G.R. No.

109068 January 10, 1994

GAUDENCIO GUERRERO, petitioner,
vs.
REGIONAL TRIAL COURT OF ILOCOS NORTE, BR. XVI, JUDGE LUIS B. BELLO, JR.,
PRESIDING, and PEDRO G. HERNANDO, respondents.

Filed by petitioner as an accion publicana 1 against private respondent, this case assumed another
dimension when it was dismissed by respondent Judge on the ground that the parties being
brother-in-law the complaint should have alleged that earnest efforts were first exerted towards a
compromise.
Admittedly, the complaint does not allege that the parties exerted earnest towards a compromise
and that the same failed. However, private respondent Pedro G. Hernando apparently overlooked
this alleged defect since he did not file any motion to dismiss nor attack the complaint on this
ground in his answer. It was only on 7 December 1992, at the pre-trial conference, that the
relationship of petitioner Gaudencio Guerrero and respondent Hernando was noted by respondent
Judge Luis B. Bello, Jr., they being married to half-sisters hence are brothers-in-law, and on the
basis thereof respondent Judge gave petitioner five (5) days "to file his motion and amended
complaint" to allege that the parties were very close relatives, their respective wives being sisters,
and that the complaint to be maintained should allege that earnest efforts towards a compromise
were exerted but failed. Apparently, respondent Judge considered this deficiency a jurisdictional
defect.
On 11 December 1992, Guerrero moved to reconsider the 7 December 1992 Order claiming that
since brothers by affinity are not members of the same family, he was not required to exert efforts
towards a compromise. Guerrero likewise argued that Hernando was precluded from raising this
issue since he did not file a motion to dismiss nor assert the same as an affirmative defense in his
answer.
On 22 December 1992, respondent Judge denied the motion for reconsideration holding that
"[f]ailure to allege that earnest efforts towards a compromise is jurisdictional such that for failure to
allege same the court would be deprived of its jurisdiction to take cognizance of the case." He
warned that unless the complaint was amended within five (5) days the case would be dismissed.
On 29 January 1993, the 5-day period having expired without Guerrero amending his complaint,
respondent Judge dismissed the case, declaring the dismissal however to be without prejudice.
Guerrero appeals by way of this petition for review the dismissal by the court a quo. He raises
these legal issues: (a) whether brothers by affinity are considered members of the same family
contemplated in Art. 217, par. (4), and Art. 222 of the New Civil Code, as well as under Sec. 1,
par. (j), Rule 16, of the Rules of Court requiring earnest efforts towards a compromise before a
suit between them may be instituted and maintained; and, (b) whether the absence of an
allegation in the complaint that earnest efforts towards a compromise were exerted, which efforts
failed, is a ground for dismissal for lack of jurisdiction.
The Constitution protects the sanctity of the family and endeavors to strengthen it as a basic
autonomous social institution. 2 This is also embodied in Art. 149, 3 and given flesh in Art. 151, of
the Family Code, which provides:

Art. 151. No suit between members of the same family shall prosper unless it
should appear from the verified complaint or petition that earnest efforts
toward a compromise have been made, but that the same had failed. If it is
shown that no such efforts were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
Considering that Art. 151 herein-quoted starts with the negative word "No", the requirement is
mandatory 4 that the complaint or petition, which must be verified, should allege that earnest
efforts towards a compromise have been made but that the same failed, so that "[i]f it is shown
that no such efforts were in fact made, the case must be dismissed."
Further, Art. 151 is contemplated by Sec. 1, par. (j), Rule 16, of the Rules of Court which provides
as a ground for motion to dismiss "(t)hat the suit is between members of the same family and no
earnest efforts towards a compromise have been made."
The Code Commission, which drafted the precursor provision in the Civil Code, explains the
reason for the requirement that earnest efforts at compromise be first exerted before a complaint
is given due course
This rule is introduced because it is difficult to imagine a sadder and more
tragic spectacle than a litigation between members of the same family. It is
necessary that every effort should be made toward a compromise before a
litigation is allowed to breed hate and passion in the family. It is known that a
lawsuit between close relatives generates deeper bitterness than between
strangers . . . A litigation in a family is to be lamented far more than a lawsuit
between strangers . . . 5
But the instant case presents no occasion for the application of the
above-quoted provisions. As early as two decades ago, we already ruled in Gayon v. Gayon 6 that
the enumeration of "brothers and sisters" as members of the same family does not comprehend
"sisters-in-law". In that case, then Chief Justice Concepcion emphasized that "sisters-in-law"
(hence, also "brothers-in-law") are not listed under Art. 217 of the New Civil Code as members of
the same family. Since Art. 150 of the Family Code repeats essentially the same enumeration of
"members of the family", we find no reason to alter existing jurisprudence on the matter.
Consequently, the court a quo erred in ruling that petitioner Guerrero, being a brother-in-law of
private respondent Hernando, was required to exert earnest efforts towards a compromise before
filing the present suit.
In his Comment, Hernando argues that ". . . although both wives of the parties were not
impleaded, it remains a truism that being spouses of the contending parties, and the litigation
involves ownership of real property, the spouses' interest and participation in the land in question
cannot be denied, making the suit still a suit between half-sisters . . ." 7
Finding this argument preposterous, Guerrero counters in his Reply that his "wife has no actual
interest and participation in the land subject of the . . . suit, which the petitioner bought, according
to his complaint, before he married his wife." 8 This factual controversy however may be best left
to the court a quo to resolve when it resumes hearing the case.
As regards the second issue, we need only reiterate our ruling in
O'Laco v. Co Cho Chit, 9 citing Mendoza v. Court of Appeals, 10 that the attempt to compromise as
well as the inability to succeed is a condition precedent to the filing of a suit between members of

the same family, the absence of such allegation in the complaint being assailable at any stage of
the proceeding, even on appeal, for lack of cause of action.
It is not therefore correct, as petitioner contends, that private respondent may be deemed to have
waived the aforesaid defect in failing to move or dismiss or raise the same in the Answer. On the
other hand, we cannot sustain the proposition of private respondent that the case was, after all,
also dismissed pursuant to Sec. 3, Rule 17, of the Rules of Court 11 for failure of petitioner to
comply with the court's order to amend his complaint.
A review of the assailed orders does not show any directive which Guerrero supposedly defied.
The Order of 7 December 1992 merely gave Guerrero five (5) days to file his motion and
amended complaint with a reminder that the complaint failed to allege that earnest efforts were
exerted towards a compromise. The Order of 22 December 1992, which denied Guerrero's motion
for reconsideration, simply stated that "Plaintiff if it (sic) so desire must
amend the complaint otherwise, the court will have to dismiss the case (emphasis supplied) . . ."
The Order of 29 January 1993 dismissing the case without prejudice only made reference to an
earlier order "admonishing" counsel for Guerrero to amend the complaint, and an "admonition" is
not synonymous with "order". Moreover, since the assailed orders do not find support in our
jurisprudence but, on the other hand, are based on an erroneous interpretation and application of
the law, petitioner could not be bound to comply with them. 12
WHEREFORE, the petition is GRANTED and the appealed Orders of
7 December 1992, 22 December 1992 and 29 January 1993 are SET ASIDE. The Regional Trial
Court of Laoag City, Branch 16, or whichever branch of the court the case may now be assigned,
is directed to continue with Civil Case
No. 10084-16 with deliberate dispatch.
SO ORDERED.

G.R. No. 86355 May 31, 1990

JOSE MODEQUILLO, petitioner,
vs.
HON. AUGUSTO V. BREVA FRANCISCO SALINAS,
The issue in this petition is whether or not a final judgment of the Court of Appeals in an action for
damages may be satisfied by way of execution of a family home constituted under the Family
Code.
The facts are undisputed.
On January 29, 1988, a judgment was rendered by the Court of Appeals in CA-G.R. CV No.
09218 entitled"Francisco Salinas, et al. vs. Jose Modequillo, et al.," the dispositive part of which
read as follows:
WHEREFORE, the decision under appeal should be, as it is hereby, reversed
and set aside. Judgment is hereby rendered finding the defendants-appellees
Jose Modequillo and Benito Malubay jointly and severally liable to plaintiffsappellants as hereinbelow set forth. Accordingly, defendants-appellees are
ordered to pay jointly and severally to:
1. Plaintiffs-appellants, the Salinas spouses:

On July 7, 1988, the sheriff levied on a parcel of residential land located at Poblacion Malalag,
Davao del Sur containing an area of 600 square meters with a market value of P34,550.00 and
assessed value of P7,570.00 per Tax Declaration No. 87008-01359, registered in the name of
Jose Modequillo in the office of the Provincial Assessor of Davao del Sur; and a parcel of
agricultural land located at Dalagbong Bulacan, Malalag, Davao del Sur containing an area of 3
hectares with a market value of P24,130.00 and assessed value of P9,650.00 per Tax Declaration
No. 87-08-01848 registered in the name of Jose Modequillo in the office of the Provincial
Assessor of Davao del Sur. 2
A motion to quash and/or to set aside levy of execution was filed by defendant Jose Modequillo
alleging therein that the residential land located at Poblacion Malalag is where the family home is
built since 1969 prior to the commencement of this case and as such is exempt from execution,
forced sale or attachment under Articles 152 and 153 of the Family Code except for liabilities
mentioned in Article 155 thereof, and that the judgment debt sought to be enforced against the
family home of defendant is not one of those enumerated under Article 155 of the Family Code.
As to the agricultural land although it is declared in the name of defendant it is alleged to be 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 was not approved by the proper government agency. An
opposition thereto was filed by the plaintiffs.
In an order dated August 26, 1988, the trial court denied the motion. A motion for reconsideration
thereof was filed by defendant and this was denied for lack of merit on September 2, 1988.

a. the sum of P5,000.00 for hospitalization expenses of Renato Culan- Culan;

and

Hence, the herein petition for review on certiorari wherein it is alleged that the trial court erred and
acted in excess of its jurisdiction in denying petitioner's motion to quash and/or to set aside levy
on the properties and in denying petitioner' motion for reconsideration of the order dated August
26, 1988. Petitioner contends that only a question of law is involved in this petition. He asserts that
the residential house and lot was first occupied as his family residence in 1969 and was duly
constituted as a family home under the Family Code which took effect on August 4, 1988. Thus,
petitioner argues that the said residential house and lot is exempt from payment of the obligation
enumerated in Article 155 of the Family Code; and that the decision in this case pertaining to
damages arising from a vehicular accident took place on March 16, 1976 and which became final
in 1988 is not one of those instances enumerated under Article 155 of the Family Code when the
family home may be levied upon and sold on execution. It is further alleged that the trial court
erred in holding that the said house and lot became a family home only on August 4, 1988 when
the Family Code became effective, and that the Family Code cannot be interpreted in such a way
that all family residences are deemed to have been constituted as family homes at the time of
their occupancy prior to the effectivity of the said Code and that they are exempt from execution
for the payment of obligations incurred before the effectivity of said Code; and that it also erred
when it declared that Article 162 of the Family Code does not state that the provisions of Chapter
2, Title V have a retroactive effect.

b. P5,000.00 for moral damages.

