G.R. No.

L-59266 February 29, 1988

SILVESTRE DIGNOS and ISABEL LUMUNGSOD, petitioners,

vs.
HON. COURT OF APPEALS and ATILANO G. JABIL, respondents.

BIDIN, J.:

This is a petition for review on certiorari seeking the reversal of the: (1) Decision * of the
9th Division, Court of Appeals dated July 31,1981, affirming with modification the
Decision, dated August 25, 1972 of the Court of First Instance ** of Cebu in civil Case
No. 23-L entitled Atilano G. Jabil vs. Silvestre T. Dignos and Isabela Lumungsod de
Dignos and Panfilo Jabalde, as Attorney-in-Fact of Luciano Cabigas and Jovita L. de
Cabigas; and (2) its Resolution dated December 16, 1981, denying defendant-
appellant's (Petitioner's) motion for reconsideration, for lack of merit.

The undisputed facts as found by the Court of Appeals are as follows:

The Dignos spouses were owners of a parcel of land, known as Lot No.
3453, of the cadastral survey of Opon, Lapu-Lapu City. On June 7, 1965,
appellants (petitioners) Dignos spouses sold the said parcel of land to
plaintiff-appellant (respondent Atilano J. Jabil) for the sum of P28,000.00,
payable in two installments, with an assumption of indebtedness with the
First Insular Bank of Cebu in the sum of P12,000.00, which was paid and
acknowledged by the vendors in the deed of sale (Exh. C) executed in
favor of plaintiff-appellant, and the next installment in the sum of
P4,000.00 to be paid on or before September 15, 1965.

On November 25, 1965, the Dignos spouses sold the same land in favor
of defendants spouses, Luciano Cabigas and Jovita L. De Cabigas, who
were then U.S. citizens, for the price of P35,000.00. A deed of absolute
sale (Exh. J, also marked Exh. 3) was executed by the Dignos spouses in
favor of the Cabigas spouses, and which was registered in the Office of
the Register of Deeds pursuant to the provisions of Act No. 3344.

As the Dignos spouses refused to accept from plaintiff-appellant the

balance of the purchase price of the land, and as plaintiff- appellant
discovered the second sale made by defendants-appellants to the
Cabigas spouses, plaintiff-appellant brought the present suit. (Rollo, pp.
27-28)

After due trial, the Court of first Instance of Cebu rendered its Decision on August
25,1972, the decretal portion of which reads:
 WHEREFORE, the Court hereby declares the deed of sale executed on
November 25, 1965 by defendant Isabela L. de Dignos in favor of
defendant Luciano Cabigas, a citizen of the United States of America, null
and void ab initio, and the deed of sale executed by defendants Silvestre
T. Dignos and Isabela Lumungsod de Dignos not rescinded.
Consequently, the plaintiff Atilano G. Jabil is hereby ordered to pay the
sum, of Sixteen Thousand Pesos (P16,000.00) to the defendants-spouses
upon the execution of the Deed of absolute Sale of Lot No. 3453, Opon
Cadastre and when the decision of this case becomes final and executory.

The plaintiff Atilano G. Jabil is ordered to reimburse the defendants

Luciano Cabigas and Jovita L. de Cabigas, through their attorney-in-fact,
Panfilo Jabalde, reasonable amount corresponding to the expenses or
costs of the hollow block fence, so far constructed.

It is further ordered that defendants-spouses Silvestre T. Dignos and

Isabela Lumungsod de Dignos should return to defendants-spouses
Luciano Cabigas and Jovita L. de Cabigas the sum of P35,000.00, as
equity demands that nobody shall enrich himself at the expense of
another.

The writ of preliminary injunction issued on September 23, 1966,

automatically becomes permanent in virtue of this decision.

With costs against the defendants.

From the foregoing, the plaintiff (respondent herein) and defendants-spouss (petitioners
herein) appealed to the Court of Appeals, which appeal was docketed therein as CA-
G.R. No. 54393-R, "Atilano G. Jabil v. Silvestre T. Dignos, et al."

