G.R. No. 165060

THIRD DIVISION

ALBINO JOSEF, G.R. No. 165060

Petitioner,

Present:

Ynares-Santiago, J. (Chairperson),

- versus - Austria-Martinez,

Tinga,*

Chico-Nazario, and

Nachura, JJ.

OTELIO SANTOS,

Respondent. Promulgated:

November 27, 2008

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court assails the November 17, 2003[1] Resolution of the Court of Appeals in CA-G.R. SP No. 80315, dismissing petitioner’s special civil action of certiorari for failure to file a prior motion for reconsideration, and the May 7, 2004[2] Resolution 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 appealed[4] to the Court of Appeals, which affirmed the trial court’s decision in toto.[5] Petitioner 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, 2003[11] 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 Sale[12] 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 sheriff’s 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 court’s 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 petitioner’s motion for reconsideration.

Thus, the instant petition which raises the following issues:

WHETHER OR NOT THE LEVY AND SALE OF THE PERSONAL BELONGINGS OF THE PETITIONER’S 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 PETITIONER’S 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 court’s 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 petitioner’s 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 court’s 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 respondent’s 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 petitioner’s allegations in his opposition, the trial court ignored the same and granted respondent’s 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.

SO ORDERED.[13]

The above Order did not resolve nor take into account petitioner’s 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 petitioner’s 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 petitioner’s family home, the trial court should have observed the following procedure:

1. Determine if petitioner’s obligation to respondent falls under either of the exceptions under Article 155[16] of the Family Code;

2. Make an inquiry into the veracity of petitioner’s claim that the property was his family home;[17] conduct 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 cross-examine and present evidence to the contrary;

3. If the property is accordingly found to constitute petitioner’s 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 petitioner’s 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 157[21] and 160[22] 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 one’s 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 court’s failure to observe the proper procedures to determine the veracity of petitioner’s allegations, is unjustified.

The same is true with respect to personal properties levied upon and sold at auction. Despite petitioner’s 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 court’s inaction on petitioner’s plea resulted in serious injustice to the latter, not to mention that its failure to conduct an inquiry based on the latter’s 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 petitioner’s 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 petitioner’s argument that the properties subject of the writ are exempt from execution.

Indeed, petitioner’s 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 petitioner’s 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 hereby DECLARED 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 Josef’s 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 court’s 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.

CONSUELO YNARES-SANTIAGO

Associate Justice

WE CONCUR:

MA. ALICIA AUSTRIA-MARTINEZ

Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO

Associate Justice Associate Justice

ANTONIO EDUARDO B. NACHURA

Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

CONSUELO YNARES-SANTIAGO

Associate Justice

Chairperson, Third Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Chief Justice

* In lieu of Associate Justice Teresita J. Leonardo-De Castro, per Special Order No. 539 dated November 14, 2008.

[1] Rollo, p. 64; penned by Associate Justice Edgardo P. Cruz and concurred in by Associate Justices Ruben T. Reyes and Noel G. Tijam.

[2] Id. at 72-73.

[3] Id. at 29-33; penned by Judge Reuben R. De la Cruz.

[4] Docketed as CA-G.R. CV No. 56952.

[5] Rollo, pp. 34-38; penned by Associate Justice Rodrigo V. Cosico and concurred in by Associate Justices Ramon A. Barcelona and Alicia L. Santos.

[6] Id. at 13, 51; docketed as G.R. No. 150720.

[7] Id. at 50-52.

[8] Id. at 53-55.

[9] Id. at 56.

[10] Id.

[11] Id. at 57-58.

[12] Id. at 61-62.

[13] Id. at 56.

[14] Abbain v. Chua, No. L-24241, February 26, 1968, 22 SCRA 748.

[15] Taneo, Jr. v. Court of Appeals, G.R. No. 108532, March 9, 1999, 304 SCRA 308.

[16] Family Code.

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

[17] Family Code.

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.

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.

Art. 162. The provisions in this Chapter shall also govern existing family residences insofar as said provisions are applicable.

[18] Modequillo v. Breva, G.R. No. 86355, May 31, 1990, 185 SCRA 766; Manacop v. Court of Appeals, 342 Phil. 735 (1997); Taneo v. Court of Appeals, supra note 15.

[19] 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 a 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 legal support.

Art. 159. The family home shall continue despite the death of one or both spouses or of the unmarried head of the family for a period of ten years or for as long as there is a minor beneficiary, and the heirs cannot partition the same unless the court finds compelling reasons therefor. This rule shall apply regardless of whoever owns the property or constituted the family home.

[20] Family Code.

Art. 161. For purposes of availing of the benefits of a family home as provided for in this Chapter, a person may constitute, or be the beneficiary of, only one family home.

[21] Family Code.

Art. 157. The actual value of the family home shall not exceed, at the time of its constitution, the amount of Three hundred thousand pesos in urban areas, and Two hundred thousand pesos in rural areas, or such amounts as may hereafter be fixed by law.

In any event, if the value of the currency changes after the adoption of this Code, the value most favorable for the constitution of a family home shall be the basis of evaluation.

For purposes of this Article, urban areas are deemed to include chartered cities and municipalities whose annual income at least equals that legally required for chartered cities. All others are deemed to be rural areas.

[22] Family Code.

Art. 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 allowed 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.

At the execution sale, no bid below the value allowed for a family home shall be considered. The proceeds shall be applied first to the amount mentioned in Article 157, and then to the liabilities under the judgment and the costs. The excess, if any, shall be delivered to the judgment debtor.

[23] A. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. I (1990 ed.), p. 508, citing Code Commission of 1947, pp. 18-19, 20.

[24] Family Code, Art. 149.

[25] Sec. 13, Rule 39 of the Rules of Court provide:

Sec. 13. Property exempt from execution. Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:

(a) The judgment obligor's family home as provided by law, or the homestead in which he resides, and land necessarily used in connection therewith;

(b) Ordinary tools and implements personally used by him in his trade, employment, or livelihood;

(c) Three horses, or three cows, or three carabaos, or other beasts of burden such as the judgment obligor may select necessarily used by him in his ordinary occupation;

(d) His necessary clothing and articles for ordinary personal use, excluding jewelry;

(e) Household furniture and utensils necessary for housekeeping, and used for that purpose by the judgment obligor and his family, such as the judgment obligor may select, of a value not exceeding one hundred thousand pesos;

(f) Provisions for individual or family use sufficient for four months;

(g) The professional libraries and equipment of judges, lawyers, physicians, pharmacists, dentists, engineers, surveyors, clergymen, teachers, and other professionals, not exceeding three hundred thousand pesos in value;

(h) One fishing boat and accessories not exceeding the total value of one hundred thousand pesos owned by a fisherman and by the lawful use of which he earns his livelihood;

(i) So much of the salaries, wages, or earnings of the judgment obligor of his personal services within the four months preceding the levy as are necessary for the support of his family;

(j) Lettered gravestones;

(k) Monies benefits, privileges, or annuities accruing or in any manner growing out of any life insurance;

(l) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the Government;

(m) Properties specially exempt by law.

But no article or species of property mentioned in this section shall be exempt from execution issued upon a judgment recovered for its price or upon a judgment of foreclosure of a mortgage thereon.

[26] Honrado v. Court of Appeals, G.R. No. 166333, November 25, 2005, 476 SCRA 280; Gomez v. Gealone, G.R. No. 58281, November 13, 1991, 203 SCRA 474 .