Articles 152 and 153 of the Family Code provide as follows:

a. the amount of P30,000.00 by way of compensation for the death of their

son Audie Salinas;
b. P10,000.00 for the loss of earnings by reason of the death of said Audie
Salinas;
c. the sum of P5,000.00 as burial expenses of Audie Salinas; and
d. the sum of P5,000.00 by way of moral damages.
2. Plaintiffs-appellants Culan-Culan:

3. Both plaintiff-appellants Salinas and Culan-Culan, P7,000.00 for attorney's

fees and litigation expenses.

Art. 152. The family home, constituted jointly by the husband and the wife or
by an unmarried head of a family, is the dwelling house where they and their
family reside, and the land on which it is situated.

All counterclaims and other claims are hereby dismissed. 1

The said judgment having become final and executory, a writ of execution was issued by the
Regional Trial Court of Davao City to satisfy the said judgment on the goods and chattels of the
defendants Jose Modequillo and Benito Malubay at Malalag, Davao del Sur.

Art. 153. The family home is deemed constituted on a house and lot from the
time it is occupied as a family residence. From the time of its constitution and
so long as any of 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.

Under the Family Code, a family home is deemed constituted on a house and lot from the time it is
occupied as a family residence. There is no need to constitute the same judicially or extrajudicially
as required in the Civil Code. If the family actually resides in the premises, it is, therefore, a family
home as contemplated by law. Thus, the creditors should take the necessary precautions to
protect their interest before extending credit to the spouses or head of the family who owns the
home.
Article 155 of the Family Code also provides as follows:
Art. 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 mortgages 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.
The exemption provided as aforestated is effective from the time of the constitution of the family
home as such, and lasts so long as any of its beneficiaries actually resides therein.
In the present case, the residential house and lot of petitioner was not constituted as a family
home whether judicially or extrajudicially under the Civil Code. It became a family home by
operation of law only under Article 153 of the Family Code. It is deemed constituted as a family
home upon the effectivity of the Family Code on August 3, 1988 not August 4, one year after its
publication in the Manila Chronicle on August 4, 1987 (1988 being a leap year).
The contention of petitioner 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 is provided that "the provisions of this Chapter shall also govern existing family
residences insofar as said provisions are applicable." It does not mean that Articles 152 and 153
of said Code 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 execution for the payment of obligations incurred before the
effectivity of the Family Code. Article 162 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. Article 162 does not
state that the provisions of Chapter 2, Title V have a retroactive effect.
Is the family home of petitioner exempt from execution of the money judgment aforecited No. The
debt or liability which was the basis of the judgment arose or was incurred at the time of the
vehicular accident on March 16, 1976 and the money judgment arising therefrom was rendered by
the appellate court on January 29, 1988. Both preceded the effectivity of the Family Code on
August 3, 1988. This case does not fall under the exemptions from execution provided in the
Family Code.
As to the agricultural land subject of the execution, the trial court correctly ruled that the levy to be
made by the sheriff shall be on whatever rights the petitioner may have on the land.

WHEREFORE, the petition is DISMISSED for lack of merit. No pronouncement as to costs.

SO ORDERED.

G.R. No. 97898 August 11, 1997

FLORANTE F. MANACOP, petitioner,
vs.
COURT OF APPEALS and E & L MERCANTILE, INC.
May a writ of execution of a final and executory judgment issued before the effectivity of the
Family Code be executed on a house and lot constituted as a family home under the provision of
said Code?
State of the Case
This is the principal question posed by petitioner in assailing the Decision of
Respondent Court of Appeals 1 in CA-G.R. SP No. 18906 promulgated on February 21,
1990 and its Resolution promulgated on March 21, 1991, affirming the orders issued by
the trial court commanding the issuance of various writs of execution to enforce the
latter's decision in Civil Case No. 53271.
The Facts
Petitioner Florante F. Manacop 2 and his wife Eulaceli purchased on March 10, 1972 a
446-square-meter residential lot with a bungalow, in consideration of P75,000.00. 3 The
property, located in Commonwealth Village, Commonwealth Avenue, Quezon City, is
covered by Transfer Certificate of Title No. 174180.
On March 17, 1986, Private Respondent E & L Merchantile, Inc. filed a complaint
against petitioner and F.F. Manacop Construction Co., Inc. before the Regional Trial
Court of Pasig, Metro Manila to collect an indebtedness of P3,359,218.45. Instead of
filing an answer, petitioner and his company entered into a compromise agreement with
private respondent, the salient portion of which provides:
c. That defendants will undertake to pay the amount of P2,000,000.00 as and
when their means permit, but expeditiously as possible as their collectibles
will be collected. (sic)
On April 20, 1986, the trial court rendered judgment approving the aforementioned
compromise agreement. It enjoined the parties to comply with the agreement in good
faith. On July 15, 1986, private respondent filed a motion for execution which the lower
court granted on September 23, 1986. However, execution of the judgment was
delayed. Eventually, the sheriff levied on several vehicles and other personal properties
of petitioner. In partial satisfaction of the judgment debt, these chattels were sold at
public auction for which certificates of sale were correspondingly issued by the sheriff.
On August 1, 1989, petitioner and his company filed a motion to quash the alias writs of
execution and to stop the sheriff from continuing to enforce them on the ground that the
judgment was not yet executory. They alleged that the compromise agreement had not
yet matured as there was no showing that they had the means to pay the indebtedness
or that their receivables had in fact been collected. They buttressed their motion with
supplements and other pleadings.

On August 11, 1989, private respondent opposed the motion on the following grounds:
(a) it was too late to question the September 23, 1986 Order considering that more than
two years had elapsed; (b) the second alias writ of execution had been partially
implemented; and (c) petitioner and his company were in bad faith in refusing to pay
their indebtedness notwithstanding that from February 1984 to January 5, 1989, they
had collected the total amount of P41,664,895.56. On September 21, 1989, private
respondent filed an opposition to petitioner and his company's addendum to the motion
to quash the writ of execution. It alleged that the property covered by TCT No. 174180
could not be considered a family home on the grounds that petitioner was already living
abroad and that the property, having been acquired in 1972, should have
been judiciallyconstituted as a family home to exempt it from execution.
On September 26, 1989, the lower court denied the motion to quash the writ of
execution and the prayers in the subsequent pleadings filed by petitioner and his
company. Finding that petitioner and his company had not paid their indebtedness even
though they collected receivables amounting to P57,224,319.75, the lower court held
that the case had become final and executory. It also ruled that petitioner's residence
was not exempt from execution as it was not duly constituted as a family home,
pursuant to the Civil Code.
Hence, petitioner and his company filed with the Court of Appeals a petition
for certiorari assailing the lower court's Orders of September 23, 1986 and September
26, 1989. On February 21, 1990, Respondent Court of Appeals rendered its now
questioned Decision dismissing the petition for certiorari. The appellate court quoted
with approval the findings of the lower court that: (a) the judgment based on the
compromise agreement had become final and executory, stressing that petitioner and
his company had collected the total amount of P57,224,319.75 but still failed to pay their
indebtedness and (b) there was no showing that petitioner's residence had been duly
constituted as a family home to exempt it from execution. On the second finding, the
Court of Appeals added that:
. . . . We agree with the respondent judge that there is no showing in evidence
that petitioner Maacop's residence under TCT 174180 has been duly
constituted as a family home in accordance with law. For one thing, it is the
clear implication of Article 153 that the family home continues to be so
deemed constituted so long as any of its beneficiaries enumerated in Article
154 actually resides therein. Conversely, it ceases to continue as such family
home if none of its beneficiaries actually occupies it. There is no showing in
evidence that any of its beneficiaries is actually residing therein. On the other
hand, the unrefuted assertion of private respondent is that petitioner Florante
Maacop had already left the country and is now, together with all the
members of his family, living in West Covina, Los Angeles, California, U.S.A.
Petitioner and his company filed a motion for reconsideration of this Decision on the
ground that the property covered by TCT No. 174180 was exempt from execution. On
March 21, 1991, the Court of Appeals rendered the challenged Resolution denying the
motion. It anchored its ruling on Modequillo v. Breva, 4 which held that "all existing family
residences at the time of the effectivity of the Family Code are considered family homes
and areprospectively entitled to the benefits accorded to a family home under the
Family Code."
Applying the foregoing pronouncements to this case, the Court of Appeals explained:
The record of the present case shows that petitioners incurred the debt of
P3,468,000.00 from private respondent corporation on February 18, 1982

(Annex "A", Petition). The judgment based upon the compromise agreement
was rendered by the court on April 18, 1986 (Annex "C", ibid). Paraphrasing
the aforecited Modequillo case, both the debt and the judgment preceded the
effectivity of the Family Code on August 3, 1988. Verily, the case at bar does
not fall under the exemptions from execution provided under Article 155 of the
Family Code.
Undeterred, petitioner filed the instant petition for review on certiorari arguing that the
Court of Appeals misapplied Modequillo. He contends that there was no need for him to
constitute his house and lot as a family home for it to be treated as such since he was
and still is a resident of the same property from the time "it was levied upon and up to
this moment."
The Issue
As stated in the opening sentence of this Decision, the issue in this case boils down to
whether a final and executory decision promulgated and a writ of execution issued
before the effectivity of the Family Code can be executed on a family home constituted
under the provisions of the said Code.
The Court's Ruling
We answer the question in the affirmative. The Court of Appeals committed no
reversible error. On the contrary, its Decision and Resolution are supported by law and
applicable jurisprudence.
No Novel Issue
At the outset, the Court notes that the issue submitted for resolution in the instant case
is not entirely new. InManacop v. Court of Appeals, 5 petitioner himself as a party therein
raised a similar question of whether this very same property was exempt
from preliminary attachment for the same excuse that it was his family home. In said
case, F.F. Cruz & Co., Inc. filed a complaint for a sum of money. As an incident in the
proceedings before it, the trial court issued writ of attachment on the said house and lot.
In upholding the trial court (and the Court of Appeals) in that case, we ruled that
petitioner incurred the indebtedness in 1987 or prior to the effectively of the Family
Code on August 3, 1988. Hence, petitioner's family home was not exempt from
attachment "by sheer force of exclusion embodied in paragraph 2, Article 155 of the
Family Code cited in Modequillo," where the Court categorically ruled:
Under the Family Code, a family home is deemed constituted on a house and
lot from the time it is occupied as a family residence. There is no need to
constitute the same judicially or extrajudicially as required in the Civil Code. If
the family actually resides in the premises, it is, therefore, a family home as
contemplated by law. Thus, the creditors should take the necessary
precautions to protect their interest before extending credit to the spouses or
head of the family who owns the home.

