chap 11 - LTD

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G.R. No. 156364 September 3, 2007

JACOBUS BERNHARD HULST, petitioner,vs.PR BUILDERS, INC., respondent.

D E C I S I O N

AUSTRIA-MARTINEZ, J .:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules ofCourt 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 ofa 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) acomplaint for rescission of contract with interest, damages and attorney's fees, docketed asHLRB Case No. IV6-071196-0618.

On April 22, 1997, HLURB Arbiter Ma. Perpetua Y. Aquino (HLURB Arbiter) rendered aDecision2 in favor of spouses Hulst, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of thecomplainant, rescinding the Contract to Sell and ordering respondent to:

1) Reimburse complainant the sum of P3,187,500.00, representing the purchase pricepaid by the complainants to P.R. Builders, plus interest thereon at the rate of twelvepercent (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 topetitioner .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

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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 levymade by the Sheriff was set aside, requiring the Sheriff to levy first on respondent's personalproperties.6 Sheriff Jaime B. Ozaeta (Sheriff) tried to implement the writ as directed but the writwas returned unsatisfied.7

On January 26, 1999, upon petitioner's motion, the HLURB Arbiter issued an Alias Writ ofExecution.8

On March 23, 1999, the Sheriff levied on respondent's 15 parcels of land covered by 13 TransferCertificates 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 leviedproperties 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 UrgentMotion to Quash Writ of Levy with the HLURB on the ground that the Sheriff made an overlevysince the aggregate appraised value of the levied properties at P6,500.00 per sq mis P83,616,000.00, based on the Appraisal Repor t12 of Henry Hunter Bayne Co., Inc. datedDecember 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 tothe conduct of the public auction on the ground that respondent's Urgent Motion to Quash Writ ofLevy was pending resolution. Absent any restraining order from the HLURB, the Sheriffproceeded to sell the 15 parcels of land. Holly Properties Realty Corporation was the winningbidder for all 15 parcels of land for the total amount ofP5,450,653.33. The sum of P5,313,040.00was turned over to the petitioner in satisfaction of the judgment award after deducting the legalfees.14

At 4:15 p.m. of the same day, while the Sheriff was at the HLURB office to remit the legal feesrelative to the auction sale and to submit the Certificates of Sale15 for the signature of HLURBDirector Belen G. Ceniza (HLURB Director), he received the Order dated April 28, 2000 issuedby 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 anOrder 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 isPhP6,500.00 per square meter (or an aggregate value of PhP83,616,000.00) asindicated in the Hunter Baynes Appraisal Report, we definitely cannot agree with theposition of the Complainants and the Sheriff that the aggregate value of the 12,864.00-square meter levied properties is only around PhP6,000,000.00. The disparity betweenthe two valuations are [sic] so egregious that the Sheriff should have looked into thematter first before proceeding with the execution sale of the said properties, especiallywhen 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, issuedthe 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 saleproceeding is the amount for which the properties were bidded and sold during the publicauction and that, mere inadequacy of the price is not a sufficient ground to annul thesale, the court is justified to intervene where the inadequacy of the price shocks theconscience (Barrozo vs. Macaraeg, 83 Phil. 378). The difference betweenPhP83,616,000.00 and Php6,000,000.00 is PhP77,616,000.00 and it definitely invites our
















































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attention to look into the proceedings had especially so when there was only one bidder,the HOLLY PROPERTIES REALTY CORPORATION represented by Ma, ChandraCacho (par. 7, Sheriff's Return) and the auction sale proceedings was timely objected byRespondent's counsel (par. 6, Sheriff's Return) due to the pendency of the Urgent Motionto 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 determinedduring the auction sale, but the determination of the value of the properties leviedupon by the Sheriff taking into consideration Section 9(b) of the 1997 Rules of CivilProcedure x x x.

x x x x

It is very clear from the foregoing that, even during levy, the Sheriff has to consider thefair market value of the properties levied upon to determine whether they are sufficient tosatisfy the judgment, and any levy in excess of the judgment award is void (Buan v. Courtof 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 theRTC of Tanauan, Batangas, is hereby SET ASIDE and the said Sheriff is hereby directedto levy instead Respondent's real properties that are reasonably sufficient to enforce itsfinal and executory judgment, this time, taking into consideration not only the value of theproperties as indicated in their respective tax declarations, but also all the otherdeterminants at arriving at a fair market value, namely: the cost of acquisition, the currentvalue 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 1996HLURB Rules and Procedure, petitioner filed a Petition for Certiorari and Prohibition with the CAon September 27, 2000.

