Case Summary (G.R. No. 217860)
Relevant Laws and Procedural Posture
The case pertains to the application of Rule 68, Sections 2 and 3 of the 1997 Rules of Court, which govern judicial foreclosures, and the requirement under these rules that a foreclosure judgment must specify the amount due, including interest and costs, and fix a redemption period for the judgment debtor. The Philippine Supreme Court employs the 1987 Constitution as the legal framework, considering the decision date is January 29, 2024.
Antecedent Decisions and Findings
On December 20, 1999, RTC Branch 158 ruled in favor of spouses Tiglao, declaring the deed of absolute sale as an equitable mortgage, fixing the redemption sum at PHP 300,000.00 within three months of finality. The Court of Appeals (CA) partially affirmed the ruling on December 17, 2004, particularly as to the nature of the transaction being an equitable mortgage and the amount due but set aside the trial court's order to pay more than PHP 1 million. A subsequent Supreme Court resolution denied spouses Lontoc's appeal on July 25, 2005.
Foreclosure Proceedings and RTC Branch 153 Decision
Spouses Lontoc filed a foreclosure complaint, asking for an order requiring spouses Tiglao to pay PHP 300,000.00 plus 12% interest and attorney’s fees within 90 days, with sale upon default. RTC Branch 153 rendered a decision on February 17, 2011, declaring the property foreclosed but failed to indicate the specific amount due or the period to pay, contrary to the requirements of Rule 68, Section 2. The decision only awarded attorney’s fees of PHP 60,000.00 and costs.
Motion for Execution and RTC Errors
Spouses Tiglao moved for execution, pointing out that the February 17, 2011 decision lacked an amount and redemption period, requesting a writ of execution ordering payment of PHP 360,000.00 within 90 days. The RTC granted this motion on June 24, 2011, and issued a writ of execution on July 8, 2011, improperly supplying the missing terms and allowing a 120-day redemption period. Subsequently, when spouses Tiglao paid PHP 360,000.00, RTC Branch 153 denied a motion for a writ of possession and instead ordered the property to be sold at public auction, recalling the writ of execution—an action later questioned by the CA.
Court of Appeals Ruling
The CA set aside the RTC’s orders denying the writ of possession and recalled writ of execution, directing RTC Branch 153 to issue a writ of possession to spouses Tiglao and proceed with foreclosure pursuant to the Rules of Court. The CA emphasized the procedural steps in Rule 68 for foreclosure execution, noting that the RTC erred in denying possession and ordering sale prematurely, which violated the principles of immutability of judgments and proper foreclosure procedure.
Issues Raised on Petition for Review
Spouses Lontoc contended that the CA decision violated the law and prior rulings by allowing spouses Tiglao to redeem the property after the lapse of the three-month period fixed in the 2004 CA decision, which had been rendered final. They also argued that the redemption sum fixed in the writ of execution lacked basis in the February 17, 2011 decision and that interest should properly accrue due to the lengthy delay.
Legal Analysis: Requirements of Rule 68
Under Rule 68, Section 2, a judgment of judicial foreclosure must clearly specify (1) the amount owed including principal, interest, costs, and (2) a redemption period of not less than 90 nor more than 120 days from entry of judgment. Only after the judgment debtor’s failure to pay within the fixed period may the property be ordered sold at public auction per Rule 68, Section 3. The February 17, 2011 RTC decision was incomplete as it did not provide these essential details and was thus ineffectual and non-executable.
Amendment of Incomplete Foreclosure Decision
Relying on precedents such as Rodriguez v. Caoibes and Philippine Trust Co. v. Policarpio, the Court held that a final but incomplete foreclosure judgment may be corrected by amendment to include missing statutory contents. The February 17, 2011 decision should have been amended by RTC Branch 153 to specify the sum due and the period to pay before execution could proceed.
Invalidity of Writ of Execution and Payment by Spouses Tiglao
The writ of execution issued on July 8, 2011, based on the June 24, 2011 order granting spouses Tiglao’s motion, was rendered null and void as it attempted to supply omitted terms from an incomplete judgment. The payment of PHP 360,000.00 by spouses Tiglao pursuant to that writ was invalid and should be returned.
Improper Sale Order and Principle of Immutability of Judgment
The November 28, 2011 RTC order directing the property’s sale by public auction before the redemption period lapsed or proper execution was grounds for reversing, as it violated Rule 68 and the immutability of judgments by altering the foreclosure procedure set forth in the February 17, 2011 decision.