(1) For nonpayment of taxes;

(2) For debts incurred prior to the constitution of the family home;
(3) For debts secured by mortgages on the premises before or after such
constitution; and
(4) For debts due to laborer, mechanics, architects, builders, materialmen and
others who have rendered service or furnished material for the construction of
the building.
The exemption provided as aforestated is effective from the time of the
constitution of the family home as such, and lasts so long as any of its
beneficiaries actually resides therein.
In the present case, the residential house and lot of petitioner was not
constituted as a family home whether judicially or extrajudicially under the
Civil Code. It became a family home by operation of law only under Article
153 of the Family Code. It is deemed constituted as a family home upon the
effectivity of the Family Code on August 3, 1988 not August 4, one year after
its publication in the Manila Chronicle on August 4, 1987 (1988 being a leap
year).
The contention of petitioner that it should be considered a family home from
the time it was occupied by petitioner and his family in 1960 is not well-taken.
Under Article 162 of the Family Code, it is provided that "the provisions of this
Chapter shall also govern existing family residences insofar as said
provisions are applicable." It does not mean that Articles 152 and 153 of said
Code 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
execution for the payment of obligations incurred before the effectivity of the
Family Code. Article 162 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, Article 162 does not state that provisions of Chapter 2, Title
V have a retroactive effect.
Is the family home of petitioner exempt from execution of the money judgment
aforecited? No. The debt or liability which was the basis of the judgment
arose or was incurred at the time of the vehicular accident on March 16, 1976
and the money judgment arising therefrom was rendered by the appellate
court on January 29, 1988. Both preceded the effectivity of the Family Code
on August 3, 1988. This case does not fall under the exemptions from
execution provided in the Family Code. 6 (Emphasis supplied.)
Article 153 of the Family Code
Has No Retroactive Effect

Article 155 of the Family Code also provides as follows:

Art. 155. The family home shall be exempt from execution, forced sale or
attachment except:

Petitioner contends that the trial court erred in holding that his residence was not
exempt from execution in view of his failure to show that the property involved "has
been duly constituted as a family home in accordance with law." He asserts that the
Family Code and Modequillo require simply the occupancy of the property by the
petitioner, without need for its judicial or extrajudicial constitution as a family home. 7

Petitioner is only partly correct. True, under the Family Code which took effect on
August 3, 1988, 8 the subject property became his family home under the simplified
process embodied in Article 153 of said code. However,Modequillo explicitly ruled that
said provision of the Family Code does not have retroactive effect. In other words, prior
to August 3, 1988, the procedure mandated by the Civil Code 9 had to be followed for a
family home to be constituted as such. There being absolutely no proof that the subject
property was judicially or extrajudicially constituted as a family home, it follows that the
law's protective mantle cannot be availed of by petitioner. Since the debt involved
herein was incurred and the assailed orders of the trial court issued prior to August 3,
1988, the petitioner cannot be shielded by the benevolent provisions of the Family
Code.
List of Beneficiary-Occupants Restricted
to Those Enumerated in the Code
In view of the foregoing discussion, there is no reason to address the other arguments
of petitioner other than to correct his misconception of the law. Petitioner contends that
he should be deemed residing in the family home because his stay in the United States
is merely temporary. He asserts that the person staying in the house is his overseer and
that whenever his wife visited this country, she stayed in the family home. This
contention lacks merit.
The law explicitly provides that occupancy of the family home either by the owner
thereof or by "any of its beneficiaries" must be actual. That which is "actual" is
something real, or actually existing, as opposed to something merely possible, or to
something which is presumptive or constructive. 10 Actual occupancy, however, need
not be by the owner of the house specifically. Rather, the property may be occupied by
the "beneficiaries" enumerated by Article 154 of the Family Code.
Art. 154. The beneficiaries of a family home are:
(1) The husband and wife, or an unmarried person who is the head of the
family; and
(2) Their parents, ascendants, descendants, brothers and sisters, whether the
relationship be legitimate or illegitimate, who are living in the family home and
who depend upon the head of the family for lead support.
This enumeration may include the in-laws where the family home is constituted jointly
by the husband and wife. 11 But the law definitely excludes maids and overseers. They
are not the beneficiaries contemplated by the Code. Consequently, occupancy of a
family home by an overseer like Carmencita V. Abat in this case 12 is insufficient
compliance with the law.
WHEREFORE, the petition is hereby DENIED for utter lack of merit. This Decision is
immediately executory. Double costs against petitioner.
SO ORDERED.

G.R. No. 108532 March 9, 1999

PABLITO TANEO, JR., JOSE TANEO, NENA T. CATUBIG and HUSBAND, CILIA T. MORING
and HUSBAND,petitioners,
vs.
COURT OF APPEALS and ABDON GILIG, respondents.

As counterclaim, private respondent alleged that since petitioners are still in possession of the
subject property, he has been deprived of acts of ownership and possession and therefore,
prayed for payment of rentals from February, 1968 until possession has been restored to them.
In its decision of March 27, 1989, the RTC dismissed the complaint.
The dispositive portion thereof reads as follows:
Premises considered, Judgment is hereby rendered in favor of the defendant
and against the plaintiffs, ordering the dismissal of the complaint filed by the
plaintiffs;

KAPUNAN, J.:
The issues in this case are not novel: whether or not the conveyance made by way of the sheriff's
sale pursuant to the writ of execution issued by the trial court in Civil Case No. 590 is prohibited
under Sec. 118 of Commonwealth Act No. 141; and whether or not the family home is exempt
from execution.

a) Declaring OCT No. P-12820 and Free Patent No

548906 both in the name of Pablo Taneo as null and void
and directing the Register of Deeds to cancel the same,
without prejudice however on the part of the defendant to
institute legal proceedings for the transfer of the said title
in the name of defendant Abdon Gilig;

As a result of a judgment in Civil Case No. 590 (for recovery of property) in favor of private
respondent, two (2) of petitioners' properties were levied to satisfy the judgment amount of about
P5,000.00: one was a parcel of land located in Barrio Igpit, Municipality of Opol, Misamis Oriental
with an area of about five (5) hectares, and the other was the family home also located at Igpit,
Opol, Misamis Oriental. The subject properties were sold at public auction on February 12, 1966
to the private respondent as the highest bidder. Consequently, after petitioners' failure to redeem
the same, a final deed of conveyance was executed on February 9, 1968, definitely selling,
transferring, and conveying said properties to the private respondent.

b) Declaring Abdon Gilig as the absolute and legal owner

of the land covered by OCT No. P-12820, and covered
by Tax Declaration No. 851920, and hence entitled to the
possession of the same and as a necessary concomitant,
admonishing the plaintiffs to refrain from disturbing the
peaceful possession of the defendant over the land in
question.

To forestall such conveyance, petitioners filed an action on November 5, 1985 (docketed as Civil
Case No. 10407) to declare the deed of conveyance void and to quiet title over the land with a
prayer for a writ of preliminary injunction. In their complaint, it was alleged that petitioners are the
children and heirs of Pablo Taneo and Narcisa Valaceras who died on February 12, 1977 and
September 12, 1984, respectively. Upon their death, they left the subject property covered by
OCT No. P-12820 and Free Patent No. 548906. Considering that said property has been acquired
through free patent, such property is therefore inalienable and not subject to any encumbrance for
the payment of debt, pursuant to Commonwealth Act No. 141. Petitioners further alleged that they
were in continuous, open and peaceful possession of the land and that on February 9, 1968.
Deputy Provincial Sheriff Jose V. Yasay issued a Sheriffs Deed of Conveyance in favor of the
private respondent over the subject property including their family home which was extrajudicially
constituted in accordance with law. As a result of the alleged illegal deed of conveyance, private
respondent was able to obtain in his name Tax Declaration No. 851920 over the land, thus casting
a cloud of doubt over the title and ownership of petitioners over said property.

c) Likewise declaring the defendant Abdon Gilig as the

true and absolute owner of the house in question
formerly declared under Tax Declaration No. 4142 in the
name of Pablo Taneo and presently declared under Tax
Declaration No 851916 in the name of Abdon Gilig;
ordering the plaintiffs or any of their representatives to
vacate and return the possession of the same to
defendant Abdon Gilig;
d) Ordering the plaintiffs, except the nominal parties
herein, to pay to defendant Abdon Gilig the amount of
P500.00 a month as reasonable rental of the house in
question to be reckoned from February 9, 1968 until the
possession of the same is returned to the defendant.

Private respondent refuted 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, 1996. Said sale has become final as no redemption was made within one
year from the registration of the Sheriffs Certificate of Sale. The validity of the sale in favor of
Abdon Gilig was even confirmed by the Court of Appeals in a related case (CA No. 499965-R)
entitled "Arriola v. Gilig," where one Rufino Arriola also claimed ownership over the subject
property.
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 final only in
1979.

e) To pay to defendant the amount of P5,000.00 as

attorney's fees and to pay the costs.
SO ORDERED. 1
On appeal, the Court of Appeals affirmed in toto the decision of the RTC.
Hence, this petition.
The petition is devoid of merit.

In resolving the issues, the lower court made the following findings of fact which this Court finds
no cogent reason to disturb:
1. That the land in question originally belonged to Lazaro
Ba-a who sold the same to the late Pablito (sic) Taneo
father of the herein plaintiff on September 18, 1941, by
virtue of an Escritura de Venta identified as Reg. Not. 50;
pages 53, Foleo Not. V, Series of 1941 of the Notarial
Register of Ernie Pelaez (Exh. 10);
2. That on July 19, 1951 Abdon Gilig with his wife filed a
Civil Case No. 590 for recovery of property against Pablo
Taneo, et al., wherein Judgment was rendered on June
24, 1964, in favor of Abdon Gilig and against Pablo
Taneo ordering the latter to pay damages in the amount
of P5,000.00 (Exh. 2);
3. That by virtue of said decision, a writ of Execution was
issued on November 22, 1965 against the properties of
Pablo Taneo and on December 1, 1965, a Notice of Levy
was executed by the Clerk of Court Pedro Perez wherein
the properties in question were among the properties
levied by the Sheriff (Exh 3);
4. That the said properties were sold at public auction
wherein the defendant Abdon Gilig came out as the
highest bidder and on February 12, 1965, a Sheriffs
Certificate of Sale was executed by Ex-Oficio Provincial
Sheriff Pedro Perez (Exh. 1) ceding the said properties in
favor of Abdon Gilig and which Certificate of Sale was
registered with the Register of Deeds on March 2, 1966;
5. That for failure to redeem the said property within the
reglementary period, a Sheriffs final Deed of Conveyance
was executed by same Provincial Sheriff Jose V. Yasay
on February 1968, (Exhs. 4, 4-A) conveying the property
definitely to Abdon Gilig.
6. That on April 20, 1966, after his third-party claim which
he filed with the Sheriff in Civil Case No. 590 was not
given due course, Rufino Arriola filed Civil Case No. 2667
entitledArriola vs. Abdon Gilig, et al., for Recovery of
Property and/or annulment of Sale with Damages;
7. That Judgment was rendered by the Court thru Judge
Bernardo Teves dismissing the case with costs on
February 21, 1969;
8. That said decision was appealed to the Court of
Appeals which affirmed the decision in toto on June 20,
979, declaring the alleged Deed of Sale executed by
Abdon Gilig in favor of the plaintiff as null and void for
being simulated or fictitious and executed in fraud or (sic)
creditors;

