EN BANC

[G.R. No. L-3619. October 29, 1951.]

BERNARDO TIGLAO , plaintiff-appellee, vs . ENGRACIO BOTONES ,

defendant-appellant.

Barrera, Calanog & Alafriz, for appellant.

Enrico I. de la Cruz, for appellee.

SYLLABUS

1. MORTGAGE; CONFIRMATION OF SHERIFF'S SALE; NOTICE AND HEARING

OF MOTION FOR CONFIRMATION, ESSENTIAL. — Notice and hearing of a notice for
confirmation of a sheriff's sale is essential to the validity of the order of confirmation.
2. ID.; ID.; ID.; FINAL ORDER OF CONFIRMATION, IF VOID, MAY BE SET ASIDE
AT ANY TIME. — An order of confirmation, void for lack of notice and hearing, may be
set aside at any time.
3. OBLIGATIONS AND CONTRACTS; MORATORIUM; PROCEEDINGS FOR
CONFIRMATION OF SHERIFF'S SALE AND WRIT OF POSSESSION BY VIRTUE OF FINAL
FORECLOSURE JUDGMENT, NOT COVERED BY MORATORIUM. — Moratorium cannot
be invoked against a motion for confirmation of sheriff's sale and corresponding
motion for writ of possession filed pursuant to a final foreclosure judgment.