On July 31, 1981, the Court of Appeals affirmed the decision of the lower court except
as to the portion ordering Jabil to pay for the expenses incurred by the Cabigas spouses
for the building of a fence upon the land in question. The disposive portion of said
decision of the Court of Appeals reads:

IN VIEW OF THE FOREGOING CONSIDERATIONS, except as to the

modification of the judgment as pertains to plaintiff-appellant above
indicated, the judgment appealed from is hereby AFFIRMED in all other
respects.

With costs against defendants-appellants.

SO ORDERED.

Judgment MODIFIED.
A motion for reconsideration of said decision was filed by the defendants- appellants
(petitioners) Dignos spouses, but on December 16, 1981, a resolution was issued by
the Court of Appeals denying the motion for lack of merit.

Hence, this petition.

In the resolution of February 10, 1982, the Second Division of this Court denied the
petition for lack of merit. A motion for reconsideration of said resolution was filed on
March 16, 1982. In the resolution dated April 26,1982, respondents were required to
comment thereon, which comment was filed on May 11, 1982 and a reply thereto was
filed on July 26, 1982 in compliance with the resolution of June 16,1 982. On August
9,1982, acting on the motion for reconsideration and on all subsequent pleadings filed,
this Court resolved to reconsider its resolution of February 10, 1982 and to give due
course to the instant petition. On September 6, 1982, respondents filed a rejoinder to
reply of petitioners which was noted on the resolution of September 20, 1982.

Petitioners raised the following assignment of errors:

THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW IN GROSSLY,

INCORRECTLY INTERPRETING THE TERMS OF THE CONTRACT, EXHIBIT C,
HOLDING IT AS AN ABSOLUTE SALE, EFFECTIVE TO TRANSFER OWNERSHIP
OVER THE PROPERTY IN QUESTION TO THE RESPONDENT AND NOT MERELY A
CONTRACT TO SELL OR PROMISE TO SELL; THE COURT ALSO ERRED IN
MISAPPLYING ARTICLE 1371 AS WARRANTING READING OF THE AGREEMENT,
EXHIBIT C, AS ONE OF ABSOLUTE SALE, DESPITE THE CLARITY OF THE TERMS
THEREOF SHOWING IT IS A CONTRACT OF PROMISE TO SELL.

II

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN INCORRECTLY

APPLYING AND OR IN MISAPPLYING ARTICLE 1592 OF THE NEW CIVIL CODE AS
WARRANTING THE ERRONEOUS CONCLUSION THAT THE NOTICE OF
RESCISSION, EXHIBIT G, IS INEFFECTIVE SINCE IT HAS NOT BEEN JUDICIALLY
DEMANDED NOR IS IT A NOTARIAL ACT.

III

THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN REJECTING THE

APPLICABILITY OF ARTICLES 2208,2217 and 2219 OF THE NEW CIVIL CODE AND
ESTABLISHED JURISPRUDENCE AS TO WARRANT THE AWARD OF DAMAGES
AND ATTORNEY'S FEES TO PETITIONERS.

IV
PLAINTIFF'S COMPLAINT FOR SPECIFIC PERFORMANCE SHOULD HAVE BEEN
DISMISSED, HE HAVING COME TO COURT WITH UNCLEAN HANDS.

BY AND LARGE, THE COURT OF APPEALS COMMITTED AN ERROR IN

AFFIRMING WITH MODIFICATION THE DECISION OF THE TRIAL COURT DUE TO
GRAVE MISINTERPRETATION, MISAPPLICATION AND MISAPPREHENSION OF
THE TERMS OF THE QUESTIONED CONTRACT AND THE LAW APPLICABLE
THERETO.

The foregoing assignment of errors may be synthesized into two main issues, to wit:

I. Whether or not subject contract is a deed of absolute sale or a contract

Lot sell.

II. Whether or not there was a valid rescission thereof.

There is no merit in this petition.

It is significant to note that this petition was denied by the Second Division of this Court
in its Resolution dated February 1 0, 1 982 for lack of merit, but on motion for
reconsideration and on the basis of all subsequent pleadings filed, the petition was
given due course.

I.