9. That on March 7, 1964, Pablo Taneo constituted the

house in question erected on the land of Plutarco
Vacalares as a family home (Exh. F) but was however,
notarized only on May 2, 1965 and registered with the
Register of Deeds on June 24, 1966.
10. That in the meanwhile, unknown to the defendant,
Pablo Taneo applied for a free patent on the land in
question which was approved on October 13, 1973, (Exh.
B) and the Patent and Title issued on December 10,
1980 (Oct No. P-12820 - Exh. 12);
11. On November 3, 1985, the plaintiff filed the present
action. 2
Petitioners contend that under Section 118 of Commonwealth Act No. 141, the subject land which
they inherited from their father under free patent cannot be alienated or encumbered in violation of
the law. Citing in particular the cases of Oliveros v. Porciongcola 3 and Gonzaga v. Court of
Appeals, 4 the execution or auction sale of the litigated land falls within the prohibited period and
is. likewise, a disavowal of the rationale of the law which is to give the homesteader or patentee
every chance to preserve for himself and his family the land which the State had gratuitously given
to him as a reward for his labor in cleaning and cultivating it. 5
We are not unmindful of the intent of the law. In fact, in Republic v. Court of Appeals, 6 the Court
elucidated, to wit:
It is well-known that the homestead laws were designed to distribute
disposable agricultural lots of the State to land-destitute citizens for their
home and cultivation. Pursuant to such benevolent intention the State
prohibits the sale or encumbrance of the homestead (Section 116) within five
years after the grant of the patent. After that five-year period the law impliedly
permits alienation of the favor homestead; but in line with the primordial
purpose to favor the homesteader and his family the statute provides that
such alienation or conveyance (Section 117) shall be subject to the right of
repurchase by the homesteader, his widow of heirs within five years. This
Section 117 is undoubtedly a complement of Section 116. It aims to preserve
and keep in the family of the homesteader that portion of public land which
the State had gratuitously given to him. It would, therefore, be in keeping with
this fundamental idea to hold, as we hold, that the right to repurchase exists
not only when the original homesteader makes the conveyance, but also
when it is made by his widow or heirs. This construction is clearly deducible
from the terms of the statute.
The intent of the law is undisputable but under the facts of the case, the prohibition invoked by the
petitioners under Section 118 does not apply to them.
Sec. 118 of Commonwealth Act No. 141 reads:
Except in favor of the Government or any of its branches, units or institution,
or legally constituted banking corporations, lands acquired under free patent
or homestead provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a term of five years
from and after the date of issuance of the patent or grant, nor shall they
become liable to the satisfaction of any debt contracted prior to the expiration

of said period, but the improvements or crops on the land may be mortgaged
or pledged to qualified persons, associations, or corporations.

Anent the second issue, petitioners aver that the house which their father constituted as family
home is exempt from execution. In a last ditch effort to save their property, petitioners invoke the
benefits accorded to the family home under the Family Code.

xxx xxx xxx

The prohibition against alienation of lands acquired by homestead or free patent commences on
the date of the approval of the application for free patent and the five-year period is counted from
the issuance of the patent. The reckoning point is actually the date of approval of the application.
In Amper v. Presiding Judge, 7 the Court held that:
. . . The date when the prohibition against the alienation of lands acquired by
homesteads or free patents commences is "the date of the approval of the
application" and the prohibition embraces the entire five-year period "from
and after the date of issuance of the patent or, grant." As stated in Beniga v.
Bugas, (35 SCRA 111), the provision would make no sense if the prohibition
starting "from the date of the approval of the application" would have no
termination date.
The specific period of five years within which the alienation or encumbrance
of a homestead is restricted starts to be computed from the date of the
issuance of the patent. But the prohibition of alienation commences from the
date the application is approved which comes earlier. (Emphasis ours.)
Following this ruling, we agree with the respondent court that the conveyance made by way of the
sheriff's sale was not violative of the law. The judgment obligation of the petitioners against Abdon
Gilig arose on June 24, 1964. The properties were levied and sold at public auction with Abdon
Gilig as the highest bidder on February 12, 1966. On February 9, 1968, the final deed of
conveyance ceding the subject property to Abdon Gilig was issued after the petitioners failed to
redeem the property after the reglementary period. Pablo Taneo`s application for free parent was
approved only on October 19, 1973.
The sequence of the events leads us to the inescapable conclusion that even before the
application for homestead had been approved, Pablo Taneo was no longer the owner of the land.
The deed of conveyance issued on February 9, 1968 finally transferred the property to Abdon
Gilig. As of that date, Pablo Taneo did not actually have transferred to herein petitioners. The
petitioners are not the owners of the land and cannot claim to be such by invoking Commonwealth
Act No. 141. The prohibition does not apply since it is clear from the records that the judgment
debt and the execution sale took place prior to the approval of the application for free patent. We
quote with favor the respondent court's valid observation on the matter:
. . . the application of Pablo Taneo for a free patent was approved only on 19
October 1973 and Free Patent was issued on 10 December 1980. Under the
aforecited provision, the subject land could not be made liable for the
satisfaction of any debt contracted from the time of the application and during
the 5-year period following 10 December 1980, or until 10 December 1985.
However, debts contracted prior to the approval of the application for free
patent, that is prior to 18 October 1973, are not covered by the prohibition.
This is because they do not fall within the scope of the prohibited period. In
this case, the judgment debt in favor of defendant-appellee was rendered on
24 June 1964, the writ of execution issued on 22 November 1965, notice of
levy made on 1 December 1965, the execution sale held on 12 February
1966, and the certificate of sale registered on 2 March 1966, all before Pablo
Taneo's application for free patent was approved on 19 October 1973. The
execution, therefore, was not violative of the law. 8

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 specials cases.
Under the Civil Code (Articles 224 to 251), a family home may be constituted judicial 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. 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, petitioner's 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 (Mondequillo 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 petitioner's 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," Plaintiff's Position Paper and Memorandum of Authorities, p. 78)." (pp. 56, Decision; pp. 64-65, Rollo) (emphasis 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.
Art. 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.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

G.R. No. 165060

November 27, 2008

ALBINO JOSEF, petitioner,

vs.
OTELIO SANTOS, respondent.
This petition for review on certiorari under Rule 45 of the Rules of Court assails the November 17,
20031 Resolution of the Court of Appeals in CA-G.R. SP No. 80315, dismissing petitioners special
civil action of certiorari for failure to file a prior motion for reconsideration, and the May 7,
20042Resolution denying the motion for reconsideration.
Petitioner Albino Josef was the defendant in Civil Case No. 95-110-MK, 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, Branch 272, found petitioner liable to
respondent in the amount of P404,836.50 with interest at 12% per annum reckoned from January
9, 1995 until full payment.3
Petitioner appealed4 to the Court of Appeals, which affirmed the trial courts decision in
toto.5Petitioner filed before this Court a petition for review on certiorari, but it was dismissed in a
Resolution dated February 18, 2002.6 The Judgment became final and executory on May 21,
2002.
On February 17, 2003, respondent moved for issuance of a writ of execution,7 which was opposed
by petitioner.8 In an Order dated July 16, 2003,9 the trial court granted the motion, the dispositive
portion of which reads, as follows:
WHEREFORE, premises considered, the motion for issuance of writ of execution is
hereby granted. Let a writ of execution be issued commanding the Sheriff of this Court
to execute the decision dated December 18, 1996.
SO ORDERED.10
A writ of execution was issued on August 20, 200311 and enforced on August 21, 2003. On August
29, 2003, certain personal properties subject of the writ of execution were auctioned off.
Thereafter, a real property located at Marikina City and covered by Transfer Certificate of Title
(TCT) No. N-105280 was sold on October 28, 2003 by way of public auction to fully satisfy the
judgment credit. Respondent emerged as the winning bidder and a Certificate of Sale12 dated
November 6, 2003 was issued in his favor.
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 covered by TCT No. N-105280 was his family home thus exempt from execution.
On November 17, 2003, the Court of Appeals issued the assailed Resolution dismissing the
petition for failure of petitioner to file a motion for reconsideration of the trial courts July 16, 2003
Order granting the motion for execution and ordering the issuance of a writ therefor, as well as for
his failure to indicate in his petition the timeliness of its filing as required under the Rules of Court.
On May 7, 2004, the appellate court denied petitioners motion for reconsideration.

Thus, the instant petition which raises the following issues:

I.
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.
II.
WHETHER OR NOT THE DISMISSAL OF THE PETITIONERS PETITION FOR
CERTIORARI BY THE HONORABLE COURT OF APPEALS IS JUSTIFIED UNDER
THE CIRCUMSTANCES.
Petitioner argues that the trial court sheriff erroneously attached, levied and sold on execution the
real property covered by TCT No. N-105280 because the same is his family home; that the
execution sale was irregular because it was conducted without complying with the notice and
posting of requirements; and that the personal and real properties were sold for inadequate prices
as to shock the conscience. The real property was allegedly worth P8 million but was sold for only
P848,448.64.
Petitioner also argues that the appellate court gravely abused its discretion in dismissing the
petition based purely on technical grounds, i.e., his failure to file a motion for reconsideration of
the trial courts order granting execution, and his failure to indicate in his petition for certiorari the
timeliness of filing the same with the Court of Appeals.
Respondent, on the other hand, argues that petitioners alleged family home has not been shown
to have been judicially or extrajudicially constituted, obviously referring to the provisions on family
home of the Civil Code not those of the Family Code which should apply in this case; that
petitioner has not shown to the courts satisfaction that the personal properties executed upon and
sold belonged to his children. Respondent argues that he is entitled to satisfaction of judgment
considering the length of time it took for the parties to litigate and the various remedies petitioner
availed of which have delayed the case.
The petition is meritorious.
Petitioner, in his opposition to respondents motion for issuance of a writ of execution, claimed that
he was insolvent; that he had no property to answer for the judgment credit; that the house and lot
in which he was residing at the time was his family home thus exempt from execution; that the
household furniture and appliances found therein are likewise exempt from execution; and that
these furniture and appliances belonged to his children Jasmin Josef and Jean Josef Isidro. Thus,
as early as during proceedings prior to the issuance of the writ of execution, petitioner brought to
the fore the issue of exemption from execution of his home, which he claimed to be a family home
in contemplation of the civil law.
However, instead of inquiring into the nature of petitioners allegations in his opposition, the trial
court ignored the same and granted respondents motion for execution. The full text of the July 16,
2003 Order provides, as follows:
This resolves the "Motion for the Issuance of Writ of Execution" filed by plaintiff thru
counsel and the "Opposition" thereto filed by the defendant on her own behalf.