DECISION

PARAS , C.J : p

In civil case No. 5115 of the Court of First Instance of Tarlac in which Bernardo
Tiglao was the plaintiff and Engracio Botones the defendant, judgment was rendered
on March 24, 1943, the dispositive part of which reads as follows: "El Juzgado, de
acuerdo con dicho convenio, condena al demandado al pago de la cantidad de P4,000
con los intereses de 12 por ciento al año desde el 29 de Noviembre de 1937 hasta su
pago completo y se le ordena que deposite esta cantidad en poder del Escribano
dentro del plazo de 90 días, de lo contrario se ordenará la ejecucion de la sentencia
vendiendo en publica subasta los bienes hipotecados, con las costas a cargo del
demandado."
Upon motion of the plaintiff, the Court of First Instance of Tarlac on July 20,
1943, ordered the issuance of a writ of execution. Accordingly, on October 9, 1943, the
provincial sheriff sold at public auction the mortgaged properties to the plaintiff as the
highest bidder. On March 7, 1944, the plaintiff led an ex parte motion with the Court of
First Instance of Tarlac, for the con rmation of the sale in his favor. On March 22, 1944,
the court issued the following order: "As prayed for in the motion for con rmation of
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 the Sheriff's sale dated October 9, 1943, of lots Nos. 784 and 1146 of the cadastral
survey of Concepcion executed by the Provincial Sheriff of Tarlac in favor of Bernardo
Tiglao, pursuant to the order of execution entered herein, the said sale is hereby
APPROVED.'"
On May 7, 1948, the plaintiff led with the Court of First Instance of Tarlac a
motion for the issuance of a writ of possession. The defendant led an opposition
alleging (1) that the judgment of March 24, 1943, is null and void, because the
defendant's former counsel had no special authority to settle the case in the manner
stated in said judgment, and (2) that the sheriff's sale was not legally con rmed,
because the defendant was not given notice of the motion for con rmation or its
hearing. On June 30, 1948, the court granted plaintiff's motion for the issuance of a writ
of possession. The defendant led on July 7, 1948, a motion for reconsideration and
under date of September 9, 1948, a motion invoking moratorium under Republic Act
No. 342 and praying that all proceedings be suspended. In its order of October 12,
1948, the Court of First Instance of Tarlac denied the motion for reconsideration. The
defendant appealed.
Appellant's rst contention is that the trial court erred in sustaining the order
con rming the sheriff's sale and in issuing the corresponding writ of possession in
favor of the appellee. Under section 3 of Rule 70 of the Rules of Court, the sale of
mortgaged property "when con rmed by an order of the court . . . shall operate to
divest the rights of all the parties to the action and to vest their rights in the purchaser,
subject to such rights of redemption as may be allowed by law." The effect of
con rmation was more elaborately explained in the case of Raymundo vs. Sunico, 25
Phil., 365, 368-369, as follows: "As the title to mortgaged real property does not vest in
purchaser until after the con rmation of the sale, he has, prior to that time, no right to
the possession of such property, and no legal cause of complaint against the
defendants, who remain in possession, exercising the rights of ownership. On the other
hand, the mortgagors have no means, until after the con rmation, of compelling the
purchaser to comply with the terms of the sale. Should the mortgagors attempt to
compel a purchaser to pay in his money, an answer on the part of the purchaser to the
effect that the sale had not been con rmed would be suf cient. The con rmation
operates to divest the title out of the former owner and to vest it in the purchaser. It is
at this time when the rights or title passes, and not before. Sales of mortgaged real
estate should be more strictly scrutinized than ordinary sales under execution. In the
former the title, as we have said, passes to the purchaser upon con rmation by the
court, and the defendant or debtor has no right to redeem within the statutory period
granted in cases of ordinary execution sales. In some of the States of the American
Union there are statutes permitting the mortgagor to redeem after the foreclosure sale
has been con rmed. There is no such privilege extended to him by statute in the
Philippine Islands. The right of the mortgagor and those claiming under him to redeem
from the mortgagee is extinguished by the foreclosure when the same has been
properly made. But, up to the time of con rmation the title remains in the mortgagor".
In said case this Court already held that a hearing "is a very essential part of those
proceedings because the hearing gives the interested parties an opportunity to lay
before the court their reasons why the sale should or should not be con rmed, and it is
the result of this hearing which divests the title if the sale is confirmed."
In the case of Grimalt vs. Velasquez, 36 Phil., 936, 938, this Court, relying upon its
decision in Raymundo vs. Sunico, supra, ruled that "in order that a foreclosure sale may
be validly con rmed by the court, it is necessary that a hearing be given the interested
parties at which they may have an opportunity to show cause why the sale should not
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 be confirmed; that a failure to give notice is good cause for setting aside the sale."
In the cases of La Urbana vs. Belando, 54 Phil. 930, and Anderson vs. Reyes, 54
Phil. 944, it was held, following the decision in Grimalt vs. Velasquez, supra, that after
the sale of mortgaged property and before its con rmation, the court may still grant
the judgment debtor an opportunity to pay the amount of the judgment. In other words,
until a sheriff's sale is validly con rmed, the judgment debtor may exercise a right of
redemption.
Notice and hearing of a motion for con rmation are therefore essential to the
validity of the order of con rmation, not only to enable the interested parties to resist
the motion but also to inform them of the time when their right of redemption is cut off.
It is argued for the appellee that because section 3 of Rule 70 does not carry the
last part of section 257 of Act 190 to the effect that "should the court decline to
con rm the sale, for good cause shown, and should set it aside, it shall order a resale in
accordance with law," the cases hereinabove cited are no longer ef cacious. We
disagree. The fact that the present rules still require con rmation of the sheriff's sale
implies the power of the court to either con rm the same or not, when asked. And the
court may properly exercise its judgment on the matter only after hearing both parties.
Indeed, there is reason to suppose that the omitted provision is superfluous.
The case of Commonwealth of the Philippines vs. Ching Yap, 70 Phil., 116, citing
So Chu vs. Nepomuceno, 29 Phil., 208, Jaranillo vs. Jacinto, 43 Phil. 588, Price vs.
Sontua, 60 Phil. 410, and National Investment Board vs. Peña, G. R. No 46448, May 29,
1939, invoked by the appellee, is obviously not controlling. In said case this Court found
that notice of the motion for con rmation was sent to the judgment debtors at their
address of record and when said notice was returned to the judgment creditor, the
latter led it with the clerk of court in accordance with Rule 20 of the Rules of Courts of
First Instance. What the creditor did was held suf cient, because if the debtors failed to
receive the notice sent to their address appearing in the record, it was their fault. The
statement in said case, therefore, that lack of notice does not deprive the court of its
jurisdiction to approve a sheriff's sale, was purely an obiter dictum. Moreover, the cases
of So Chu vs. Nepomuceno, Jaranillo v s . Jacinto, Price vs. Sontua, and National
Investment Board vs. Peña, did not involve situations in which con rmation of sheriff's
sales was upheld although there was no notice or hearing.
In the more recent case of Somera vs. Navarro, 42 Off. Gaz., 2106, it was
contended that no 3-day notice of the motion for con rmation was given, because the
hearing of the motion was set for July 26, 1941, the notice was mailed to the appellants
on July 23 and received by them on July 24. It appears, however, that at the hearing on
July 26, the appellants were present and at their instance said hearing was postponed
to August 9. Other postponements were conceded and the motion was not heard until
December 4, 1942. This Court held: "Resulta evidente, por tanto, que la regla sobre
noti caciones se cumplio substancialmente, y que toda discusion ahora sobre el
particular viene a ser meramente academica, porque, aun suponiendo que la primera
noti cacion haya sido irregular, de ella no se siguio ningún perjuicio para los apelantes,
toda vez que la mocion no se considero y resolvio sino despues de varias
transferencias, de los cuales aquellos habían sido debidamente avisados." We have
thus inferentially recognize the essential need for notice of a motion for con rmation of
a sheriff's sale, for, on the contrary supposition, we would have summarily dismissed
appellant's contention and held that notice and hearing were unnecessary.

