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480 SUPREME COURT REPORTS ANNOTATED

Padilla, Jr. vs. Philippine Producers’ Cooperative
Marketing Association, Inc.

*
G.R. No. 141256. July 15, 2005.

ESTANISLAO PADILLA, JR., petitioner, vs. PHILIPPINE

PRODUCERS’ COOPERATIVE MARKETING
ASSOCIATION, INC., respondent.

Remedial Law; Execution; Land Titles; The fact of levy and

sale constitutes execution and not the action for the issuance of a
new title.—As should be evident from Blancaflor, petitioner
Padilla’s reliance on Section 6 of Rule 39 of the 1997 Revised
Rules of Civil Procedure is misplaced. The fact of levy and sale
constitutes execution, and not the action for the issuance of a new
title. Here, because the levy and sale of the properties took place
in June and July of 1990, respectively, or less than a year after
the decision became final and executory, the respondent clearly
exercised its rights in timely fashion.
Same; Same; Same; The proper course of action is to file a
petition in court, rather than merely move, for the issuance of new
titles.—Respondent alleges that it resorted to filing the contested
motion because it could not obtain new certificates of title,
considering that petitioner refused to surrender his owner’s
duplicate TCTs. This contention is incorrect. The proper course of
action was to file a petition in court, rather than merely move, for
the issuance of new titles. This was the procedure followed in
Blancaflor by Sarmiento Trading which was in more or less the
same situation as the respondent in this case.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Reyes V. Alejano for petitioner.
     Adoniram Pamplona for respondent.

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* THIRD DIVISION.

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481

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Padilla, Jr. vs. Philippine Producers’ Cooperative
Marketing Association, Inc.

CORONA, J.:

In implementing the involuntary transfer of title of real

property levied and sold on execution, is it enough for the
executing party to file a motion with the court which
rendered judgment, or does he need to file a separate action
with the Regional Trial Court? 1
This is a petition for review on certiorari from a 2decision
of the Court of Appeals in CA-G.R.3 CV No. 53085, and its
resolution denying reconsideration, both of which affirmed
the orders 4 of the Regional Trial Court of Bacolod City,
Branch 51. 5
The undisputed facts of the case follow.
Petitioner and his wife are the registered owners of the
following real properties: Lot Nos. 2904-A (covered by TCT
No. T-36090), 2312-C-5 (covered by TCT No. T-3849), and
2654 (covered by TCT No. T-8053), all situated in Bago
City.
Respondent is a marketing cooperative which had a
money claim against petitioner.
On April 24, 1987, respondent filed a civil case against
petitioner for collection of a6 sum of money in the Regional
Trial Court of Bacolod City. Despite receipt of summons on
May

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1 Under Rule 45 of the Rules of Court.

2 CA Decision dated March 15, 1999 in CA-G.R. CV No. 53085, penned
by Associate Justice Artemon D. Luna and concurred in by Associate
Justices Delilah Vidallon-Magtolis and Rodrigo V. Cosico of the Second
Division, Rollo, pp. 26-34.
3 CA Resolution dated November 19, 1999 (affirming the March 15,
1999 CA Decision) in CA-G.R. CV No. 53085, penned by Associate Justice
Artemon D. Luna and concurred in by Associate Justices Delilah Vidallon-
Magtolis and Rodrigo V. Cosico of the Second Division, Rollo, pp. 37.
4 Orders dated July 3, 1995 and August 8, 1995 penned by Judge
Ramon B. Posadas of the Regional Trial Court of Bacolod City, Branch 51,
Rollo pp. 67-70.
5 Rollo, pp. 27-28, 68-69.
6 Docketed as Civil Case No. 4427, Rollo, pp. 67-70

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482

482 SUPREME COURT REPORTS ANNOTATED

Padilla, Jr. vs. Philippine Producers’ Cooperative
Marketing Association, Inc.