The records show that a decision was rendered by this Court in favor of the plaintiff on
December 18, 1995 which decision was affirmed by the Court of Appeals on June 26,
2001 and by the Supreme Court on February 18, 2002. On June 18, 2003, this Court
received the entire records of the case from the Court of Appeals.
Considering the foregoing, it is now the ministerial duty of the Court to issue a writ of
execution pursuant to Sec. 1, Rule 39 of the Rules of Court.
WHEREFORE, premises considered, the motion for issuance of writ of execution is
hereby granted. Let a writ of execution be issued commanding the Sheriff of this Court
to execute the decision dated December 18, 1996.
SO ORDERED.13
The above Order did not resolve nor take into account petitioners allegations in his Opposition,
which are material and relevant in the resolution of the motion for issuance of a writ of execution.
This is serious error on the part of the trial court. It should have made an earnest determination of
the truth to petitioners claim that the house and lot in which he and his children resided was their
duly constituted family home. Since it did not, its July 16, 2003 Order is thus null and void. Where
a judgment or judicial order is void it may be said to be a lawless thing, which can be treated as an
outlaw and slain at sight, or ignored wherever and whenever it exhibits its head.14
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. It cannot be seized by creditors except in certain special cases. 15
Upon being apprised that the property subject of execution allegedly constitutes petitioners family
home, the trial court should have observed the following procedure:
1. Determine if petitioners obligation to respondent falls under either of the exceptions
under Article 15516 of the Family Code;
2. Make an inquiry into the veracity of petitioners claim that the property was his family
home;17conduct an ocular inspection of the premises; an examination of the title; an
interview of members of the community where the alleged family home is located, in
order to determine if petitioner actually resided within the premises of the claimed family
home; order a submission of photographs of the premises, depositions, and/or affidavits
of proper individuals/parties; or a solemn examination of the petitioner, his children and
other witnesses. At the same time, the respondent is given the opportunity to crossexamine and present evidence to the contrary;
3. If the property is accordingly found to constitute petitioners family home, the court
should determine:
a) if the obligation sued upon was contracted or incurred prior to, or after, the
effectivity of the Family Code;18
b) if petitioners spouse is still alive, as well as if there are other beneficiaries
of the family home;19
c) if the petitioner has more than one residence for the purpose of
determining which of them, if any, is his family home;20 and

d) its actual location and value, for the purpose of applying the provisions of
Articles 15721and 16022 of the Family Code.
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. 23 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,24 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.25
Respondent moved for issuance of a writ of execution on February 17, 2003 while petitioner filed
his opposition on June 23, 2003. The trial court granted the motion on July 16, 2003, and the writ
of execution was issued on August 20, 2003. Clearly, the trial court had enough time to conduct
the crucial inquiry that would have spared petitioner the trouble of having to seek relief all the way
to this Court. Indeed, the trial courts inaction on petitioners plea resulted in serious injustice to
the latter, not to mention that its failure to conduct an inquiry based on the latters claim bordered
on gross ignorance of the law.
Being void, the July 16, 2003 Order could not have conferred any right to respondent. Any writ of
execution based on it is likewise void. Although we have held in several cases 26 that a claim for
exemption from execution of the family home should be set up and proved before the sale of the
property at public auction, and failure to do so would estop the party from later claiming the
exemption since the right of exemption is a personal privilege granted to the judgment debtor
which must be claimed by the judgment debtor himself at the time of the levy or within a
reasonable period thereafter, the circumstances of the instant case are different. Petitioner
claimed exemption from execution of his family home soon after respondent filed the motion for
issuance of a writ of execution, thus giving notice to the trial court and respondent that a property
exempt from execution may be in danger of being subjected to levy and sale. Thereupon, the trial
court is called to observe the procedure as herein laid out; on the other hand, the respondent
should observe the procedure prescribed in Article 160 of the Family Code, that is, to obtain an
order for the sale on execution of the petitioners family home, if so, and apply the proceeds less
the maximum amount allowed by law under Article 157 of the Code which should remain with the
petitioner for the rebuilding of his family home to his judgment credit. Instead, both the trial court
and respondent completely ignored petitioners argument that the properties subject of the writ are
exempt from execution.
Indeed, petitioners resort to the special civil action of certiorari in the Court of Appeals was
belated and without benefit of the requisite motion for reconsideration, however, considering the
gravity of the issue, involving as it does matters that strike at the very heart of that basic social
institution which the State has a constitutional and moral duty to preserve and protect, as well as
petitioners constitutional right to abode, all procedural infirmities occasioned upon this case must
take a back seat to the substantive questions which deserve to be answered in full.
WHEREFORE, the Petition for Review on Certiorari is GRANTED. The November 17, 2003 and
May 7, 2004 Resolutions of the Court of Appeals in CA-G.R. SP No. 80315 are REVERSED and
SET ASIDE. The July 16, 2003 Order of the Regional Trial Court of Marikina City, Branch 272 in
Civil Case No. 95-110-MK, as well as the writ or writs of execution thus issued in said case, are

herebyDECLARED VOID, and all acts proceeding therefrom and any title obtained by virtue
thereof are likewise DECLARED VOID.
The trial court is hereby DIRECTED (1) to conduct a solemn inquiry into the nature of the real
property covered by Transfer Certificate of Title No. N-105280, with a view toward determining
whether the same is petitioner Albino Josefs family home, and if so, apply the pertinent provisions
of the Family Code and Rule 39 of the Rules of Court; and (2) to conduct an inquiry into the
ownership of all other properties that were levied upon and sold, with the aim of determining as
well whether these properties are exempt from execution under existing law.
Respondent Otelio Santos is hereby DIRECTED to hold the abovementioned real and personal
properties, or the proceeds thereof, in trust to await the outcome of the trial courts inquiry.
Finally, the trial court is DIRECTED to resolve, with utmost dispatch, Civil Case No. 95-110-MK
within sixty (60) days from receipt of a copy of this Decision.
SO ORDERED.

G.R. No. 185064

January 16, 2012

SPOUSES ARACELI OLIVA-DE MESA and ERNESTO S. DE MESA, Petitioner,

vs.
SPOUSES CLAUDIO D. ACERO, JR.
Nature of the Petition
This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by the Spouses
Araceli Oliva-De Mesa (Araceli) and Ernesto S. De Mesa (Ernesto), assailing the Court of
Appeals (CA) Decision1 dated June 6, 2008 and Resolution2 dated October 23, 2008 in CA-G.R.
CV No. 79391 entitled "Spouses Araceli Oliva-De Mesa and Ernesto De Mesa v. Spouses Claudio
Acero, Jr., et al."

Unable to collect the aforementioned rentals due, Claudio and his wife Ma. Rufina Acero (Rufina)
(collectively referred to as Spouses Acero) filed a complaint for ejectment with the Municipal Trial
Court (MTC) of Meycauayan, Bulacan against the petitioners and Juanito. In their defense, the
petitioners claimed that Spouses Acero have no right over the subject property. The petitioners
deny that they are mere lessors; on the contrary, they are the lawful owners of the subject
property and, thus cannot be evicted therefrom.
On July 22, 1999, the MTC rendered a Decision,6 giving due course to Spouses Aceros complaint
and ordering the petitioners and Juanito to vacate the subject property. Finding merit in Spouses
Aceros claims, the MTC dismissed the petitioners' claim of ownership over the subject property.
According to the MTC, title to the subject property belongs to Claudio as shown by TCT No. T221755 (M).

The Antecedent Facts

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 Sheriff Samonte, the regularity of the public sale that was
conducted thereafter and the legitimacy of Claudios Torrens title that was resultantly issued.

This involves a parcel of land situated at No. 3 Forbes Street, Mount Carmel Homes Subdivision,
Iba, Meycauayan, Bulacan, which was formerly covered by Transfer Certificate of Title (TCT) No.
T-76.725 (M) issued by the Register of Deeds of Meycauayan, Bulacan and registered under
Aracelis name. The petitioners jointly purchased the subject property on April 17, 1984 while they
were still merely cohabiting before their marriage. A house was later constructed on the subject
property, which the petitioners thereafter occupied as their family home after they got married
sometime in January 1987.

The petitioners appealed the MTCs July 22, 1999 Decision to the RTC. This appeal was,
however, dismissed in a Decision dated November 22, 1999 due to the petitioners failure to
submit their Memorandum. The petitioners sought reconsideration of the said decision but the
same was denied in an Order dated January 31, 2000.

Sometime in September 1988, Araceli obtained a loan from Claudio D. Acero, Jr. (Claudio) in the
amount ofP100,000.00, which was secured by a mortgage over the subject property. As payment,
Araceli issued a check drawn against China Banking Corporation payable to Claudio.
When the check was presented for payment, it was dishonored as the account from which it was
drawn had already been closed. The petitioners failed to heed Claudios subsequent demand for
payment.
Thus, on April 26, 1990, Claudio filed with the Prosecutor's Office of Malolos, Bulacan a complaint
for violation of Batas Pambansa Blg. 22 (B.P. 22) against the petitioners. After preliminary
investigation, an information for violation of B.P. 22 was filed against the petitioners with the
Regional Trial Court (RTC) of Malolos, Bulacan.
On October 21, 1992, the RTC rendered a Decision3 acquitting the petitioners but ordering them
to pay Claudio the amount of P100,000.00 with legal interest from date of demand until fully paid.
On March 15, 1993, a writ of execution was issued and Sheriff Felixberto L. Samonte (Sheriff
Samonte) levied upon the subject property. On March 9, 1994, the subject property was sold on
public auction; Claudio was the highest bidder and the corresponding certificate of sale was
issued to him.
Sometime in February 1995, Claudio leased the subject property to the petitioners and a certain
Juanito Oliva (Juanito) for a monthly rent of P5,500.00. However, the petitioners and Juanito
defaulted in the payment of the rent and as of October 3, 1998, their total accountabilities to
Claudio amounted to P170,500.00.
Meanwhile, on March 24, 1995, a Final Deed of Sale4 over the subject property was issued to
Claudio and on April 4, 1995, the Register of Deeds of Meycauayan, Bulacan cancelled TCT No.
T-76.725 (M) and issued TCT No. T-221755 (M)5 in his favor.

Consequently, the petitioners filed a petition for review7 with the CA assailing the RTCs
November 22, 1999 Decision and January 31, 2000 Order. In a December 21, 2006 Decision, 8 the
CA denied the petitioners petition for review. This became final on July 25, 2007.9
In the interregnum, on October 29, 1999, the petitioners filed against the respondents a
complaint10 to nullify TCT No. T-221755 (M) and other documents with damages with the RTC of
Malolos, Bulacan. Therein, the petitioners asserted 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 March 15, 1993 writ of execution.
On September 3, 2002, the RTC rendered a Decision,11 which dismissed the petitioners
complaint. Citing Article 155(3) of the Family Code, the RTC ruled that even assuming that the
subject property is a family home, the exemption from execution does not apply. A mortgage was
constituted over the subject property to secure the loan Araceli obtained from Claudio and it was
levied upon as payment therefor.
The petitioners sought reconsideration of the RTCs September 3, 2002 Decision but this was
denied in a Resolution12 dated January 14, 2003.
On appeal, the CA affirmed the RTCs disposition in its Decision13 dated June 6, 2008. The CA
ratiocinated that the exemption of a family home from execution, attachment or forced sale under
Article 153 of the Family Code is not automatic and should accordingly be raised and proved to
the Sheriff prior to the execution, forced sale or attachment. The appellate court noted that at no
time did the petitioners raise the supposed exemption of the subject property from execution on
account of the same being a family home.
The petitioners then sought reconsideration of the said June 6, 2008 Decision but the same was
denied by the CA in its Resolution14 dated October 23, 2008.