On October 30, 2002, the CA rendered herein assailed Decision20 dismissing the petition. TheCA held that petitioner's insistence that Barrozo v. Macaraeg 21 does not apply since said casestated that "when there is a right to redeem inadequacy of price should not be material" holds nowater as what is obtaining in this case is not "mere inadequacy," but an inadequacy that shocks

the senses; that Buan v. Court of Appeal s22

properly applies since the questioned levy covered15 parcels of land posited to have an aggregate value of P83,616,000.00 which shockinglyexceeded the judgment debt of only around P6,000,000.00.

Without filing a motion for reconsideration,23 petitioner took the present recourse on the soleground that:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE ARBITER'S ORDER SETTING ASIDE THE LEVY MADE BY THE SHERIFF ON THESUBJECT 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 andnational importance which completely escaped the attention of the HLURB Arbiter and the CA:



























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petitioner and his wife are foreign nationals who are disqualified under the Constitution fromowning 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 transferredor conveyed except to individuals, corporations, or associations qualified to acquireor hold lands of the public domain. (Emphasis supplied).

The capacity to acquire private land is made dependent upon the capacity to acquire or holdlands of the public domain. Private land may be transferred or conveyed only to individuals orentities "qualified to acquire lands of the public domain." The 1987 Constitution reserved the rightto participate in the disposition, exploitation, development and utilization of lands of the publicdomain for Filipino citizens25 or corporations at least 60 percent of the capital of which is ownedby Filipinos.26 Aliens, whether individuals or corporations, have been disqualified from acquiringpublic 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 fromacquiring and owning real property, it is unequivocal that the Contract to Sell entered into bypetitioner together with his wife and respondent is void. Under Article 1409 (1) and (7) of the CivilCode, all contracts whose cause, object or purpose is contrary to law or public policy and thoseexpressly prohibited or declared void by law are inexistent and void from the beginning. Article1410 of the same Code provides that the action or defense for the declaration of the inexistenceof a contract does not prescribe. A void contract is equivalent to nothing; it produces no civileffect.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 asthey are, because they are deemed in pari delicto or "in equal fault."30 In pari delicto is "auniversal 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 besold or delivered, or the money agreed to be paid, or damages for its violation; and where theparties 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 beengiven under a void contract to: (a) the innocent party (Arts. 1411-1412, Civil Code);33 (b) thedebtor who pays usurious interest (Art. 1413, Civil Code);34 (c) the party repudiating the voidcontract before the illegal purpose is accomplished or before damage is caused to a thirdperson and if public interest is subserved by allowing recovery (Art. 1414, CivilCode);35 (d) the incapacitated party if the interest of justice so demands (Art. 1415, CivilCode);36 (e) the party for whose protection the prohibition by law is intended if the agreement isnot illegal per se but merely prohibited and if public policy would be enhanced by permittingrecovery (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, CivilCode).39

It is significant to note that the agreement executed by the parties in this case is a Contract toSell and not a contract of sale. A distinction between the two is material in the determination ofwhen ownership is deemed to have been transferred to the buyer or vendee and, ultimately, theresolution 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 vendorhas lost and cannot recover the ownership of the property until and unless the contract of sale isitself resolved and set aside.40 On the other hand, a contract to sell is akin to a conditional salewhere 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 takeplace, the parties would stand as if the conditional obligation had never existed.41 In other words,





































































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in a contract to sell, the prospective seller agrees to transfer ownership of the property to thebuyer 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 automaticallytransfer to the buyer. The prospective seller still has to convey title to the prospective buyer byexecuting a contract of absolute sale.42

Since the contract involved here is a Contract to Sell, ownership has not yet transferred to thepetitioner when he filed the suit for rescission. While the intent to circumvent the constitutionalproscription on aliens owning real property was evident by virtue of the execution of the Contractto Sell, such violation of the law did not materialize because petitioner caused the rescission ofthe contract before the execution of the final deed transferring ownership.

