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[ G.R. No. 129713. October 2, 2000]

CAGAYAN DE ORO COLISEUM, INC. vs. CA, et al.

FIRST DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated OCT 2 2000.

G.R. No. 129713 (Cagayan de Oro Coliseum, Inc. vs. Court of Appeals, et al.)

Petitioner Cagayan de Oro Coliseum, Inc. and private respondents Sheriff Maximiano Mabanag, Jr. and Richard Go King ("Go King") filed their respective motions for reconsideration of this Court's Decision dated December 15, 1999, the dispositive portion of which states:

WHEREFORE, the petition is GRANTED and the Decision and Resolution of respondent Court of Appeals in CA-G.R. CV No. 43782 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court Branch 19, Cagayan de Oro City in Civil Case No. 89-098 and Special Civil Action No. 6811 is REINSTATED with the MODIFICATION that execution proceedings may henceforth issue, unless petitioner fully discharges its indebtedness under the execution order of November 26, 1986.

SO ORDERED. 1 Rollo , p. 680.

Petitioner claims that its obligation to pay its debt pursuant to the Compromise Judgment had already been satisfied by a third party, private respondent Go King, who paid to Commercial Credit Corporation ("Commercial Credit") an amount equivalent to petitioner's debt when he purchase the latter's parcel of land at the execution sale of February 13, 1987. Although the execution sale was later declared void, Go King may still recover the amount he paid from petitioner as the latter had earlier tendered by consignation to the Court of First Instance (now Regional Trial Court) of Misamis Oriental an amount equivalent to that paid by Go King for the lot, plus interest. Petitioner thus concludes that execution proceedings would be unnecessary considering that the obligation to Commercial Credit Corporation has been extinguished.

Private respondents, on the other hand, posit that the execution sale on February 13, 1987 was valid even though there was no notice of levy. They claim that there was no need to issue a notice of levy before said sale since no third party were involved with dealings on the lot subject of the sale, and that the subsequent registration of the certificate of sale of the lot with the Register of Deeds of Cagayan de Oro City served as notice of levy on the said property. Private respondents further argue that petitioner's exercise of its right of redemption as an alternative cause of action was an implied admission of the validity and regularity of the execution proceedings.

We find no error in the assailed Decision.

As was discussed therein, there is no identity of subject matter in the present case and in CA-G.R. SP No. 10888, 2 In this case, petitioner sought to have the compromise judgment dated February 25, 1980 annulled on the ground that Commercial Credit committed fraud and misrepresentation which petitioner discovered only in 1983. which was later reversed by this Court in G.R. No. 78315. 3 Commercial Credit Corporation of Cagayan de Oro vs. Court of Appeals, 169 SCRA 1 (1989). The Court in this case affirmed in toto the compromise judgment dated February 25, 1980. The issues involved in CA-G.R. SP No. 10888 were the validity of the compromise judgment and the violation of petitioner's right to due process as a result of the trial court's grant of Commercial Credit's ex parte motion for issuance of a writ of execution. In contrast, the present case revolves around the validity of the excution proceedings after the validity of the compromise judgment was affirmed, as well as the validity of petitioner's exercise of the right of redemption. There is, therefore, no res judicata in the case at bar.

There is no merit in private respondents' contentions that the execution sale on February 13, 1987 was valid and that the Notice of Levy dated March 11, 1983 was a levy on the lot subject of the said execution sale. The March11, 1983 Notice of Levy was made pursuant to the order of execution of the trial court dated March 9, 1983, which was substantially amended by the order of execution which it subsequently issued on November 26, 1986, pursuant to a motion for reconsideration filed by petitioner. The November 26, 1986Order reduced the amount of petitioner's principal debt from P70,152.68 to P64,956.19 but added the monthly penalty of 3% and additional attorney's fees of 5%, thereby increasing the amount of petitioner's obligation to P167,367.40, or more than double the amount stated in the March 9, 1983 Order. The amendment by the November 26, 1986 Order of the trial court issued on March 9, 1983 was of such a proportion that it superseded the latter and gave rise to an entirely new order, 4 See Esquivel vs. Alegre, 172 SCRA 315 (1989), Sta. Romana vs. Lacson, 104 SCRA 93 (1981). thereby extinguishing the same.