Aggrieved, the petitioners filed the instant petition for review, praying for the cancellation of TCT
No. T-221755 (M). They insist that the execution sale that was conducted is a nullity considering
that the subject property is a family home. The petitioners assert that, contrary to the disposition of
the CA, a prior demonstration that the subject property is a family home is not required before it
can be exempted from execution.
In their Comment,15 Spouses Acero claimed that this petition ought to be denied on the ground of
forum-shopping as the issues raised had already been determined by the MTC in its July 22, 1999
Decision on the complaint for ejectment filed by them, which had already become final and
executory following the petitioners failure to appeal the CAs December 21, 2006 Decision
affirming it.
Issues
The threshold issues for resolution are the following: (a) whether the petitioners are guilty of
forum-shopping; and (b) whether the lower courts erred in refusing to cancel Claudios Torrens
title TCT No. T-221755 (M) over the subject property.
The Courts Ruling
First Issue: Forum-Shopping
On the first issue, we find that the petitioners are not guilty of forum-shopping.
There is forum-shopping when as a result of an adverse decision in one forum, or in anticipation
thereof, a party seeks a favorable opinion in another forum through means other than an appeal
or certiorari. Forum-shopping exists when two or more actions involve the same transactions,
essential facts, and circumstances; and raise identical causes of action, subject matter, and
issues.16
Forum-shopping exists where the elements of litis pendentia are present, and where a final
judgment in one case will amount to res judicata in the other. The elements of forum-shopping
are: (a) identity of parties, or at least such parties as would represent the same interest in both
actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same
facts; and (c) identity of the two preceding particulars such that any judgment rendered in the
other action will, regardless of which party is successful, amount to res judicata in the action under
consideration.17
There is no identity of issues and reliefs prayed for in the ejectment case and in the action to
cancel TCT No. T-221755 (M). Verily, the primordial issue in the ejectment case is who among the
contending parties has a better right of possession over the subject property while ownership is
the core issue in an action to cancel a Torrens title.
It is true that the petitioners raised the issue of ownership over the subject property in the
ejectment case. However, the resolution thereof is only provisional as the same is solely for the
purpose of determining who among the parties therein has a better right of possession over the
subject property.
Accordingly, a judgment rendered in an ejectment case is not a bar to action between the same
parties respecting title to the land or building. Neither shall it be conclusive as to the facts therein.
This issue is far from being novel and there is no reason to depart from this Courts previous
pronouncements. In Malabanan v. Rural Bank of Cabuyao, Inc.,18 this Court had previously
clarified that a decision in an ejectment case is not res judicata in an annulment of title case and

vice-versa given the provisional and inconclusive nature of the determination of the issue of
ownership in the former.
Forum-shopping exists where the elements of litis pendentia are present, namely: (a) identity of
parties or at least such as representing the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the relief being founded on the same facts; and (c) the identity in
the two cases should be such that the judgment that may be rendered in one would, regardless of
which party is successful, amounts to res judicata in the other.
Petitioner and respondent are the same parties in the annulment and ejectment cases. The issue
of ownership was likewise being contended, with same set of evidence being presented in both
cases. However, it cannot be inferred that a judgment in the ejectment case would amount to res
judicata in the annulment case, and vice-versa.
This issue is hardly a novel one. It has been laid to rest by heaps of cases iterating the principle
that a judgment rendered in an ejectment case shall not bar an action between the same parties
respecting title to the land or building nor shall it be conclusive as to the facts therein found in a
case between the same parties upon a different cause of action involving possession.
It bears emphasizing that in ejectment suits, the only issue for resolution is the physical or material
possession of the property involved, independent of any claim of ownership by any of the party
litigants. However, the issue of ownership may be provisionally ruled upon for the sole purpose of
determining who is entitled to possession de facto. Therefore, the provisional determination of
ownership in the ejectment case cannot be clothed with finality.
Corollarily, the incidental issue of whether a pending action for annulment would abate an
ejectment suit must be resolved in the negative.
A pending action involving ownership of the same property does not bar the filing or consideration
of an ejectment suit, nor suspend the proceedings. This is so because an ejectment case is simply
designed to summarily restore physical possession of a piece of land or building to one who has
been illegally or forcibly deprived thereof, without prejudice to the settlement of the parties'
opposing claims of juridical possession in appropriate proceedings. 19(citations omitted)
Second Issue: Nullification of TCT No. T-221755 (M)
Anent the second issue, this Court finds that the CA did not err in dismissing the petitioners
complaint for nullification of TCT No. T-221755 (M).
The subject property is a family home.
The petitioners maintain that the subject property is a family home and, accordingly, the sale
thereof on execution was a nullity. In Ramos v. Pangilinan,20 this Court laid down the rules relative
to exemption of family homes from execution:
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. Hence, two sets of rules are applicable.
If the family home was constructed before the effectivity of the Family Code or before August 3,
1988, then it must have been constituted either judicially or extra-judicially as provided
under Articles 225, 229-231 and 233 of the Civil Code. Judicial constitution of the family home
requires the filing of a verified petition before the courts and the registration of the courts order

with the Registry of Deeds of the area where the property is located. Meanwhile, extrajudicial
constitution is governed by Articles 240 to 242 of the Civil Code and involves the execution of a
public instrument which must also be registered with the Registry of Property. Failure to comply
with either one of these two modes of constitution will bar a judgment debtor from availing of the
privilege.
On the other hand, for family homes constructed after the effectivity of the Family Code on August
3, 1988, there isno need to constitute extrajudicially or judicially, and the exemption is
effective from the time it was constituted and lasts as long as any of its beneficiaries under Art.
154 actually resides therein. Moreover, the family home should belong to the absolute community
or conjugal partnership, or if exclusively by one spouse, its constitution must have been with
consent of the other, and its value must not exceed certain amounts depending upon the area
where it is located. Further, the debts incurred for which the exemption does not apply as provided
under Art. 155 for which the family home is made answerable must have been incurred after
August 3, 1988.21 (citations omitted)
In the earlier case of Kelley, Jr. v. Planters Products, Inc.,22 we stressed that:
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.23 (emphasis supplied and citation omitted)
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. 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.
The family homes exemption from execution must be set up and proved to the Sheriff
before the sale of the property at public auction.
Despite the fact that the subject property is a family home and, thus, should have been exempt
from execution, we nevertheless rule that the CA did not err in dismissing the petitioners

complaint for nullification of TCT No. T-221755 (M). We agree with the CA that the petitioners
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. As the CA aptly pointed
out:
In the light of the facts above summarized, it is evident that appellants did not assert their claim of
exemption within a reasonable time. Certainly, reasonable time, for purposes of the law on
exemption, does not mean a time after the expiration of the one-year period provided for in
Section 30 of Rule 39 of the Rules of Court for judgment debtors to redeem the property sold on
execution, otherwise it would render nugatory final bills of sale on execution and defeat the very
purpose of execution to put an end to litigation. x x x.24
The foregoing disposition is in accord with the Courts November 25, 2005 Decision in Honrado v.
Court of Appeals,25 where it was categorically stated that at no other time can the status of a
residential house as a family home can be set up and proved and its exemption from execution be
claimed but before the sale thereof at public auction:
While it is true that the family home is constituted on a house and lot from the time it is occupied
as a family residence and is exempt from execution or forced sale under Article 153 of the Family
Code, such claim for exemption should be set up and proved to the Sheriff before the sale of the
property at public auction. Failure to do so would estop the party from later claiming the
exemption. As this Court ruled in Gomez v. Gealone:
Although the Rules of Court does not prescribe the period within which to claim the exemption, the
rule is, nevertheless, well-settled that the right of exemption 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 at the
time of the levy or within a reasonable period thereafter;
"In the absence of express provision it has variously held that claim (for exemption) must be made
at the time of the levy if the debtor is present, that it must be made within a reasonable time, or
promptly, or before the creditor has taken any step involving further costs, or before advertisement
of sale, or at any time before sale, or within a reasonable time before the sale, or before the sale
has commenced, but as to the last there is contrary authority."
In the light of the facts above summarized, it is self-evident that appellants did not assert their
claim of exemption within a reasonable time. Certainly, reasonable time, for purposes of the law
on exemption, does not mean a time after the expiration of the one-year period provided for in
Section 30 of Rule 39 of the Rules of Court for judgment debtors to redeem the property sold on
execution, otherwise it would render nugatory final bills of sale on execution and defeat the very
purpose of executionto put an end to litigation.1awphil We said before, and We repeat it now,
that litigation must end and terminate sometime and somewhere, and it is essential to an effective
administration of justice that, once a judgment has become final, the winning party be not, through
a mere subterfuge, deprived of the fruits of the verdict. We now rule that claims for exemption
from execution of properties under Section 12 of Rule 39 of the Rules of Court must be presented
before its sale on execution by the sheriff.26 (citations omitted)
Reiterating the foregoing in Spouses Versola v. Court of Appeals,27 this Court stated that:
Under the cited provision, a family home is deemed constituted on a house and lot from the time it
is occupied as a family residence; there is no need to constitute the same judicially or
extrajudicially.
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. x x x.28 (emphasis supplied and citations omitted)
Having failed to set up and prove to the sheriff the supposed exemption of the subject property
before the sale thereof at public auction, the petitioners now are barred from raising the same.
Failure to do so estop them from later claiming the said exemption.
Indeed, the family home is a sacred symbol of family love and is the repository of cherished
memories that last during ones lifetime.29 It is likewise without dispute that the family home, from
the time of its constitution and so long as any of its beneficiaries actually resides therein, is
generally exempt from execution, forced sale or attachment.30
The family home is a real right, which is gratuitous, inalienable and free from attachment. It cannot
be seized by creditors except in certain special cases. 31 However, this right can be waived or be
barred by laches by the failure to set up and prove the status of the property as a family home at
the time of the levy or a reasonable time thereafter.
In this case, it is undisputed that the petitioners allowed a considerable time to lapse before
claiming that the subject property is a family home and its exemption from execution and forced
sale under the Family Code. The petitioners allowed the subject property to be levied upon and
the public sale to proceed. One (1) year lapsed from the time the subject property was sold until a
Final Deed of Sale was issued to Claudio and, later, Aracelis Torrens title was cancelled and a
new one issued under Claudios name, still, the petitioner remained silent. In fact, it was only after
the respondents filed a complaint for unlawful detainer, or approximately four (4) years from the
time of the auction sale, that the petitioners claimed that the subject property is a family home,
thus, exempt from execution.
For all intents and purposes, the petitioners negligence or omission to assert their right within a
reasonable time gives rise to the presumption that they have abandoned, waived or declined to
assert it. Since the exemption under Article 153 of the Family Code is a personal right, it is
incumbent upon the petitioners to invoke and prove the same within the prescribed period and it is
not the sheriffs duty to presume or raise the status of the subject property as a family home.
The petitioners negligence or omission renders their present assertion doubtful; it appears that it
is a mere afterthought and artifice that cannot be countenanced without doing the respondents
injustice and depriving the fruits of the judgment award in their favor. Simple justice and fairness
and equitable considerations demand that Claudios title to the property be respected. Equity
dictates that the petitioners are made to suffer the consequences of their unexplained negligence.
WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The
assailed Decision dated June 6, 2008 of the Court of Appeals in CA-G.R. CV No. 79391, which
affirmed the Decision of the Regional Trial Court of Malolos, Bulacan, Branch 22, in Civil Case No.
1058-M-99 and dismissed the complaint for declaration of nullity of TCT No. 221755 (M) and other
documents, and the October 23, 2008 Resolution denying reconsideration, are AFFIRMED.SO
ORDERED.

