G.R. No. 185064 - Spouses Oliva-De Mesa vs. Spouses Acero, Jr.

Case Summary (G.R. No. 185064)

Applicable Law and Procedural Basis

Constitutional framework: 1987 Philippine Constitution (case decision date is 2012, thus the 1987 Constitution governs). Rules and statutes invoked or discussed: Rule 45 of the Rules of Court (petition for review on certiorari), Rule 39 of the Rules of Court (execution procedures), Family Code (Articles 153, 154, 155), Civil Code provisions on judicial and extrajudicial constitution of family home (Articles 225, 229–231, 233, and Articles 240–242 as cited). Jurisprudential authorities cited in the decision are also relied upon in the Court’s reasoning.

Core Facts Regarding Acquisition and Family Home Status

The petitioners purchased the subject lot on April 17, 1984 while cohabiting; they constructed a house and occupied it as their family home beginning January 1987 after they married. In September 1988 Araceli obtained a P100,000 loan from Claudio secured by a mortgage over the property; a check issued in payment was dishonored. Claudio filed a criminal complaint under B.P. Blg. 22 in April 1990, which led to an information and an RTC decision on October 21, 1992 acquitting the petitioners but ordering payment of P100,000 with legal interest.

Execution, Levy, Sale and Transfer of Title

A writ of execution issued March 15, 1993 resulted in levy of the subject property by Sheriff Samonte. The property was sold at public auction March 9, 1994; Claudio was the highest bidder and a certificate of sale issued to him. A Final Deed of Sale was executed March 24, 1995 and the Register of Deeds cancelled the petitioners’ TCT No. T‑76,725 (M) and issued TCT No. T‑221,755 (M) in Claudio’s name on April 4, 1995. Claudio leased the property to the petitioners in February 1995; the petitioners subsequently defaulted on rent obligations.

Ejectment Proceedings and Intermediate Appeals

Claudio and his wife filed an ejectment complaint in the Municipal Trial Court (MTC) of Meycauayan to recover possession. The MTC (July 22, 1999) ruled for the Acero spouses, dismissed the petitioners’ ownership claim, and treated Claudio’s Torrens title as determinative given the petitioners’ failure at that stage to contest the levy, sale, or issuance of the Torrens title. The petitioners appealed to the RTC but their appeal was dismissed for failure to file a memorandum (November 22, 1999); reconsideration was denied (January 31, 2000). A petition for review to the Court of Appeals (CA) ultimately resulted in a December 21, 2006 decision denying relief, which became final on July 25, 2007.

Separate Action to Annul Torrens Title and Lower Court Rulings

Independently, the petitioners filed a complaint in October 1999 in the RTC of Malolos to annul TCT No. T‑221,755 (M) and related documents, asserting the property was a family home exempt from execution under the Family Code. The RTC dismissed the complaint (September 3, 2002), reasoning that even if the property were a family home, a mortgage constituted to secure Araceli’s loan could be levied upon and is not within the exemption; reconsideration was denied (January 14, 2003). The CA affirmed the RTC in a June 6, 2008 decision and denied reconsideration (October 23, 2008). The petitioners filed a Rule 45 petition before the Supreme Court challenging those rulings.

Issues Presented to the Supreme Court

(a) Whether the petitioners are guilty of forum‑shopping for pursuing both the ejectment action and the annulment of title action; and (b) whether the courts below erred in refusing to cancel Claudio’s Torrens title TCT No. T‑221,755 (M), specifically whether the subject property, as a family home, was exempt from execution and whether that exemption could be asserted after levy and sale.

Supreme Court’s Analysis — Forum‑Shopping

The Court reiterated the standard definition of forum‑shopping: instituting multiple actions in different fora that involve the same transactions, essential facts, and issues to obtain conflicting favorable rulings. The Court applied the elements of litis pendentia (identity of parties/interests; identity of rights and reliefs based on same facts; and that a judgment in one case would be res judicata in the other). The Court found no forum‑shopping: although the same parties and overlapping factual evidence appeared in the ejectment and annulment actions, the causes of action and reliefs differed in nature. An ejectment action determines provisional right to possession and is not conclusive of ownership; annulment of title seeks final determination of ownership and nullification of Torrens title. Precedent (e.g., Malabanan v. Rural Bank of Cabuyao, Inc.) was cited to confirm that an ejectment judgment is not res judicata on the title question and therefore the elements of forum‑shopping were not satisfied.