18, 1987,7
petitioner (then defendant) opted not to file an
answer. On March 3, 1988, respondent (then plaintiff)
moved to have petitioner-defendant declared in default,8
which the trial court granted on April 15, 1988. 9
Respondent presented its evidence on October 9, 1989. On
November 28, 1989, 10
the trial court rendered a decision in
respondent’s favor. Petitioner was furnished a copy of this
decision by mail on November 29, 1989 but, 11
because of his
failure to claim it, the copy was returned.
On May 31, 1990, the Court issued a writ of execution.
On June 4, 1990, the three lots (Lot 2904-A, Lot 2312-C-5
and Lot 2654), all of the Bago Cadastre and registered in
petitioner’s name, were levied by virtue of that writ. On
July 4, 1990, sheriff Renato T. Arimas auctioned off the lots
to satisfy the judgment, with respondent as the only bidder.
On July 10, 1990, ex-officio provincial sheriff and clerk of
court Antonio Arbis executed a certificate of sale in favor of
respondent. On August 13, 1990, 12the certificate of sale was
recorded in the Register of Deeds.
When petitioner failed to exercise his right of
redemption within the 12-month period allowed by law, the
court, on motion of respondent, ordered on February 5,
1992 the issuance of a writ of possession for the sheriff to
cause the delivery of the physical 13
possession of the
properties in favor of respondent.
On May 17, 1995, respondent filed a motion to direct the
Register of Deeds to issue new titles over the properties in
its name, alleging that the Register of Deeds (RD) of Bago
City would not issue new titles (in respondent’s name)
unless the

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7 Id., p. 68.
8 Id., p. 68.
9 Id., p. 107.
10 Id., p. 68.
11 Id., p. 107.
12 Id., p. 68.
13 Id., p. 68.

483
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Padilla, Jr. vs. Philippine Producers’ Cooperative
Marketing Association, Inc.

owner’s copies were first surrendered to him. Respondent

countered that such surrender was impossible because this
was an involuntary
14
sale and the owner’s copies were with
petitioner.
On July 3, 1995, the trial court issued an order granting
the motion. In a subsequent order dated August 8, 1995, it
denied petitioner’s motion for reconsideration. Petitioner
appealed. Four years later, the Court of Appeals rendered
the assailed decision affirming the order of the trial court.
Petitioner contends that respondent’s motion for the RD
to cancel the existing certificates of title and issue new ones
in its name was in fact a real action and that the motion
was procedurally
15
infirm because respondent did not furnish
him a copy. He also claims that under Section 6 of Rule 39
of the 1997 Rules of Civil Procedure, the execution of the
judgment was barred by prescription, given that the motion
was filed more than 5 years 16
after the writ of execution was
issued on March 23, 1990. He also argues that respondent
failed to follow the correct procedure for the cancellation of
a certificate of title and the issuance17of a new one, which is
contained in Section18107 of PD 1529.
In its comment, respondent claims that the motion
dated May 15, 1995 to direct the RD to issue new
certificates of title was but a continuation of the series of
events that began with the decision in its favor on
November 28, 1989, and from there, the auction of the
properties and the issuance of a certificate of sale in 1990.
The two principal issues for consideration are:

(1) whether or not respondent’s right to have new titles

issued in its name is now barred by prescription
and

_______________

14 Id., pp. 39-40.

15 Id., p. 11.
16 Id., pp. 15-17. The motion was filed on May 17, 1995.
17 Id., pp. 18-19.
18 Id., pp. 90-95.

484

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484 SUPREME COURT REPORTS ANNOTATED

Padilla, Jr. vs. Philippine Producers’ Cooperative
Marketing Association, Inc.

(2) whether or not the motion in question is the proper

remedy for cancelling petitioner’s certificates of title
and new ones issued in its name.

On the first issue, we rule that the respondent’s right to

petition the court for the issuance of new certificates of title
has not yet prescribed. 19
In Heirs of Blancaflor vs. Court of Appeals, Sarmiento
Trading Corporation, predecessor-in-interest of the private
respondent Greater Manila Equipment Marketing
Corporation, secured a writ of execution in 1968 by virtue
of which it levied real property belonging to petitioners’
predecessor-in-interest, Blancaflor. When the property was
auctioned, Sarmiento Trading bid successfully and, in
1970, after the lapse of the one-year redemption period,
consolidated its ownership over the lot.
Sarmiento Trading then filed a petition with the Court
of First Instance to order the cancellation of Blancaflor’s
title and the issuance of a new one in its name. In 1972,
Sarmiento Trading sold the lot to private respondent
which, at the time, went by the name Sarmiento
Distributors Corporation.
In 1988, the Deputy Register of Deeds of Iloilo wrote to
Blancaflor requesting him to surrender his owner’s
duplicate copy of the TCT. Blancaflor did not comply and
the RD refused to issue a new title. On May 25, 1989,
private respondent filed a petition in the Regional Trial
Court praying that the petitioners be ordered to surrender
the owner’s duplicate copy of the title. The petitioners
refused, claiming that respondent’s cause of action had
already prescribed. Ruling otherwise, we stated:

