Title
Supreme Court
Jalbuena vs. Gellada
Case
A.M. No. P-93-995
Decision Date
Jul 12, 1996
Jalbuenas' properties auctioned to satisfy debts; excess proceeds not returned, violating court rules. Respondents fined for procedural errors, no dishonesty found.

Case Digest (A.M. No. P-93-995)
Expanded Legal Reasoning Model

Facts:

  • Parties Involved
    • Complainant: Roberto Jalbuena, defendant in Civil Case No. 1184 and husband in Civil Case No. 1187.
    • Respondents:
      • Edgardo Gellada, Clerk of Court IV (misstated by the complainant as Eduardo Gellada), and
      • Rex Fuentebella, Sheriff III or Deputy Sheriff of the Municipal Trial Court in Bago City, Negros Occidental.
  • Underlying Civil Cases and Judgments
    • Civil Case No. 1184:
      • Filed by Ilawod Farmer’s Multi-Purpose Cooperative, Inc. (Ilawod) to collect a crop loan of P6,500.
      • Judgment rendered for P6,500 plus P1,000 for litigation and attorney’s fees and costs of suit.
    • Civil Case No. 1187:
      • Filed by the same cooperative against Magdalena Jalbuena, Roberto Jalbuena’s wife, demanding P7,250.
      • Judgment rendered for P7,250 plus P1,000 for attorney’s fees, litigation expenses, and costs of suit.
  • Execution of Judgments and Issuance of Writs
    • Motion by judgment creditor Ilawod led to the issuance of two writs of execution against the Jalbuenas.
    • Issuance and Service Details:
      • For Magdalena Jalbuena – Writ issued on October 8, 1991, allegedly served on October 16, 1991 (read to her by her daughter).
      • For Roberto Jalbuena – Writ issued on October 16, 1991, allegedly served on October 17, 1991 by the deputy sheriff.
  • Garnishment and Auction Sale of Properties
    • On October 16, 1991, a motorized tricycle parked at the Jalbuenas’ residence was levied by the deputy sheriff.
      • The tricycle was subject to competing claims:
        • Norkis Distributors, Inc. claimed absolute ownership over the tricycle (excluding its sidecar), asserting that Roberto Jalbuena had an unpaid balance of P34,975 on an installment sale covered by a chattel mortgage.
ii. Hernando Nacion filed a “Third Party Claim” for ownership of the sidecar in Civil Case No. 1187.
  • Indemnity Bonds:
    • In anticipation of third party claims, judgment creditor Ilawod filed indemnity bonds in the amounts of P40,000.00 (Civil Case No. 1184) and P7,000.00 (Civil Case No. 1187).
    • These bonds were duly approved by the trial court.
  • Notice of Sale:
    • Issued by the respondent clerk of court on or before August 19, 1992, posted in three conspicuous places and served by the deputy sheriff as required by Section 18 of Rule 39.
  • Auction Sale (August 31, 1992):
    • In Civil Case No. 1184, the subject motorcycle was auctioned resulting in two bids:
      • P34,975.00 bid by Norkis (the unpaid balance of the installment sale) and
ii. A higher bid of P35,000.00 by judgment creditor Ilawod, who took possession by paying his bid amount.
  • In Civil Case No. 1187, the sidecar was auctioned resulting in a winning bid by Ilawod at P10,000.00.
  • Distribution of Auction Proceeds:
    • In Civil Case No. 1184, from the P34,975.00 received, the same amount was remitted to Norkis to settle the outstanding debt on the motorcycle, with a remaining balance of P25.00 retained in favor of Ilawod.
    • In Civil Case No. 1187, the proceeds of P10,000.00 were credited to Ilawod to satisfy Magdalena Jalbuena's judgment debt.
  • Complainant’s Allegations
    • Demand for Excess Proceeds:
      • The total judgment debts amounted to P17,150.00, yet the properties were sold for P45,000.00.
      • Complainant argued that the excess of P27,850.00 should have been remitted to him.
    • Procedural Allegations Against the Respondent Clerk of Court:
      • Improper request for additional payment of P1,500.00 from Roberto Jalbuena.
      • Failure to notify him of the auction sale and failure to provide copies of the auction proceedings.
    • Claim of Violation of Section 17, Rule 39:
      • The remittance of P34,975.00 to third party claimant Norkis was accused of being a violation.
  • Respondents’ Defense
    • Compliance with the Execution Procedure:
      • Acknowledgement that the notices of sale were properly posted and served as provided by law.
      • The Jalbuenas’ alleged refusal to acknowledge receipt of the service.
    • Proper Accounting of Auction Proceeds:
      • Assertion that all funds were properly accounted for and the amount received from the auction sale was transmitted to judgment creditor Ilawod.
    • Explanation of the P1,500.00 Payment:
      • The amount was deposited as partial payment for the debt and subsequently transmitted to Ilawod.

Issues:

  • Whether the respondents (Clerk of Court and Deputy Sheriff) complied with the procedural requirements under Sections 15, 16, and 17 of Rule 39 of the Rules of Court in executing the money judgments.
    • Did the respondents properly levy on the debtor’s property and direct the proceeds of the auction sale following the specific order of application as mandated?
    • Was the excess amount from the auction sale correctly handled by applying it to the judgment debt and returning any surplus to the judgment debtor?
    • Does the remittance of auction proceeds to a third party claimant (Norkis) violate Section 17, Rule 39?
  • Whether the alleged failures in notification and provision of auction proceedings to the Jalbuenas invalidate the procedures followed by the respondents in the execution process.
  • Whether the procedural lapses, if any, warrant administrative sanctions against the respondents.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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