Thus, exception (c) finds application in this case. Under Article 1414, one who repudiates theagreement 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 forrescission, which was granted by the HLURB, was not the fact that he is not allowed to acquireprivate land under the Philippine Constitution. But petitioner is entitled to the recovery only of theamount 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 asinterests 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 haslong been final and executory. Nothing is more settled in the law than that a decision that hasacquired finality becomes immutable and unalterable and may no longer be modified in anyrespect even if the modification is meant to correct erroneous conclusions of fact or law andwhether it was made by the court that rendered it or by the highest court of the land.45 The onlyrecognized 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 whenevercircumstances 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 beconsidered a void judgment, as it was rendered by a tribunal with jurisdiction over the subjectmatter of the complaint.47

Ineluctably, the HLURB Decision resulted in the unjust enrichment of petitioner at the expense ofrespondent. Petitioner received more than what he is entitled to recover under thecircumstances.

Article 22 of the Civil Code which embodies the maxim, nemo ex alterius incommode debetlecupletari (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 latterwithout 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, theprovisions of which were formulated as basic principles to be observed for the rightfulrelationship between human beings and for the stability of the social order; designed to indicatecertain norms that spring from the fountain of good conscience; guides for human conduct thatshould run as golden threads through society to the end that law may approach its supreme idealwhich is the sway and dominance of justice.48 There is unjust enrichment when a person unjustlyretains a benefit at the loss of another, or when a person retains money or property of anotheragainst 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 hisact of entering into a contract to sell that violates the constitutional proscription.

































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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 toreach and to complete justice where courts of law, through the inflexibility of their rules and wantof power to adapt their judgments to the special circumstances of cases, are incompetent to doso."50

The purpose of the exercise of equity jurisdiction in this case is to prevent unjust enrichment andto ensure restitution. Equity jurisdiction aims to do complete justice in cases where a court of lawis unable to adapt its judgments to the special circumstances of a case because of the inflexibilityof 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 amountof P137,613.33.52 Petitioner is only entitled to P3,187,500.00, the amount of the purchase priceof the real property paid by petitioner to respondent under the Contract to Sell. Thus, the Court inthe exercise of its equity jurisdiction may validly order petitioner to return the excess amountof P2,125,540.00.

The Court shall now proceed to resolve the single issue raised in the present petition: whetherthe CA seriously erred in affirming the HLURB Order setting aside the levy made by the Sheriffon the subject properties.

Petitioner avers that the HLURB Arbiter and Director had no factual basis for pegging the fairmarket value of the levied properties at P6,500.00 per sq m or P83,616,000.00; that reliance onthe appraisal report was misplaced since the appraisal was based on the value of land inneighboring developed subdivisions and on the assumption that the residential unit appraisedhad already been built; that the Sheriff need not determine the fair market value of the subjectproperties before levying on the same since what is material is the amount for which theproperties were bidded and sold during the public auction; that the pendency of any motion is nota 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 Directordid not categorically state the exact value of the levied properties, said properties cannot justamount to P6,000,000.00; that the HLURB Arbiter and Director correctly held that the valueindicated 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 samepursuant 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 ofthe 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 incash, certified bank check or other mode of payment acceptable to the judgmentobligee, the officer shall levy upon the properties of the judgment obligor of everykind and nature whatsoever which may be disposed of for value and not otherwiseexempt from execution, giving the latter the option to immediately choose whichproperty 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













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properties, if any, and then on the real properties if the personal properties areinsufficient 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 satisfythe judgment and lawful fees, he must sell only so much of the personal or realproperty as is sufficient to satisfy the judgment and lawful fees.