It is settled that execution is enforced by the fact of levy

and sale. The result of such execution sale—with Sarmiento
Trading Corporation as the highest bidder—was that title to Lot
No. 22 of TCT No. 14749 vested immediately in the purchaser
subject only to

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19 364 Phil. 454; 304 SCRA 796 (1999).

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VOL. 463, JULY 15, 2005 485

Padilla, Jr. vs. Philippine Producers’ Cooperative Marketing
Association, Inc.

the judgment debtor’s right to repurchase. Therefore, upon

Sarmiento Trading Corporation’s purchase of Lot No. 22
covered by TCT No. 14749 at the auction sale, private
respondent’s successor-in-interest had acquired a right
over said title.
The right acquired by the purchaser at an execution sale is
inchoate and does not become absolute until after the expiration
of the redemption period without the right of redemption having
been exercised. But inchoate though it be, it is like any other
right, entitled to protection and must be respected until
extinguished by redemption. Gaudencio Blancaflor was not
able to redeem his property after the expiration of the
redemption period, which was 12 months after the entry or
annotation of the certificate of sale made on the back of
TCT No. 14749. Consequently, he had been divested of all
his rights to the property. (emphasis ours)
20
In this case, the rule being invoked by petitioner states:

SEC. 6. Execution by motion or by independent action.—A final

and executory judgment or order may be executed on motion
within five (5) years from the date of its entry. After the lapse of
such time, and before it is barred by the statute of limitations, a
judgment may be enforced by action. The revived judgment may
also be enforced by motion within five (5) years from the date of
its entry and thereafter by action before it is barred by the statute
of limitations.

As should be evident from Blancaflor, petitioner Padilla’s

reliance on Section 6 of Rule 39 of the 1997 Revised Rules
of Civil Procedure is misplaced. The fact of levy and sale
constitutes execution, and not the action for the issuance of
a new title. Here, because the levy and sale of the
properties took place in June and July of 1990,
respectively, or less than a year after the decision became
final and executory, the respondent clearly exercised its
rights in timely fashion.

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20 Section 6, Rule 39 of the 1997 Revised Rules of Civil Procedure.

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Padilla, Jr. vs. Philippine Producers’ Cooperative

Marketing Association, Inc.

In addition, petitioner himself admits his failure to redeem

the properties within the one-year period by adopting
21
the
facts stated in the Court of Appeals’ decision. There is
thus no doubt he had been divested of his ownership of the
contested lots.
Respondent’s position hinges on petitioner’s failure to
redeem the properties 12 months after the certificate of
sale was recorded in the Register of Deeds on August 13,
1990. There is no uncertainty about respondent’s having
become the new lawful owner of the lots in question by
virtue of the levy and the execution sale.
On the other hand, the issue of whether to acquire new
titles by mere motion or through a separate petition is an
entirely different matter.
Petitioner is correct in assailing as improper
respondent’s filing of a mere motion for the cancellation of
the old TCTs and the issuance of new ones as a result of
petitioner’s refusal to surrender his owner’s duplicate
TCTs.
Indeed, this called for a separate cadastral action
initiated via petition. 22
Section
23
107 of PD 1529, formerly Section 111 of Act
496, provides:

Sec. 107. Surrender of withheld duplicate certificates.—Where it is

necessary to issue a new certificate of title pursuant to any
involuntary instrument which divests the title of the registered
owner against his consent or where a voluntary instrument
cannot be registered by reason of the refusal or failure of the
holder to surrender the owner’s duplicate certificate of title, the
party in interest may file a petition in court to compel the
surrender of the same to the Register of Deeds. The court, after
hearing, may order the registered owner or any person
withholding the duplicate certificate to

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21 Rollo, p. 12.
22 Amending and Codifying the Laws Relative to Registration of Property and
for Other Purposes.
23 The Land Registration Act.