Distinction Between Right of Redemption and Equity of Redemption
The Court affirmed jurisprudence distinguishing the right of redemption (only in extrajudicial foreclosure and granted under Act 3135) from the equity of redemption, which applies in judicial foreclosures like this case. The equity of redemption allows the mortgagor to pay the debt within the redemption period fixed by the court to retain ownership, even after judgment, but not after confirmation of sale.
Proper Party to Move for Execution
Following AFP Mutual Benefit Association, Inc. v. Court of Appeals, only the prevailing party—in this case, spouses Lontoc—has the legal capacity to move for execution of judgment. Spouses Tiglao, as judgment debtors who defaulted, had no personality to file a motion for execution or compel execution in their favor. Therefore, the RTC erred in granting respondents’ motion for execution.
Interest and Costs Under Rule 68 and Rule 142
Although the February 17, 2011 decision did not impose interest due to lack of stipulation, such ruling applied only to contractual interest, not judicial interest on the judgment amount. Under Rule 68 and the Rules of Court, interest and costs must be included in the judgmen
Case Syllabus (G.R. No. 217860)
Background and Procedural History
- The case involves a petition for review on certiorari against the Court of Appeals’ (CA) Decision dated September 10, 2014, and Resolution dated April 6, 2015, which found grave abuse of discretion by the Regional Trial Court (RTC), Branch 153 of Pasig City.
- The RTC issued orders denying the Motion for Issuance of a Writ of Possession filed by respondents spouses Roselie Tiglao and Tomas Tiglao, Jr.
- The controversy originated from a complaint for nullification of a deed of absolute sale filed by spouses Tiglao against spouses Lontoc.
- On December 20, 1999, RTC, Branch 158 declared the deed of absolute sale as an equitable mortgage and allowed spouses Tiglao three months to redeem the property at PHP 300,000.00.
- CA modified the RTC decision on December 17, 2004, affirming the equitable mortgage characterization and the redemption amount but set aside the counterclaim for PHP 1,043,205.00 plus interest.
- Spouses Lontoc’s appeal to the Supreme Court was denied, rendering the CA decision final and executory on January 18, 2006.
- After spouses Tiglao failed to redeem, spouses Lontoc filed a Complaint for judicial foreclosure praying for payment of PHP 300,000 plus 12% interest and attorney’s fees within 90 days or sale of property.
- RTC, Branch 153 rendered a foreclosure decision on February 17, 2011, declaring the property foreclosed but failed to indicate the amount due or period to pay.
- Spouses Tiglao filed a Motion for Execution pointing out the decision’s silence on payment terms and sought a writ of execution ordering them to pay PHP 360,000.00.
- RTC granted the Motion and issued a writ of execution on July 8, 2011, allowing 120 days to pay the amount.
- Spouses Lontoc filed a Motion for Reconsideration or Partial Clarification, which was denied.
- Spouses Tiglao paid PHP 360,000.00 but later filed a Motion for Issuance of a Writ of Possession, which was denied by the RTC. The court recalled the writ of execution and ordered the sale of the property.
- The CA granted the Petition for Certiorari and Mandamus, set aside the RTC orders, and directed the issuance of a writ of possession to spouses Tiglao.
- Spouses Lontoc appealed the CA rulings to the Supreme Court.
Issues Presented
- Whether the CA erred in granting spouses Tiglao the equity of redemption despite their failure to redeem within the three-month period fixed in the RTC decision of 1999 as modified by the CA.
- Whether the February 17, 2011 foreclosure decision complied with Rule 68, Section 2 of the Rules of Court by indicating the amount due and period to pay.
- Whether spouses Tiglao had the right to move for execution and payment of the mortgage obligation.
- Whether the issuance of the writ of execution and the denial of writ of possession by the RTC were proper.
Supreme Court’s Summary of Applicable Law
- Rule 68, Sections 2 and 3 of the Rules of Court govern judicial foreclosures.
- Section 2 requires that a judgment of foreclosure must:
- Ascertain the amount due including mortgage debt, interest, charges, and costs;
- Order the judgment debtor to pay the amount within 90 to 120 days from entry of judgment; and
- Provide that in default of payment, the property shall be sold at public auction.
- Section 3 authorizes sale of the mortgaged property only after the debtor defaults within the specified period and prescribes the procedure for confirmation and issuance of writs of possession.
- Failure to comply with these mandates renders the decision incomplete and inoperative for execution purposes.
- The principle of immutability of judgment prohibits alteration of final judg