G.R. No. 172263

July 9, 2008

SPOUSES AUTHER G. KELLEY, JR. and DORIS A. KELLEY, Complainants,

vs.
PLANTERS PRODUCTS, INC. and JORGE A. RAGUTANA, 1 Respondents.

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:

CORONA, J.:
Article 155. The family home shall be exempt from execution, forced sale or attachment except:
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, Branch 57 (RTC Makati City). This was docketed as Civil Case No. 91-904.
After trial on the merits, the RTC Makati City decided in favor of PPI and issued a writ of
execution. Pursuant thereto, respondent sheriff Jorge A. Ragutana sold on execution real property
covered by TCT No. 15079 located in Naga City. A certificate of sale was issued in favor of PPI as
the highest bidder.
After being belatedly informed of the said sale, petitioners Auther and his wife Doris A. Kelley
(Doris) 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.
Petitioners motion was denied for failure to comply with the three-day notice requirement.
Subsequently, petitioners filed a complaint for declaration of nullity of levy and sale of the alleged
family home with damages against Ragutana and PPI in the Regional Trial Court of Naga City,
Branch 19 (RTC Naga City). This was docketed as Civil Case No. 2000-0188. The case was,
however, dismissed for lack of jurisdiction and lack of cause of action. The dismissal was upheld
by the CA.
Petitioners now come to us in this petition for review on certiorari contending that the CA erred in
upholding the dismissal of Civil Case No. 2000-0188 by the RTC Naga City. They claim that Doris
was a stranger2 to Civil Case No. 91-904 (in the RTC Makati City) who could not be forced to
litigate therein.

(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, materialmen and others
who have rendered service or furnished material for the construction of the building.
xxx

xxx

xxx

Article 160. When a creditor whose claim is not among those mentioned in Article 155 obtains a
judgment in his favor, and he has reasonable grounds to believe that the family home is actually
worth more than the maximum amount fixed in Article 157, he may apply to the court which
rendered the judgment for an order directing the sale of the property under execution. The court
shall so order if it finds that the actual value of the family home exceeds the maximum amount
allowed by law as of the time of its constitution. If the increased actual value exceeds the
maximum amount allowed by law in Article 157 and results from subsequent voluntary
improvements introduced by the person or persons constituting the family home, by the owner or
owners of the property, or by any of the beneficiaries, the same rule and procedure shall apply.
xxx

xxx

xxx

Petitioners anchor their action in Civil Case No. 2000-0188 on their contention that TCT No.
15079 is the Kelley family home. No doubt, a family home is generally exempt from
execution3 provided it was duly constituted as such. There must be proof that the alleged family
home was constituted jointly by the husband and wife or by an unmarried head of a family. 4 It
must be the house where they and their family actually reside and the lot on which it is
situated.5 The family home must be part of the properties of the absolute community or the
conjugal partnership, or of the exclusive properties of either spouse with the latters consent, or on
the property of the unmarried head of the family.6 The actual value of the family home shall not
exceed, at the time of its constitution, the amount ofP300,000 in urban areas and P200,000 in
rural areas.7

We grant the petition only to the extent of allowing petitioners to adduce evidence in the trial court
that TCT No. 15079 is in fact their family home as constituted in accordance with the requirements
of law. This is in consonance with our ruling in Gomez v. Sta. Ines10 where we held:

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.8

In said case, the alleged family home was sold on execution by the sheriff of the Pasig
RTC.1avvphi1 The husband and children of the judgment debtor filed a complaint for annulment of
sale of the levied property in Bayombong, Nueva Vizcaya where the alleged family home was
situated. As they were considered strangers to the action filed in the Pasig RTC, we ruled that the
Nueva Vizcaya RTC had jurisdiction over the complaint and that they could vindicate their alleged
claim to the levied property there.11

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.9 Moreover, the debts for which the

[The husband and children] were not parties to the Pasig RTC case and are third-party claimants
who became such only after trial in the previous case had been terminated and the judgment
therein had become final and executory. Neither were they indispensable nor necessary parties in
the Pasig RTC case, and they could not therefore intervene in said case. As strangers to the
original case, respondents cannot be compelled to present their claim with the Pasig RTC which
issued the writ of execution.xxx

WHEREFORE, Civil Case No. 2000-0188 captioned Spouses Auther G. Kelley, Jr. and Doris A.
Kelley v. Planters Products, Inc. and Jorge A. Ragutana is hereby REINSTATED and this case is
hereby REMANDED to the Regional Trial Court of Naga City, Branch 19 for determination
whether or not the property covered by TCT No. 15079 is a duly constituted family home and
therefore exempt from execution.
SO ORDERED.

G.R. No. 165950

August 11, 2010

EQUITABLE PCI BANK, INC., Petitioner,

vs.
OJ-MARK TRADING, INC. and SPOUSES OSCAR AND EVANGELINE
MARTINEZ, Respondents.
Before us is a petition for review on certiorari filed by petitioner under Rule 45 of the 1997 Rules of
Civil Procedure, as amended, praying for the reversal of the Decision1 dated October 29, 2004 of
the Court of Appeals (CA) in CA-G.R. SP No. 77703, which denied its petition for certiorari
assailing the trial courts orders granting respondents application for a writ of preliminary
injunction.
The factual antecedents:
Respondent-spouses Oscar and Evangeline Martinez obtained loans from petitioner Equitable
PCI Bank, Inc. in the aggregate amount of Four Million Forty-Eight Thousand Eight Hundred
Pesos (P4,048,800.00). As security for the said amount, a Real Estate Mortgage (REM) was
executed over a condominium unit in San Miguel Court, Valle Verde 5, Pasig City, Metro Manila
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. The REM was annotated on Condominium Certificate of Title No. PT-21363 of the
Registry of Deeds of Pasig City.2
Respondent-spouses defaulted in the payment of their outstanding loan obligation, which as of
October 31, 2002 stood at P4,918,160.03.3 In a letter dated May 15, 2002, they offered to settle
their indebtedness "with the assignment to the Bank of a commercial lot of corresponding value"
and also requested for recomputation at a lower interest rate and condonation of penalties. 4 While
petitioners officers held a meeting with respondent Oscar 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.5 Consequently, petitioner
initiated the extrajudicial foreclosure of the real estate mortgage by filing an ex parte petition
before the Office of the Executive Judge, Regional Trial Court (RTC) of Pasig City. 6

On January 23, 2003, respondents filed Civil Case No. 69294 for "Temporary Restraining Order
(TRO), Injunction and Annulment of Extrajudicial Foreclosure Sale" in the RTC of Pasig City. On
January 27, 2003, the trial court granted a TRO effective for twenty (20) days.
In their Complaint With Application for Temporary Restraining Order,7 respondents sought to
enjoin the impending foreclosure sale alleging that the same was hasty, premature, unreasonable
and unwarranted, and also claiming defects in the execution of the REM. Respondents imputed
bad faith on the part of petitioner who did not officially inform them of the denial or disapproval of
their proposal to settle the loan obligation by "dacion via assignment of a commercial property."
Respondents maintained that aside from the REM being illegally notarized, incomplete and
unenforceable, the obligation subject thereof had been extinguished by the dacion proposal
considering that the value of the property offered was more than sufficient to pay for the mortgage
debt. It was further averred that the subject property is being used and occupied by respondentspouses as a family home.
In his Order dated February 17, 2003, Judge Mariano M. Singzon, Jr. granted the application for a
writ of preliminary injunction.8 Petitioner filed a motion for reconsideration which was denied under
the Order dated April 21, 2003.9
Petitioner questioned the issuance of preliminary injunction before the CA arguing that the
respondents are not entitled to injunctive relief after having admitted that they were unable to
settle their loan obligations. By Decision dated October 29, 2004, the appellate court sustained the
assailed orders, holding that:
...respondent spouses have sufficiently shown that they have a right over the condominium unit
which is subject of the mortgage. This proprietary right over the condominium is what they are
trying to protect when they applied for preliminary injunction. As respondent spouses have alleged
in their complaint, the issuance of notice of foreclosure sale is at most premature as there are still
several factual issues that need to be resolved before a foreclosure can be effected. Such already
constitute the ostensible right which respondent spouses possess in order for the foreclosure sale
to be temporarily enjoined.10
Hence, this petition raising the following grounds:
I
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN
HOLDING THAT THE TRIAL COURT DID NOT COMMIT GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION IN ISSUING THE ASSAILED WRIT OF
PRELIMINARY INJUNCTION
II
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN
HOLDING THAT INDIVIDUAL RESPONDENTS SPS. MARTINEZ HAVE PROPRIETARY RIGHT
OVER THE MORTGAGED CONDOMINIUM UNIT
III
THE HONORABLE COURT OF APPEALS COMMITTED A GRAVE REVERSIBLE ERROR IN
HOLDING THAT SUCH PURPORTED PROPRIETARY RIGHT OF RESPONDENTS SPS.
MARTINEZ DESERVES THE PROTECTIVE MANTLE OF A WRIT OF PRELIMINARY

INJUNCTION DESPITE THEIR CLEAR AND UNEQUIVOCAL ADMISSION OF THE

OUTSTANDING LOANS AND THEIR DELINQUENCY

home, in which they were residing since 1997, at least insofar as the unencumbered area in
excess of 180.750 sq. m., is exempt from forced sale or execution under Article 155 of the Family
Code. Petitioner, on the other hand, will not suffer any loss if the foreclosure will not proceed. 16