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Association, Inc.

surrender the same, and direct the entry of a new certificate or

memorandum upon such surrender. If the person withholding the
duplicate certificate is not amenable to the process of the court, or
if for any reason the outstanding owner’s duplicate certificate
cannot be delivered, the court may order the annulment of the
same as well as the issuance of a new certificate of title in lieu
thereof. Such new certificate and all duplicates thereof shall
contain a memorandum of the annulment of the outstanding
duplicate.

Respondent alleges that it resorted to filing the contested

motion because it could not obtain new certificates of title,
considering that petitioner refused to surrender his owner’s
duplicate TCTs. This contention is incorrect. The proper
course of action was to file a petition in court, rather than
merely move, for the issuance of new titles. This was the
procedure followed in Blancaflor by Sarmiento Trading
which was in more or24 less the same situation as the
respondent in this case:

Petitioners’ reliance on prescription and laches is unavailing in

this instance. It was proper for Sarmiento Trading
Corporation to file a petition with the Court of First
Instance of Iloilo, acting as a cadastral court, for the
cancellation of TCT No. 14749 in the name of Gaudencio
Blancaflor and the issuance of another in its name. This is a
procedure provided for under Section 78 of Act No. 496 and
Section 75 of PD No. 1529. . .

Section 78 of Act 496 reads:

Sec. 78. Upon the expiration of the time, if any allowed by law for
redemption after registered land has been sold on any execution,
or taken or sold for the enforcement of any lien of any description,
the person claiming under the execution or under any deed or
other instrument made in the course of the proceedings to levy
such execution or enforce any lien, may petition the court for the
entry of a new certificate to him, and the application may be
granted: Provided, however, That every new certificate entered
under this section shall contain a memorandum of the nature of
the proceeding on

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24 Supra, p. 463.

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Padilla, Jr. vs. Philippine Producers’ Cooperative Marketing
Association, Inc.

which it is based: Provided, further, That at any time prior to the

entry of a new certificate the registered owner may pursue all his
lawful remedies to impeach or annul proceedings under execution
or to enforce liens of any description.

Section 75 of PD 1529 provides:

Sec. 75. Application for new certificate upon expiration of

redemption period.—Upon the expiration of the time, if any,
allowed by law for redemption after the registered land has been
sold on execution, or taken or sold for the enforcement of a lien of
any description, except a mortgage lien, the purchaser at such
sale or anyone claiming under him may petition the court for the
entry of a new certificate to him.
Before the entry of a new certificate of title, the registered
owner may pursue all legal and equitable remedies to impeach or
annul such proceedings.

It is clear that PD 1529 provides the solution to

respondent’s quandary. The reasons behind the law make a
lot of sense; it provides due process to a registered
landowner (in this case the petitioner) and prevents the
fraudulent or mistaken conveyance of land, the value of
which may exceed the judgment obligation. Petitioner
contends that only his interest in the subject lots, and not
that of his wife who was not a party to the suit, should
have been subjected to execution, and he should have had
the opportunity to prove as much.
While we certainly will not condone any attempt by
petitioner to frustrate the ends of justice—the only way to
describe his refusal to surrender his owner’s duplicates of
the certificates of title despite the final and executory
judgment against him—respondent, on the other hand,
cannot simply disregard proper procedure for the issuance
to it of new certificates of title. There was a law on the
matter and respondent should have followed it.
In any event, respondent can still file the proper petition
with the cadastral court for the issuance of new titles in its
name.
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Salvador vs. People

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WHEREFORE, the instant petition is hereby GRANTED.

The decision of the Court of Appeals in CA-G.R. CV No.
53085 is hereby REVERSED. The order of the Regional
Trial Court of Bacolod City ordering the Register of Deeds
of Bago City to issue new certificates of title in favor of
respondent is ANULLED.
SO ORDERED.

          Panganiban (Chairman), Sandoval-Gutierrez,

Carpio-Morales and Garcia, JJ., concur.

Petition granted, judgment reversed.

Note.—The dismissal of the action for annulment of the

sale put effectively to rest the issues relating to the validity
and regularity of the execution sale. (Francisco vs. Cruz,
340 SCRA 76 [2000])

——o0o——

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