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IDOLOR v. COURT OF
APPEALS
February 7, 2001
Gonzaga-Reyes, J
Luciano, Noel Christian

SUMMARY: Teresita Idolor obtained a loan secured by a

Real Estate Mortgage from Gumersindo De Guzman. When
Idolor failed to pay, De Guzman filed a complaint before
the Office of the Brgy. Capt. of Brgy. Ramon Magsaysay, QC
which resulted in a Kasunduang Pag-aayos. In the
Kasunduan, Idolor acknowledged the outstanding loan
obligation and was given a 90-day grace period to settle
the account. However, Idolor failed on this undertaking
which prompted Gumersindo to file a motion for execution
before the Office of the Brgy. Capt. which issued a
certification to file action. Gumersindo then filed an
extrajudicial foreclosure of the real estate mortgage. The
property was sold in a public auction to Gumersindo. Idolor
then filed with the RTC a complaint for annulment of
Sheriffs Certificate of Sale with prayer for TRO and writ of
preliminary injunction. RTC issued the writ of injunction. On
appeal, CA reversed the RTC and annulled the preliminary
injunction. SC affirmed the CA.
DOCTRINE: There is no doctrinal pronouncement on
Katarungang Pambarangay but this is an illustrative case
on an amicable settlement by the Office of Barangay Capt.
which can be a subject of a motion for execution.
(On Injunction) It is always a ground for denying
injunction that the party seeking it has insufficient title or
interest to sustain it, and no claim to the ultimate relief
sought.
(On Novation) Where the parties to the new
obligation expressly recognize the continuing existence
and validity of the old one, where, in other words, the
parties expressly negated the lapsing of the old obligation,
there can be no novation.

FACTS: Teresita Idolor obtained a loan of P520,000 payable

after 6 months. As security, she executed a Deed of Real
Estate Mortgage with right of extrajudicial foreclosure upon
failure to redeem on or before Sept. 20, 1994 in favor of
Gumersindo De Guzman.
On Sept. 21, 1996, De Guzman filed a complaint
against Idolor before the Office of the Barangay Capt. Of
Brgy. Ramon Magsaysay, QC. The confrontation resulted in a
KASUNDUANG PAG-AAYOS.
The Kasunduan provides, in part:
1. Idolor borrowed P520,000 secured by a mortgage on
a parcel of land
2. Idolor is asking for a 90 day grace period to settle the
amount
3. Upon failure to settle on or before Dec. 21, 1996,
Idolor agrees to execute a deed of sale with
agreement to repurchase without interest within ONE
YEAR
a. Total amount of P1,233,288.23 inclusive of
interest
Idolor failed to comply with the Kasunduan.
Gumersindo then filed a motion for execution before the
Office of the Barangay. Said office issued a certification to
file action.
Gumersindo then filed an extrajudicial foreclosure of
the real estate mortgage. The property was sold in a public
auction to Gumersindo.
Idolor then filed with the RTC a complaint for
annulment of Sheriffs Certificate of Sale with prayer for TRO
and writ of preliminary injunction.
RTC issued the writ of injunction.
On appeal, CA reversed the RTC and annulled the
preliminary injunction.
Hence, this petition.
ARGUMENTS OF IDOLOR:

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1. Her proprietary right over the subject property was

not yet lost since her right to redeem the subject
land for a period of 1 year had neither lapsed nor run
as the sheriffs certificate of sale was null and void
a. There was no valid notice of the auction sale
b. The newspaper used was not one of general
circulation
2. The execution of the Kasunduan on Sept. 21, 1996
shows an express intention of the parties to novate
of modify the real estate mortgage
a. There is novation since the mortgage agreement
and the Kasunduan are irreconcilable:
(1) Under the former the amount due was
P520,000 while payable within 6 months
(2) Under the Kasunduan, the amount due was
P1,233,288.23 inclusive of interest, payable
within 90 days
b. The Kasunduan was a valid and new contract
ISSUES: WON the CA erred in finding that the RTC
committed grave abuse of discretion in enjoining the
issuance of a final deed of sale and consolidation of
ownership of the land in favor of the De Guzmans.
HELD: NO, CA was correct
I.

SC agrees with the CA that Idolor has NO MORE

proprietary right to speak of over the foreclosed
property to entitle her to the issuance of a writ of
injunction
A. Property was sold in public auction on May 23,
1997
1. Sheriffs certificate of sale was registered with
the Registry of Deeds on June 23, 1997
2. So Idolor had one year from registration to
redeem but she failed to do so
3. Thus, De Guzman is entitled to conveyance
and possession of the foreclosed property
B. When Idolor filed her complaint for annulment of
sheriffs sale, she failed t show sufficient interest

or title in the property sought to be protected as

her right of redemption has already expired 2
days before filing the complaint
C. It is always a ground for denying injunction that
the party seeking it has insufficient title or
interest to sustain it, and no claim to the ultimate
relief sought
II.

Idolors allegation regarding invalidity of the sheriffs

sale dwells on the merits of the case. This should be
resolved during trial

III. As to the argument on novation

A. Concepts
1. Novation is the extinguishment of an
obligation by the substitution or change of the
obligation by a subsequent one which
terminates it
2. It is never presumed
B. A review of the Kasunduan does NOT support
Idolors contention that it novated the real estate
mortgage since the will to novate did not appear
by EXPRESS agreement nor the old and new
contracts were incompatible in all points
1. In fact, Idolor expressly recognized in the
Kasunduan the existence and validity of the
old obligation where she acknowledged her
long overdue account since Sept. 20, 1994
which was secured by a real estate mortgage
and asked for a 90-day grace period
C. Where the parties to the new obligation expressly
recognize the continuing existence and validity of
the old one, where, in other words, the parties
expressly negated the lapsing of the old
obligation, there can be no novation
D. Notably, the provision of the Kasunduan
regarding the execution of a deed of sale with
right to repurchase within 1 year would have the
same effect as the extrajudicial foreclosure of the

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mortgage where Idolor was given 1 year from

registration of sheriffs sale to redeem
DISPOSITIVE: Petition Denied. CA affirmed.