The contract in question (Exhibit C) is a Deed of Sale, with the following conditions:

1. That Atilano G..Jabilis to pay the amount of Twelve Thousand Pesos

P12,000.00) Phil. Philippine Currency as advance payment;

2. That Atilano G. Jabil is to assume the balance of Twelve Thousand

Pesos (P12,000.00) Loan from the First Insular Bank of Cebu;

3. That Atilano G. Jabil is to pay the said spouses the balance of Four.
Thousand Pesos (P4,000.00) on or before September 15,1965;

4. That the said spouses agrees to defend the said Atilano G. Jabil from
other claims on the said property;

5. That the spouses agrees to sign a final deed of absolute sale in favor of
Atilano G. Jabil over the above-mentioned property upon the payment of
the balance of Four Thousand Pesos. (Original Record, pp. 10-11)
In their motion for reconsideration, petitioners reiterated their contention that the Deed
of Sale (Exhibit "C") is a mere contract to sell and not an absolute sale; that the same is
subject to two (2) positive suspensive conditions, namely: the payment of the balance of
P4,000.00 on or before September 15,1965 and the immediate assumption of the
mortgage of P12,000.00 with the First Insular Bank of Cebu. It is further contended that
in said contract, title or ownership over the property was expressly reserved in the
vendor, the Dignos spouses until the suspensive condition of full and punctual payment
of the balance of the purchase price shall have been met. So that there is no actual sale
until full payment is made (Rollo, pp. 51-52).

In bolstering their contention that Exhibit "C" is merely a contract to sell, petitioners aver
that there is absolutely nothing in Exhibit "C" that indicates that the vendors thereby sell,
convey or transfer their ownership to the alleged vendee. Petitioners insist that Exhibit
"C" (or 6) is a private instrument and the absence of a formal deed of conveyance is a
very strong indication that the parties did not intend "transfer of ownership and title but
only a transfer after full payment" (Rollo, p. 52). Moreover, petitioners anchored their
contention on the very terms and conditions of the contract, more particularly paragraph
four which reads, "that said spouses has agreed to sell the herein mentioned property to
Atilano G. Jabil ..." and condition number five which reads, "that the spouses agrees to
sign a final deed of absolute sale over the mentioned property upon the payment of the
balance of four thousand pesos."

Such contention is untenable.

By and large, the issues in this case have already been settled by this Court in
analogous cases.

Thus, it has been held that a deed of sale is absolute in nature although denominated
as a "Deed of Conditional Sale" where nowhere in the contract in question is a proviso
or stipulation to the effect that title to the property sold is reserved in the vendor until full
payment of the purchase price, nor is there a stipulation giving the vendor the right to
unilaterally rescind the contract the moment the vendee fails to pay within a fixed period
Taguba v. Vda. de Leon, 132 SCRA 722; Luzon Brokerage Co., Inc. v. Maritime
Building Co., Inc., 86 SCRA 305).

A careful examination of the contract shows that there is no such stipulation reserving
the title of the property on the vendors nor does it give them the right to unilaterally
rescind the contract upon non-payment of the balance thereof within a fixed period.

On the contrary, all the elements of a valid contract of sale under Article 1458 of the
Civil Code, are present, such as: (1) consent or meeting of the minds; (2) determinate
subject matter; and (3) price certain in money or its equivalent. In addition, Article 1477
of the same Code provides that "The ownership of the thing sold shall be transferred to
the vendee upon actual or constructive delivery thereof." As applied in the case of
Froilan v. Pan Oriental Shipping Co., et al. (12 SCRA 276), this Court held that in the
absence of stipulation to the contrary, the ownership of the thing sold passes to the
vendee upon actual or constructive delivery thereof.

While it may be conceded that there was no constructive delivery of the land sold in the
case at bar, as subject Deed of Sale is a private instrument, it is beyond question that
there was actual delivery thereof. As found by the trial court, the Dignos spouses
delivered the possession of the land in question to Jabil as early as March 27,1965 so
that the latter constructed thereon Sally's Beach Resort also known as Jabil's Beach
Resort in March, 1965; Mactan White Beach Resort on January 15,1966 and Bevirlyn's
Beach Resort on September 1, 1965. Such facts were admitted by petitioner spouses
(Decision, Civil Case No. 23-L; Record on Appeal, p. 108).