Moreover, the March 9, 1983 Order of the trial court was not a valid order of execution since the same did not conform to the compromise judgment dated February 25, 1980. While the compromise judgment declared that Cagayan de Oro Coliseum, Inc. was liable to pay Commercial Credit Corporation, the March 9, 1983 Order commanded the sheriff to satisfy the corporation's obligation out of the properties of the petitioners therein, who were shareholders of the corporation and who had juridical personalities separate and distinct from that of the corporation. 5 See Yu vs. National Labor Relations Commission, 245 SCRA 134 (1995). Said order was, therefore, void for it is a settled rule that a writ of execution must conform to the judgment to be executed, 6 Viray vs. Court of Appeals, 286 SCRA 468 (1997), Abinujar vs. Court of Appeals, 243 SCRA 531 (1995), Buan vs. Court of Appeals, 235 SCRA 424 (1994), GSIS vs. Court of Appeals, 218 SCRA 233 (1993). and if ut varies the judgment pursuant to which it was issued, it is void. 7 Philippine Bank of Communications vs. Court of Appeals, 279 SCRA 364 (1997). Consequently, the Notice of Levy dated March 11, 1983, which was made pursuant to the March 9, 1983 Order, 8 The Notice of Levy dated March 11, 1983 states:

Entry No. 103724 - Notice of Attachment or Levy executed by Arturo B. Acero - Deputy Provincial Sheriff, that the Provincial Sheriff or any of his deputied is commanded to make out of the properties, personal and real of petitioner - Ralph T. Willkom, in the amount of P70,152.68 representing the outstanding obligation of petitioners by way of their compromise agreement, excluding sheriff's fees and expenses, all the titles, rights, interest, shares and participations of said petitioners Ralph Lou T. Willkom, et al., petitioners v. Rufo J. Waminal, etc., Commercial Credit Corporation of Cagayan de Oro City, etc., "Special Civil Action No. 6811, For Injunction." (Date of Instrument - March 11, 1983. Date of Inscription - March 11, 1983 at 1:30 P.M.) [Official Records II, pp. 245-246, Emphasis supplied.] is, likewise, void.

In the assailed Decision, this Court noted that the November 26, 1986 Order of Execution issued by the trial court was not filed with the Register of Deeds of Cagayan de Oro City before the execution sale on February 13, 1987, but was registered only on December 7, 1988, after the conduct of the execution sale, the issuance of the Sheriff'sCertificate of Sale, the issuance of the Sheriff's Certificate of Final Deed of Conveyance, and the transfer of petitioner's title to the lot subject of the sale to private respondent Go King. Neither was there a notice of levy filed with the Register of Deeds before said sale. These procedural infirmities rendered said execution sale void and of no legal effect; consequently, Go King did not acquire a valid title to the lot subject of the sale. Our pronouncement is in accord with our previous rulings that a valid levy is necessary for execution proceedings to be valid. 9 Valenzuela vs. de Aguilar, 8 SCRA 212 (1963), Llenares vs. Valdeavella, 46 Phil. 358 (1963), Consolidated Bank and Trust Corporation vs. Court of Appeals, 193 SCRA 158 (1991). Without a proper levy, the property is not placed under the jurisdiction of the court; hence, no valid transfer of title over the property from the judgment debtor to the buyer in an execution sale can be made absent said prerequisite.

There is likewise no error in our declaration that petitioner's act of consigning an amount equivalent to be the redemption price of the lot subject of the February 13, 1987 execution sale with the trial court which rendered the compromise judgment is not an implied admission of the validity of the said execution proceedings, which is being questioned by petitioner. Petitioner had made it clear that even though it was consigning the redemption money, it was not admitting the validity of the questioned execution sale, and that such consignment was merely an alternative cause of action in the event that the validity of the execution sale of February 13, 1987 is upheld. The pleading of alternative causes of action is allowed under Section 2, Rule 8 of the Revised Rules of Court, as amended:

Sec. 2. Alternative causes of action or defenses. - A party may set forth two or more statements of a claim or defense alternatively or hypothetically, either in one cause of action or defense or in separate causes of action or defenses. When two or more statements are made in the alternative and one of them if made independently would be sufficient, the pleading is not made insufficient by the insufficiency of one or more of the alternative statements.

Finally, this Court does not agree with petitioner that execution proceedings pursuant to the November 26, 1986 Order of the trial court is no longer necessary in view of the fact that its obligation to the judgment creditor, Commercial Credit, pursuant to the compromise judgment of January 25, 1980 had been satisfied by its receipt of the purchase price paid by Go King during the execution sale on February 13, 1987; and that Go King had in turn been reimburse by virtue of petitioner's consignation in the trial court of an amount equivalent to the purchase price of the lot, plus interest. The execution sale of February 13, 1987 is void and produced no legal effects. As a consequence thereof, the parties are deemed restored to their status prior to said invalid sale, thus: (1) title to the lot subject of the sale remains with petitioner; (2) Go King therefore would have no title thereto and should be reimbursed by (Commercial Credit) for the amount he paid therefor; and (3) meanwhile, petitioner's unpaid obligation to Commercial Credit subsists. Considering the foregoing, this Court did not err in ruling that unless petitioner fully discharges its obligation to Commercial Credit under the November 26, 1986 Order, execution proceedings may henceforth issue.

WHEREFORE, the motions for reconsideration of both petitioner and private respondent are hereby DENIED for lack of merit.

J. Puno and J. Santiago, no part.

Very truly yours,

(Sgd.) VIRGINIA ANCHETA-SORIANO

Clerk of Court

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