G.R. No. 164740 - Spouses Versola vs. Court of Appeals

Private respondent Dr. Victoria T. Ong Oh granted a loan of ₱1,000,000.00 to Dolores Ledesma.
As security, Ledesma issued a post-dated check for the loan amount and promised to execute a real estate mortgage over her house and lot located in Tandang Sora, Quezon City, covered by Transfer Certificate of Title (TCT) No. RT-51142.
The deed of real estate mortgage was never executed, but Ledesma delivered the owner’s duplicate copy of the TCT to private respondent.

Ledesma sold the said house and lot to petitioners spouses Eduardo and Elsa Versola for ₱2,500,000.00.
Petitioners paid ₱1,000,000.00 as downpayment, with the balance of ₱1,500,000.00 to be paid in monthly installments of ₱75,000.00 starting 15 March 1993.
Before installments were due, Ledesma demanded full payment of the remaining balance; petitioners paid only ₱50,000.00.

Petitioners applied for a ₱2,000,000.00 loan from Asiatrust Bank to settle Ledesma’s demand.
A tripartite agreement among petitioners, Ledesma, private respondent, and Asiatrust was reached, stipulating:

Private respondent would grant Ledesma an additional ₱450,000.00 loan, increasing Ledesma’s debt to ₱1,450,000.00, which would be credited as full payment by petitioners.
Ledesma would execute a Deed of Sale transferring the property to petitioners.
Private respondent would deliver the duplicate title to Asiatrust.
Petitioners would mortgage the property to Asiatrust to secure the ₱2,000,000.00 loan.
Asiatrust would directly pay ₱1,500,000.00 to private respondent after registration of the mortgage lien.

Private respondent granted the additional loan to Ledesma; Ledesma executed the Deed of Sale to petitioners.
The title was transferred to petitioners and Asiatrust received the duplicate copy.
Asiatrust approved the loan and petitioners issued a check for ₱1,500,000.00 to private respondent.
A notice of levy for ₱214,284.00 on the property was found, causing Asiatrust to refuse registration of the mortgage and disbursement of the loan.
Checks issued by Ledesma and petitioners were dishonored—Ledesma’s due to a closed account, petitioners’ due to a stop payment.

Private respondent filed suit against Ledesma, petitioners, and Asiatrust for sum of money.
RTC, Branch 217, Quezon City, ruled in favor of private respondent, ordering petitioners to pay ₱1,500,000.00 plus legal interest, and awarded moral damages, exemplary damages, and attorney’s fees.
Petitioners appealed; Court of Appeals affirmed the judgment but deleted the award of moral, exemplary damages and attorney’s fees.
No further appeal was filed; decision became final.

Private respondent moved for execution; property covered by TCT No. 83104 in petitioners’ names was levied and scheduled for public auction.
Petitioners filed various objections to the sale and motion to suspend it but these were disregarded or treated as mere scraps of paper due to procedural defects.
Despite objections, the property was sold at public auction and awarded to private respondent.
Petitioners failed to redeem within the period; sheriff’s final deed of sale was issued to private respondent.

Petitioners asserted that the property was their family home, exempt from execution under the Family Code provisions.
They contended compliance with procedural requirements under Articles 152 to 160 of the Family Code, particularly the necessity of court approval before auction sale (Article 160), was not observed.
Petitioners argued defects in the execution sale, including sheriff’s reference to an outdated decision and failure to properly recognize their objections.
Trial court dismissed petitioners' objections, stating lack of prior motion to suspend sale, absence of proof that property was family home, and that objections were raised belatedly nearly two years after auction.
Court emphasized the requirement that exemption for family home must be timely raised and proven in due form, not after execution sale has been completed.

Whether compliance with the provisions of Articles 152 to 160 of the Family Code, in relation to Article III Section 1 of the Constitution, is mandatory in the execution sale of the family home.

Whether the requirement under Article 160 of the Family Code for an application to the court for an order directing an auction sale of the family home is mandatory and a condition sine qua non for such sale to be valid.

Whether petitioners properly asserted and proved their claim that the property sold was their family home exempt from execution.