In the case at bar, the lower court undoubtedly had acquired jurisdiction over the
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 foreclosure proceedings but, in con rming the sheriff's sale without the essential
requisite as to notice of the motion for con rmation, it exceeded its power, with the
result that the order of con rmation is null and void. As stated by Mr. Justice Feria in
Caluag et al. vs. Pecson et al., * 46 Off. Gaz., 514, "a wrong, or for that matter a correct,
decision is void, and may be set aside either directly or collaterally, where the court
exceeds its jurisdiction and power in rendering it." In Ang Lam vs. Rosillosa, * 47 Off.
Gaz., Supp. (12), 103, it was held that "a void judgment may be assailed or impugned at
any time either directly or collaterally, by means of a petition led in the same case or
by means of a separate action, or by resisting such judgment in any action or
proceeding wherein it is invoked." Hence there is no merit in appellee's contention that
the order of con rmation had become nal and cannot be set aside after the 6-month
period provided in Rule 38 of the Rules of Court, within which relief could be asked, had
expired.
The second contention of the appellant is that the trial court erred in not
suspending the proceedings because of the Moratorium Law (Republic Act No. 342).
This contention is untenable. The foreclosure judgment had long become nal. By his
motion for confirmation of the sheriff's sale and his motion for a writ of possession, the
appellee sought to recover, not a monetary obligation, but the properties sold to him at
public auction. What was held in Barrozo vs. Macaraeg, 46 Off. Gaz., 4932, is decisive
against appellant's position. "The debt moratorium merely prohibited the enforcement
by action of the debts therein included; and in this case no one is attempting to force
anybody to pay his debt. The judgment debtor whose property has been sold is not in
debt for the redemption money. He could not be required by action to redeem. Hence,
he is not entitled to invoke the suspension."
Wherefore, the order of March 22, 1944, con rming the sheriff's sale of the
mortgaged properties, being null and void, the order of June 30, 1948, granting
appellee's motion for the issuance of a writ of possession is hereby set aside, without
prejudice to appellee's right to move anew for the con rmation of the sheriff's sale in
his favor, with due notice and hearing. So ordered, without costs.
Feria, Pablo, Bengzon, Padilla, Tuason, Reyes, Jugo and Bautista Angelo, JJ.,
concur.

Footnotes

* 82 Phil., 8.
* 86 Phil., 447.

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