Real property, stocks, shares, debts, credits, and other personal property, or anyinterest in either real or personal property, may be levied upon in like manner and withlike effect as under a writ of attachment (Emphasis supplied).53

Thus, under Rule 39, in executing a money judgment against the property of the judgmentdebtor, the sheriff shall levy on all property belonging to the judgment debtor as is amplysufficient to satisfy the judgment and costs, and sell the same paying to the judgment creditor somuch of the proceeds as will satisfy the amount of the judgment debt and costs. Any excess inthe 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 theexecution sale.

Levy has been defined as the act or acts by which an officer sets apart or appropriates a part orthe whole of a judgment debtor's property for the purpose of satisfying the command of the writof execution.55 The object of a levy is to take property into the custody of the law, and therebyrender it liable to the lien of the execution, and put it out of the power of the judgment debtor todivert 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 theauthority 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 settingaside the levy conducted by the Sheriff for the reason that the auction sale conducted by thesheriff 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 auctionsale. Absent any order from the HLURB suspending the auction sale, the sheriff rightfullyproceeded with the auction sale. The winning bidder had already paid the winning bid. The legalfees had already been remitted to the HLURB. The judgment award had already been turnedover to the judgment creditor. What was left to be done was only the issuance of thecorresponding certificates of sale to the winning bidder. In fact, only the signature of the HLURBDirector 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 offacts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard foror the exercise of his own judgment upon the propriety or impropriety of the act done. If the lawimposes a duty upon a public officer and gives him the right to decide how or when the duty shallbe performed, such duty is discretionary and not ministerial. The duty is ministerial only when thedischarge of the same requires neither the exercise of official discretion nor judgment.59In thepresent case, all the requirements of auction sale under the Rules have been fully complied withto 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 meritoriouson the following grounds:




























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Firstly , the reliance of the HLURB Arbiter and Director, as well as the CA, on Barrozo v.Macaraeg 60 and Buan v. Court of Appeals61 is misplaced.

The HLURB and the CA misconstrued the Court's pronouncements in Barrozo. Barrozo involveda judgment debtor who wanted to repurchase properties sold at execution beyond the one-yearredemption 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 declarationshould 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 soinadequate as to shock the conscience of the court. Supposing that this issue is openeven after the one-year period has expired and after the properties have passed into thehands 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 reasonablevalue of the properties; and although defendant' answer avers that the assessed valuewasP3,960 it also avers that their real market value was P2,000 only. Anyway, mereinadequacy of price – which was the complaint' allegation – is not sufficientground 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 valuebeing P3,960 and the purchase price being in effect P1,864 (P464 sale price plusP1,400mortgage lien which had to be discharged) the conscience is not shocked uponexamining the prices paid in the sales in National Bank v. Gonzales, 45 Phil., 693and 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 ofprice should not be material because the judgment debtor may re-acquire theproperty or else sell his right to redeem and thus recover any loss he claims tohave 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, orwhen such inadequacy shocks one's conscience as to justify the courts to interfere; such doesnot follow when the law gives the owner the right to redeem as when a sale is made at publicauction,63 upon the theory that the lesser the price, the easier it is for the owner to effectredemption.64 When there is a right to redeem, inadequacy of price should not be materialbecause the judgment debtor may re-acquire the property or else sell his right to redeem andthus recover any loss he claims to have suffered by reason of the price obtained at the executionsale.65 Thus, respondent stood to gain rather than be harmed by the low sale value of theauctioned properties because it possesses the right of redemption. More importantly, the subjectmatter 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 andmeaning of a decision, no specific portion thereof should be isolated and resorted to, but thedecision must be considered in its entirety.66

As regards Buan, it is cast under an entirely different factual milieu. It involved the levy on twoparcels of land owned by the judgment debtor; and the sale at public auction of one wassufficient to fully satisfy the judgment, such that the levy and attempted execution of the secondparcel of land was declared void for being in excess of and beyond the original judgment awardgranted 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 satisfythe judgment and the lawful fees." Each of the 15 levied properties was successively bidded



























