3) of
the same Code allows the execution or forced sale of a family home for debts secured by mortgages on
the premises before or after such constitution. Respondents thus failed to show an ostensible right
that needs protection of the injunctive writ.