Moreover, the Court of Appeals in its resolution dated December 16,1981 found that the
acts of petitioners, contemporaneous with the contract, clearly show that an absolute
deed of sale was intended by the parties and not a contract to sell.

Be that as it may, it is evident that when petitioners sold said land to the Cabigas
spouses, they were no longer owners of the same and the sale is null and void.

II.

Petitioners claim that when they sold the land to the Cabigas spouses, the contract of
sale was already rescinded.

Applying the rationale of the case of Taguba v. Vda. de Leon (supra) which is on all
fours with the case at bar, the contract of sale being absolute in nature is governed by
Article 1592 of the Civil Code. It is undisputed that petitioners never notified private
respondents Jabil by notarial act that they were rescinding the contract, and neither did
they file a suit in court to rescind the sale. The most that they were able to show is a
letter of Cipriano Amistad who, claiming to be an emissary of Jabil, informed the Dignos
spouses not to go to the house of Jabil because the latter had no money and further
advised petitioners to sell the land in litigation to another party (Record on Appeal, p.
23). As correctly found by the Court of Appeals, there is no showing that Amistad was
properly authorized by Jabil to make such extra-judicial rescission for the latter who, on
the contrary, vigorously denied having sent Amistad to tell petitioners that he was
already waiving his rights to the land in question. Under Article 1358 of the Civil Code, it
is required that acts and contracts which have for their object the extinguishment of real
rights over immovable property must appear in a public document.

Petitioners laid considerable emphasis on the fact that private respondent Jabil had no
money on the stipulated date of payment on September 15,1965 and was able to raise
the necessary amount only by mid-October 1965.

It has been ruled, however, that "where time is not of the essence of the agreement, a
slight delay on the part of one party in the performance of his obligation is not a
sufficient ground for the rescission of the agreement" (Taguba v. Vda. de Leon, supra).
Considering that private respondent has only a balance of P4,000.00 and was delayed
in payment only for one month, equity and justice mandate as in the aforecited case that
Jabil be given an additional period within which to complete payment of the purchase
price.

WHEREFORE, the petition filed is hereby Dismissed for lack of merit and the assailed
decision of the Court of Appeals is Affirmed in toto.

SO ORDERED.

G.R. No. 156364 September 3, 2007

JACOBUS BERNHARD HULST, petitioner,

vs.
PR BUILDERS, INC., respondent.

DECISION

AUSTRIA-MARTINEZ, J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the Revised Rules of
Court assailing the Decision1 dated October 30, 2002 of the Court of Appeals (CA) in CA-G.R.
SP No. 60981.

The facts:

Jacobus Bernhard Hulst (petitioner) and his spouse Ida Johanna Hulst-Van Ijzeren (Ida), Dutch
nationals, entered into a Contract to Sell with PR Builders, Inc. (respondent), for the purchase of
a 210-sq m residential unit in respondent's townhouse project in Barangay Niyugan, Laurel,
Batangas.

When respondent failed to comply with its verbal promise to complete the project by June 1995,
the spouses Hulst filed before the Housing and Land Use Regulatory Board (HLURB) a
complaint for rescission of contract with interest, damages and attorney's fees, docketed as
HLRB Case No. IV6-071196-0618.

On April 22, 1997, HLURB Arbiter Ma. Perpetua Y. Aquino (HLURB Arbiter) rendered a
Decision2 in favor of spouses Hulst, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the

complainant, rescinding the Contract to Sell and ordering respondent to:

1) Reimburse complainant the sum of P3,187,500.00, representing the purchase price

paid by the complainants to P.R. Builders, plus interest thereon at the rate of twelve
percent (12%) per annum from the time complaint was filed;
 2) Pay complainant the sum of P297,000.00 as actual damages;

3) Pay complainant the sum of P100,000.00 by way of moral damages;

4) Pay complainant the sum of P150,000.00 as exemplary damages;

5) P50,000.00 as attorney's fees and for other litigation expenses; and

6) Cost of suit.

SO ORDERED.3

Meanwhile, spouses Hulst divorced. Ida assigned her rights over the purchased property to
petitioner.4 From then on, petitioner alone pursued the case.