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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 leviedproperties for the total amount of P5,450,653.33 in full satisfaction of the judgment award andlegal 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 thecontingency addressed by Section 9, Rule 39 of the Rules of Court. In the levy of property, theSheriff 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 twospecific things to effect a levy upon a realty: (a) file with the register of deeds a copy of the orderof 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 Recordsdo 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 ofthe 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 tosatisfy the purposes of the writ, and on the other hand not to make an unreasonable andunnecessary levy.69 Because it is impossible to know the precise quantity of land or otherproperty necessary to satisfy an execution, the Sheriff should be allowed a reasonable marginbetween the value of the property levied upon and the amount of the execution; the fact that theSheriff levies upon a little more than is necessary to satisfy the execution does not render hisactions 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 tothe 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 thedelicate task of the enforcement and/or implementation of judgments, must, in the absence of arestraining 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 likewould 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 noauthority, on his own, to suspend the auction sale. His duty being ministerial, he has nodiscretion to postpone the conduct of the auction sale.

Finally , one who attacks a levy on the ground of excessiveness carries the burden of sustainingthat contention.72In the determination of whether a levy of execution is excessive, it is proper totake 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 isnot 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 ofthe 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 beenfully developed, that is, on the assumption that the residential units appraised had already beenbuilt. The Appraiser in fact made this qualification in its Appraisal Report: "[t]he property subjectof this appraisal has not been constructed. The basis of the appraiser is on the existing modelunits."74 Since it is undisputed that the townhouse project did not push through, the projectedvalue did not become a reality. Thus, the appraisal value cannot be equated with the fair marketvalue. The Appraisal Report is not the best proof to accurately show the value of the levied

properties as it is clearly self-serving.

































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Therefore, the Order dated August 28, 2000 of HLURB Arbiter Aquino and Director Ceniza inHLRB Case No. IV6-071196-0618 which set aside the sheriff's levy on respondent's realproperties, was clearly issued with grave abuse of discretion. The CA erred in affirming saidOrder.

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 inHLRB Case No. IV6-071196-0618 is declared NULL andVOID. HLURB Arbiter Aquino andDirector Ceniza are directed to issue the corresponding certificates of sale in favor of the winningbidder, Holly Properties Realty Corporation. Petitioner is ordered to return to respondent theamount of P2,125,540.00, without interest, in excess of the proceeds of the auction saledelivered to petitioner. After the finality of herein judgment, the amount of P2,125,540.00 shallearn 6% interest until fully paid.

SO ORDERED.

Ynares-Santiago, Chairperson, Chico-Nazario, Nachura, Reyes, JJ., concur.

REVELINA LIMSON,

Petitioner,

- versus -

WACK WACK CONDOMINIUM

CORPORATION,

Respondent.

G.R. No. 188802

Present:

CARPIO MORALES, Chairperson, J.,

BRION, PERALTA*

VILLARAMA, JR., and

MENDOZA,** JJ.

Promulgated:

February 14, 2011

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D E C I S I O N

CARPIO MORALES, J.

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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 thatfive 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 cutout 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 portionwas blocked by a shelf.




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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 withthe provision of the Philippine Electrical Code that stipulates ratingof 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 items2, 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 herhusband 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 whichreads:




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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, centralheating, central refrigeration and central air conditioning

equipment, reservoir, tanks, pumps and other central services andfacilities, pipes, ducts, flues, chutes, conduits wires and

other utility installations, wherever located, except the outlets

thereof when located within the unit. (emphasis and underscoringsupplied)

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 ExchangeCommission (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 andrecommendation of the Office of the Building Official ofMandaluyong City;

2. To seek payment of liquidated damages from the defendants inaccordance with the Resolution of the Board of Directors of

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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 totheir 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 ashighest 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 thequestioned electrical installations are to be considered as part of the

common area and not of Unit 703, though the same are necessarilyfound 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 structuralelements of the buildings; lobbies, stairways, hallways and other areas

of common use, elevator equipment and shafts,









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central heating, central refrigeration and central air conditioning

equipment, reservoir, tanks, pumps and other central services andfacilities, pipes, ducts, flues, chutes, conduits wires and other utility

installations, wherever located, except the outlets thereof whenlocated within the unit. (underscoring supplied; emphasis in theoriginal)[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.









