G.R. No. L-47579 - Jalandoni vs. Philippine National Bank

On March 31, 1959, the Court of First Instance of Manila rendered a judgment ordering Eduardo Jalandoni to pay the Philippine National Bank the sum of P63,297.53, plus daily interest from March 6, 1959, attorney's fees at ten percent of the total, and costs.
The judgment became final and executory, thereby enabling enforcement procedures pursuant to the law on execution of judgments.

Within five years from the entry of judgment, on March 9, 1964, the sheriff of Silay City levied on Lot No. 657-C (seventeen hectares) covered by Transfer Certificate of Title No. T-1827, later replaced by TCT No. T-3202 in Eduardo Jalandoni’s name.
The levy was formally annotated in both titles with a “Notice of Embargo” indicating that the lot was subject to levy on execution in relation to Civil Case No. 38393.
No subsequent efforts were made by the Philippine National Bank to invoke an execution sale at a public auction to satisfy the judgment.

On April 22, 1974, over ten years after the levy was made, Jalandoni petitioned the Court of First Instance of Negros Occidental at Silay City for the cancellation of the levy on the ground of prescription. This petition was invoked under land registration proceedings (LRC Cadastral Record No. 86 for Lot No. 657-C).
The petition was opposed by the bank, and the lower court directed Jalandoni to seek a quashing of the writ of execution in the Manila court before re-filing the cancellation petition.
On May 20, 1975, Jalandoni filed an action to quiet title or cancel the notice of embargo on the basis that more than ten years had elapsed without an execution sale, rendering the levy a cloud upon his title.
The trial court dismissed the complaint on June 15, 1977, prompting Jalandoni’s heirs (after his death on January 20, 1977) to appeal under Republic Act No. 5440.

The case involved the application of the rule that a judgment must be executed within five years from its entry or from the date it becomes final and executory, and that any execution sale must occur within ten years from the judgment’s entry.
The heirs relied on the ruling in Ansaldo vs. Fidelity and Surety Co. of the P.I. (88 Phil. 547, 1951), which emphasized that properties levied upon must be sold by public auction within the ten-year period in which the judgment is enforceable.
The bank and the trial court argued that even if the sale was not held within ten years, the validity of the levy was maintained if executed within the prescribed five-year period for levying the property, citing decisions such as Del Rosario vs. Yatco.

The court found that the bank, through its employees, had neglected its duty by failing to require the sheriff to conduct the execution sale promptly.
The failure to act in a timely manner resulted in the levied property being held beyond the statutory period for achieving an effective sale, thereby clouding the title.

Whether the execution sale could be validly held after the expiration of the ten-year period for enforcing a judgment even if the levy was effected within the statutory five-year period.
Whether a valid levy, annotated on the title within the allowed period, remains enforceable if no sale is conducted within the prescribed timeframe, ultimately rendering it a cloud over the title.

The extent to which the negligence of the bank’s employees in failing to secure an execution sale affected the creditor’s rights.
Whether the doctrine of laches and the running of the statute of limitations due to inaction could bar the enforcement of the right to an execution sale.

Whether the rule in Ansaldo vs. Fidelity and Surety Co. applies directly to this case.
The proper interpretation of relevant rulings (e.g., Del Rosario vs. Yatco and Southern Cal. Lumber Co. vs. Hotel Co.) with respect to the period allowed for an execution sale and enforcement of judgments.