On August 21, 1997, the HLURB Arbiter issued a Writ of Execution addressed to the Ex-Officio
Sheriff of the Regional Trial Court of Tanauan, Batangas directing the latter to execute its
judgment.5

On April 13, 1998, the Ex-Officio Sheriff proceeded to implement the Writ of Execution.
However, upon complaint of respondent with the CA on a Petition for Certiorari and
Prohibition, the levy made by the Sheriff was set aside, requiring the Sheriff to levy first on
respondent's personal properties.6 Sheriff Jaime B. Ozaeta (Sheriff) tried to implement the writ as
directed but the writ was returned unsatisfied.7

On January 26, 1999, upon petitioner's motion, the HLURB Arbiter issued an Alias Writ of
Execution.8

On March 23, 1999, the Sheriff levied on respondent's 15 parcels of land covered by 13 Transfer
Certificates of Title (TCT)9 in Barangay Niyugan, Laurel, Batangas.10

In a Notice of Sale dated March 27, 2000, the Sheriff set the public auction of the levied
properties on April 28, 2000 at 10:00 a.m..11

Two days before the scheduled public auction or on April 26, 2000, respondent filed an Urgent
Motion to Quash Writ of Levy with the HLURB on the ground that the Sheriff made an overlevy
since the aggregate appraised value of the levied properties at P6,500.00 per sq m is
P83,616,000.00, based on the Appraisal Report12 of Henry Hunter Bayne Co., Inc. dated
December 11, 1996, which is over and above the judgment award. 13

At 10:15 a.m. of the scheduled auction date of April 28, 2000, respondent's counsel objected to
the conduct of the public auction on the ground that respondent's Urgent Motion to Quash Writ
of Levy was pending resolution. Absent any restraining order from the HLURB, the Sheriff
proceeded to sell the 15 parcels of land. Holly Properties Realty Corporation was the winning
bidder for all 15 parcels of land for the total amount of P5,450,653.33. The sum of
P5,313,040.00 was turned over to the petitioner in satisfaction of the judgment award after
deducting the legal fees.14

At 4:15 p.m. of the same day, while the Sheriff was at the HLURB office to remit the legal fees
relative to the auction sale and to submit the Certificates of Sale 15 for the signature of HLURB
Director Belen G. Ceniza (HLURB Director), he received the Order dated April 28, 2000 issued
by the HLURB Arbiter to suspend the proceedings on the matter.16

Four months later, or on August 28, 2000, the HLURB Arbiter and HLURB Director issued an
Order setting aside the sheriff's levy on respondent's real properties,17 reasoning as follows:

While we are not making a ruling that the fair market value of the levied properties is
PhP6,500.00 per square meter (or an aggregate value of PhP83,616,000.00) as indicated
in the Hunter Baynes Appraisal Report, we definitely cannot agree with the position of
the Complainants and the Sheriff that the aggregate value of the 12,864.00-square meter
levied properties is only around PhP6,000,000.00. The disparity between the two
valuations are [sic] so egregious that the Sheriff should have looked into the matter first
before proceeding with the execution sale of the said properties, especially when the
auction sale proceedings was seasonably objected by Respondent's counsel, Atty. Noel
Mingoa. However, instead of resolving first the objection timely posed by Atty. Mingoa,
Sheriff Ozaete totally disregarded the objection raised and, posthaste, issued the
corresponding Certificate of Sale even prior to the payment of the legal fees (pars. 7 & 8,
Sheriff's Return).

While we agree with the Complainants that what is material in an execution sale
proceeding is the amount for which the properties were bidded and sold during the public
auction and that, mere inadequacy of the price is not a sufficient ground to annul the sale,
the court is justified to intervene where the inadequacy of the price shocks the conscience
(Barrozo vs. Macaraeg, 83 Phil. 378). The difference between PhP83,616,000.00 and
Php6,000,000.00 is PhP77,616,000.00 and it definitely invites our attention to look into
the proceedings had especially so when there was only one bidder, the HOLLY
PROPERTIES REALTY CORPORATION represented by Ma, Chandra Cacho (par. 7,
Sheriff's Return) and the auction sale proceedings was timely objected by Respondent's
counsel (par. 6, Sheriff's Return) due to the pendency of the Urgent Motion to Quash the
Writ of Levy which was filed prior to the execution sale.