Supreme Court’s Analysis — Family Home Exemption and Timing Requirement

The Court accepted that the subject property became a family residence in January 1987 and thus, by the Family Code’s operation starting August 3, 1988, the residence qualified as a family home by operation of law. The Court summarized the governing rules: (1) residences constituted before August 3, 1988 required judicial or extrajudicial constitution under Civil Code provisions to be exempt from execution; (2) residences constituted after that date are family homes by operation of law and exempt while occupied by any beneficiary; and (3) pre‑existing residences not previously constituted but existing as of August 3, 1988 became entitled prospectively to Family Code protections. Despite recognizing the property’s status as a family home by operation of law, the Court held that the right to exemption from execution is a personal privilege

Case Syllabus (G.R. No. 185064)

Nature of the Petition

Petition for review on certiorari under Rule 45 of the Rules of Court filed by Spouses Araceli Oliva‑De Mesa and Ernesto S. De Mesa (petitioners).
The petition assails the Court of Appeals (CA) Decision dated June 6, 2008 and Resolution dated October 23, 2008 in CA‑G.R. CV No. 79391 (Spouses Araceli Oliva‑De Mesa and Ernesto De Mesa v. Spouses Claudio Acero, Jr., et al.).
Relief sought by the petitioners: cancellation of Transfer Certificate of Title (TCT) No. T‑221755 (M) issued in favor of Claudio D. Acero, Jr. (Claudio) and other attendant reliefs based on alleged nullity of the execution sale because the property is their family home and exempt from execution.

Antecedent Facts — Property, Acquisition and Use

Subject property: parcel located at No. 3 Forbes Street, Mount Carmel Homes Subdivision, Iba, Meycauayan, Bulacan, formerly covered by TCT No. T‑76.725 (M) registered in Araceli’s name.
Petitioners jointly purchased the subject property on April 17, 1984 while cohabiting; they later married (sometime in January 1987) and occupied a house constructed on the property as their family home.
Araceli obtained a loan of P100,000.00 from Claudio in September 1988, secured by a mortgage on the subject property; payment by check was dishonored because the account had been closed.
Petitioners failed to pay Claudio on demand, prompting Claudio to file a complaint for violation of Batas Pambansa Blg. 22 with the Prosecutor’s Office of Malolos, Bulacan; after preliminary investigation, an information was filed with the Regional Trial Court (RTC) of Malolos.
On October 21, 1992, the RTC rendered a Decision acquitting the petitioners of criminal charges but ordering them to pay Claudio P100,000.00 with legal interest from date of demand until fully paid.

Execution, Sale, Transfer and Possession

Writ of execution issued March 15, 1993; Sheriff Felixberto L. Samonte levied upon the subject property.
The subject property was sold at public auction on March 9, 1994; Claudio was the highest bidder and a certificate of sale was issued to him.
On March 24, 1995, a Final Deed of Sale over the subject property was executed in favor of Claudio; on April 4, 1995, the Register of Deeds of Meycauayan cancelled TCT No. T‑76.725 (M) and issued TCT No. T‑221755 (M) in Claudio’s name.
Sometime in February 1995, Claudio leased the subject property to the petitioners and one Juanito Oliva (Juanito) for monthly rent of P5,500.00; petitioners and Juanito defaulted and by October 3, 1998 their arrears totaled P170,500.00.

Parallel and Subsequent Litigation — Ejectment and Annulment of Title Actions

Spouses Claudio and Ma. Rufina Acero (collectively Spouses Acero) filed ejectment complaint with the Municipal Trial Court (MTC) of Meycauayan, Bulacan against petitioners and Juanito for unlawful detainer.
Petitioners defended by asserting they were lawful owners and not mere lessees; they contended Spouses Acero had no right to evict them.
MTC Decision dated July 22, 1999: gave due course to Spouses Acero’s complaint, dismissed petitioners’ ownership claim and ordered petitioners and Juanito to vacate; MTC found title belonged to Claudio as evidenced by TCT No. T‑221755 (M) and noted petitioners never assailed the levy, sale regularity or legitimacy of Claudio’s Torrens title up to filing of ejectment complaint.
Petitioners appealed to the RTC; appeal dismissed November 22, 1999 for failure to submit Memorandum; reconsideration denied January 31, 2000.
Petitioners filed petition for review with the CA challenging the RTC decisions; CA denied the petition in a Decision dated December 21, 2006, which became final on July 25, 2007.

Separate Action to Nullify Torrens Title — RTC and CA Determinations

On October 29, 1999, petitioners filed with the RTC of Malolos a complaint to nullify TCT No. T‑221755 (M) and other documents, asserting the subject property is a family home exempt from execution under the Family Code.
RTC Decision dated September 3, 2002 dismissed petitioners’ complaint, ruling that even assuming the property was a family home, the exemption did not apply because a mortgage had been constituted over the property to secure Araceli’s loan and it was levied upon as payment therefor; cited Article 155(3) of the Family Code.
Reconsideration denied by RTC in Resolution dated January 14, 2003.
On appeal, CA affirmed the RTC in a Decision dated June 6, 2008; petitioners’ motion for reconsideration denied by CA Resolution dated October 23, 2008.
Petitioners filed the present petition for review to the Supreme Court challenging the CA’s June 6, 2008 Decision and October 23, 2008 Resolution.

Issues Presented to the Supreme Court

(a) Wh