IV
THE HONORABLE COURT OF APPEALS ERRED IN HOLDING THAT THERE ARE STILL
SEVERAL FACTUAL ISSUES TO BE RESOLVED IN A FULL-BLOWN TRIAL BEFORE
PETITIONER EPCIB COULD EXERCISE ITS STATUTORY AND EQUITABLE RIGHT TO
FORECLOSE11
The sole issue to be resolved is whether or not the respondents have shown a clear legal right to
enjoin the foreclosure and public auction of the third-party mortgagors property while the case for
annulment of REM on said property is being tried.
Petitioner argued that the appellate courts conclusion that respondents possess proprietary right
over the mortgaged property subject of foreclosure is utterly baseless, for the following reasons:
first, while the condominium unit is supposedly a family home, it is admittedly owned by
respondent corporation and not by the conjugal partnership or absolute community of respondentspouses; and second, even assuming that OJ-Mark Trading, Inc. is a family corporation,
respondents stance contravenes the established rule that properties registered in the name of the
corporation are owned by it as an entity separate and distinct from its members or stockholders. 12
As to the alleged proposal of respondent Oscar Martinez to assign commercial lots by dacion en
pago to settle their loan obligations, petitioner pointed out that the properties offered for dacion are
not owned, and much less to be owned by him, but purportedly owned by another corporation
(developer), the president of which supposedly owes him a sum of money. Respondent Oscar
Martinez likewise admitted during the hearings before the trial court his unpaid loan with petitioner.
Moreover, with the filing of a petition for extrajudicial foreclosure of the real estate mortgage by
petitioner, it serves more than a formal rejection of respondents dacion en pago offer. 13
On their part, the respondents contended that the petition raises factual issues not proper in an
appeal by certiorari under Rule 45. They asserted that the trial court correctly found sufficient legal
basis to grant the writ of preliminary injunction after conducting a summary hearing in which both
parties actively participated and submitted oral and documentary evidence. Such evidence
adduced by respondents, as well as the Affidavit dated January 24, 2003 of Atty. Oscar Martinez
(adopted in the February 7, 2003 hearing) fully supported their application and hence the trial
court did not act precipitately or arbitrarily in granting injunctive relief.14
Respondents argued that they appear to be entitled to the relief demanded by their Complaint
"because petitioner was in bad faith when it proceeded to foreclose while there was still a pending
written proposal to pay." They stand to lose a prime property, and thus made a serious and
sincere offer by way of dacion en pago. To show good faith and as required by petitioner to
continue the negotiations for dacion, respondent Atty. Oscar Martinez even paidP100,000.00 in
October 2002, which petitioner accepted. But petitioner maliciously, fraudulently and hastily
proceeded to foreclose the renovated mortgaged property, apparently motivated by its discovery
after re-appraisal that the floor area of the townhouse and number of its rooms had doubled (from
180.750 sq. m. with three [3] bedrooms, it is now 350 sq. m. with six [6] bedrooms). Respondents
contended that as creditor, it was petitioners duty not to sit on respondents dacion offer and
should have informed them in writing that said offer is rejected. By hanging on the dacion talks,
petitioner thus prevented the respondents repayment of the loan, in malicious haste to acquire the
condominium unit as asset.15
Respondents further claimed that the extrajudicial foreclosure will cause grave injustice and
irreparable injury to respondent-spouses and their four (4) young children because their family

With respect to the commercial lots offered in dacion, respondents fault the petitioner in
deliberately ignoring the fact that the Blue Mountains Subdivision located at Antipolo City was
already approved by the Land Registration Authority; although the subdivided lots have already
been applied, the individual titles had not yet been issued. It was therefore impossible for
respondents to deliver these titles to petitioner by October 21, 2002 considering the normal time it
takes to secure land titles. Respondents deplored the sudden filing of the petition for extrajudicial
foreclosure, which was unfair as the negotiations had already reached the stage when petitioner
scheduled an ocular inspection for the appraisal of the lots. However, for unknown reasons,
petitioner did not push through with the inspection.17
We grant the petition.
Section 3, Rule 58 of the Rules of Court provides that:
SEC. 3. Grounds for issuance of preliminary injunction.A preliminary injunction may be granted
when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such
relief consists in restraining the commission or continuance of the act or acts
complained of, or in requiring the performance of an act or acts, either for a limited
period or perpetually;
(b) That the commission, continuance or non-performance of the act or acts complained
of during the litigation would probably work injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or is attempting to do,
or is procuring or suffering to be done, some act or acts probably in violation of the
rights of the applicant respecting the subject of the action or proceeding, and tending to
render the judgment ineffectual.
As such, a writ of preliminary injunction may be issued only upon clear showing of an actual
existing right to be protected during the pendency of the principal action. The twin requirements of
a valid injunction are the existence of a right and its actual or threatened violations. Thus, to be
entitled to an injunctive writ, the right to be protected and the violation against that right must be
shown.18 A writ of preliminary injunction may be issued only upon clear showing of an actual
existing right to be protected during the pendency of the principal action.19
The issuance of a preliminary injunction rests entirely within the discretion of the court taking
cognizance of the case and is generally not interfered with except in cases of manifest
abuse.20 For the issuance of the writ of preliminary injunction to be proper, it must be shown that
the invasion of the right sought to be protected is material and substantial, that the right of
complainant is clear and unmistakable and that there is an urgent and paramount necessity for the
writ to prevent serious damage. In the absence of a clear legal right, the issuance of a writ of
injunction constitutes grave abuse of discretion.21
The possibility of irreparable damage without proof of actual existing right is no ground for an
injunction.22 Hence, it is not sufficient for the respondents to simply harp on the serious damage
they stand to suffer if the foreclosure sale is not stayed. They must establish such clear and
unmistakable right to the injunction. In Duvaz Corporation v. Export and Industry Bank, 23 we

emphasized that it is necessary for the petitioner to establish in the main case its rights on an
alleged dacion en pago agreement before those rights can be deemed actual and existing, which
would justify the injunctive writ. Thus:
In Almeida v. Court of Appeals, the Court stressed how important it is for the applicant for an
injunctive writ to establish his right thereto by competent evidence:
Thus, the petitioner, as plaintiff, was burdened to adduce testimonial and/or documentary
evidence to establish her right to the injunctive writs. It must be stressed that injunction is not
designed to protect contingent or future rights, and, as such, the possibility of irreparable damage
without proof of actual existing right is no ground for an injunction. A clear and positive right
especially calling for judicial protection must be established. Injunction is not a remedy to protect
or enforce contingent, abstract, or future rights; it will not issue to protect a right not in esse and
which may never arise, or to restrain an action which did not give rise to a cause of action. There
must be an existence of an actual right. Hence, where the plaintiffs right or title is doubtful or
disputed, injunction is not proper.
An injunctive remedy may only be resorted to when there is a pressing necessity to avoid injurious
consequences which cannot be remedied under any standard compensation. The possibility of
irreparable damage without proof of an actual existing right would not justify injunctive relief in his
favor.
xxx

xxx

xxx

x x x. In the absence of a clear legal right, the issuance of the injunctive writ constitutes grave
abuse of discretion. As the Court had the occasion to state in Olalia v. Hizon, 196 SCRA 665
(1991):
It has been consistently held that there is no power the exercise of which is more delicate, which
requires greater caution, deliberation and sound discretion, or more dangerous in a doubtful case,
than the issuance of an injunction. It is the strong arm of equity that should never be extended
unless to cases of great injury, where courts of law cannot afford an adequate or commensurate
remedy in damages.
Every court should remember that an injunction is a limitation upon the freedom of action of the
defendant and should not be granted lightly or precipitately. It should be granted only when the
court is fully satisfied that the law permits it and the emergency demands it.1avvphi1
We are in full accord with the CA when it struck down, for having been issued with grave abuse of
discretion, the RTCs Order of September 25, 2002, granting petitioners prayer for a writ of
preliminary injunction during the pendency of the main case, Civil Case No. 02-1029. The reason
therefor is that the right sought to be protected by the petitioner in this case through the writ of
preliminary injunction is merely contingent and not in esse. 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. 24[emphasis supplied.]
In the case at bar, 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.25Foreclosure is but a necessary

consequence of non-payment of a mortgage indebtedness.26 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.27
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 in their credit
agreements, mortgage contracts and promissory notes 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.28 In these cases, unsubstantiated allegations of denial of due process and prematurity
of a loan are not sufficient to defeat the mortgagees unmistakable right to an extrajudicial
foreclosure.29
We cannot agree with respondents position that petitioners act of initiating extrajudicial
foreclosure proceeding while they negotiated for a dacion en pago was illegal and done in bad
faith. 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. 30 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.
As we held in Tecnogas Philippines Manufacturing Corporation v. Philippine National Bank31 -Dacion en pago is a special mode of payment whereby the debtor offers another thing to the
creditor who accepts it as equivalent of payment of an outstanding obligation. The undertaking is
really one of sale, that is, the creditor is really buying the thing or property of the debtor, payment
for which is to be charged against the debtors debt. As such, the essential elements of a contract
of sale, namely, consent, object certain, and cause or consideration must be present. It is only
when the thing offered as an equivalent is accepted by the creditor that novation takes place,
thereby, totally extinguishing the debt.
On the first issue, the Court of Appeals did not err in ruling that Tecnogas has no clear legal right
to an injunctive relief because its proposal to pay by way of dacion en pago did not extinguish its
obligation. Undeniably, Tecnogas proposal to pay by way of dacion en pago was not accepted by
PNB. Thus, the unaccepted proposal neither novates the parties mortgage contract nor suspends
its execution as there was no meeting of the minds between the parties on whether the loan will
be extinguished by way of dacion en pago. Necessarily, upon Tecnogas default in its obligations,
the foreclosure of the REM becomes a matter of right on the part of PNB, for such is the purpose
of requiring security for the loans. [emphasis supplied.]
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.32
We note that the claim of exemption under Art. 153 of the Family Code, thereby raising issue on
the mortgaged condominium unit being a family home and not corporate property, is entirely
inconsistent with the clear contractual agreement of the REM. 33 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.
Clearly, the appellate court seriously erred in sustaining the trial courts orders granting
respondents application for preliminary injunction.
Anent the grave and irreparable injury which respondents alleged they will suffer if no preliminary
injunction is issued, this Court has previously declared that all is not lost for defaulting mortgagors
whose properties were foreclosed by creditors-mortgagees, viz:
In any case, petitioners will not be deprived outrightly of their property. Pursuant to Section 47 of
the General Banking Law of 2000, mortgagors who have judicially or extrajudicially sold their real
property for the full or partial payment of their obligation have the right to redeem the property
within one year after the sale. They can redeem their real estate by paying the amount due, with
interest rate specified, under the mortgage deed; as well as all the costs and expenses incurred
by the bank.
Moreover, in extrajudicial foreclosures, petitioners have the right to receive any surplus in the
selling price. This right was recognized in Sulit v. CA, in which the Court held that "if the
mortgagee is retaining more of the proceeds of the sale than he is entitled to, this fact alone will
not affect the validity of the sale but simply gives the mortgagor a cause of action to recover such
surplus.34
WHEREFORE, the petition is GRANTED. The Decision dated October 29, 2004 of the Court of
Appeals in CA-G.R. SP No. 77703 is hereby REVERSED and SET ASIDE. Respondents
application for a writ of preliminary injunction is DENIED.
No costs.
SO ORDERED.