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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:

x x x x

(e) All central and appurtenant equipment and installations forcommon 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 controlequipment; all common utility spaces and areas;

(f) All other parts of the Project and all apparatus, equipmentand installations therein which are for common use or necessary orconvenient for the existence, maintenance of safety of the Project.

(emphasis and underscoring supplied)

Section 3. Maintenance, Repairs and Alterations. (a) Allmaintenance 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, tenantor 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 resultingfrom his failure to effect such maintenance and repairs. Each Unitowner 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 underscoringsupplied)

x x x x

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:

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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 otherareas of common use, elevator equipment and shafts, central

heating, central refrigeration and central air conditioningequipment, reservoir, tanks, pumps and other central services andfacilities, 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. utilityinstallations, 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 byrespondent, viz:

a.) x x x [T]he electrical system of the Apartments commenceswith 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 thecommon main line, as there are units. EVERY SECONDARY

LINE TRAVELS VERTICALLY TO ITS DESIGNATEDFLOOR AND LEADS TO AN INDIVIDUAL UNIT.

b.) The construction is such, that every secondary line isembedded within the wall of a unit, until it surfaces from the

wall, ready to supply electricity to that unit; the UNIT, in thiscase, has two (2) metal boxes, inside the UNIT; both attached tothe 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





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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 separateelectrical 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 areconnected to the lower end of the two (2) big fuses in the main

switch box to draw electricity to feed the fuse box. x xx [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 houserules 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 disclaimresponsibility 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 mindof the unit owners
















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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 G.R. No. 163196

ASSOCIATION, INC.,

Petitioner, Present:

YNARES-SANTIAGO, J.,

Chairperson,

AUSTRIA-MARTINEZ,

- versus - CHICO-NAZARIO,

NACHURA, and

REYES, JJ.

AUGUSTO GATMAYTAN, Promulgated:

Respondent. July 4, 2008

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D E C I S I O N

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 erredin dismissing the petition in view of the fact that:

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(A) Section. 20 of Rep. Act No. 4726, as amended, otherwise known as the

Condominium Act, expressly grant the petitioner, being the acknowledgedassociation 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 inureto the benefit of, and be binding upon all units owners, purchasers,interchangeably or sometimes referred to in this Master of Deed with Dec. ofRestrictions 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, Page24, Bk. I, s. of 1974 of the Not. Pub. for Rizal, M. Perez, Cardenasamong 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 FMCAIin the sum of P775,786.17, inclusive of interests, penalties and attorney's fees,













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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 asamended by Act 4118. The allegation simply does not show a mortgagor-mortgagee 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 AdministrativeMatter No. 99-10-05-0, as amended dated March 1, 2001, covers extra-

judicial foreclosure of real estate mortgages under R.A. No. 3135 and chattel

mortgages under P.D. No. 1508. There is nothing in the above mentionedCircular which authorizes the Executive Judge and/or the Ex-Officio Sheriffto extra judicially foreclose properties covered by obligations other than the

said mortgages. Hence, the subject petition is not proper for extra-judicialforeclosure under the supervision of the Executive Judge. Dismissal of thesubject 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:




















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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 theClerk of Court who is also the Ex-Oficio Sheriff.

Hence, it is not within the authority of the Executive Judge to supervise andapprove extra judicial foreclosures of mortgages.

WHEREFORE, the request for extra-judicial foreclosure of the subjectcondominium 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 titlesand 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













































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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 mandamu s[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 lawspecifically enjoins as a duty resulting from an office, trust, or station, orunlawfully 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 bedone 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 for mandamus 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, whetherunder 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 ExecutiveJudge, 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, asamended) x x x.

























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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 ownerthereof 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 beregistered with the Register of Deeds of the city or province where such

condominium project is located . The notice shall state the amount of suchassessment and such other charges thereon as may be authorized by thedeclaration 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 paymentof 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 theregistration 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 ofmortgages. (Emphasis supplied.)












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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. 99-

10-05-0, 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 clearright 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.





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