Besides, what is at issue is not the value of the subject properties as determined
during the auction sale, but the determination of the value of the properties levied
upon by the Sheriff taking into consideration Section 9(b) of the 1997 Rules of Civil
Procedure x x x.

xxxx

It is very clear from the foregoing that, even during levy, the Sheriff has to consider the
fair market value of the properties levied upon to determine whether they are sufficient to
 satisfy the judgment, and any levy in excess of the judgment award is void (Buan v.
Court of Appeals, 235 SCRA 424).

x x x x18 (Emphasis supplied).

The dispositive portion of the Order reads:

WHEREFORE, the levy on the subject properties made by the Ex-Officio Sheriff of the
RTC of Tanauan, Batangas, is hereby SET ASIDE and the said Sheriff is hereby directed
to levy instead Respondent's real properties that are reasonably sufficient to enforce its
final and executory judgment, this time, taking into consideration not only the value of
the properties as indicated in their respective tax declarations, but also all the other
determinants at arriving at a fair market value, namely: the cost of acquisition, the current
value of like properties, its actual or potential uses, and in the particular case of lands,
their size, shape or location, and the tax declarations thereon.

SO ORDERED.19

A motion for reconsideration being a prohibited pleading under Section 1(h), Rule IV of the
1996 HLURB Rules and Procedure, petitioner filed a Petition for Certiorari and Prohibition with
the CA on September 27, 2000.

On October 30, 2002, the CA rendered herein assailed Decision20 dismissing the petition. The
CA held that petitioner's insistence that Barrozo v. Macaraeg21 does not apply since said case
stated that "when there is a right to redeem inadequacy of price should not be material" holds no
water as what is obtaining in this case is not "mere inadequacy," but an inadequacy that shocks
the senses; that Buan v. Court of Appeals22 properly applies since the questioned levy covered 15
parcels of land posited to have an aggregate value of P83,616,000.00 which shockingly exceeded
the judgment debt of only around P6,000,000.00.

Without filing a motion for reconsideration,23 petitioner took the present recourse on the sole
ground that:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE

ARBITER'S ORDER SETTING ASIDE THE LEVY MADE BY THE SHERIFF ON
THE SUBJECT PROPERTIES.24

Before resolving the question whether the CA erred in affirming the Order of the HLURB setting
aside the levy made by the sheriff, it behooves this Court to address a matter of public and
national importance which completely escaped the attention of the HLURB Arbiter and the CA:
petitioner and his wife are foreign nationals who are disqualified under the Constitution from
owning real property in their names.

Section 7 of Article XII of the 1987 Constitution provides:

 Sec. 7. Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or
hold lands of the public domain. (Emphasis supplied).

The capacity to acquire private land is made dependent upon the capacity to acquire or hold
lands of the public domain. Private land may be transferred or conveyed only to individuals or
entities "qualified to acquire lands of the public domain." The 1987 Constitution reserved the
right to participate in the disposition, exploitation, development and utilization of lands of the
public domain for Filipino citizens25 or corporations at least 60 percent of the capital of which is
owned by Filipinos.26 Aliens, whether individuals or corporations, have been disqualified from
acquiring public lands; hence, they have also been disqualified from acquiring private lands. 27

Since petitioner and his wife, being Dutch nationals, are proscribed under the Constitution from
acquiring and owning real property, it is unequivocal that the Contract to Sell entered into by
petitioner together with his wife and respondent is void. Under Article 1409 (1) and (7) of the
Civil Code, all contracts whose cause, object or purpose is contrary to law or public policy and
those expressly prohibited or declared void by law are inexistent and void from the beginning.
Article 1410 of the same Code provides that the action or defense for the declaration of the
inexistence of a contract does not prescribe. A void contract is equivalent to nothing; it produces
no civil effect.28 It does not create, modify or extinguish a juridical relation. 29

Generally, parties to a void agreement cannot expect the aid of the law; the courts leave them as
they are, because they are deemed in pari delicto or "in equal fault."30 In pari delicto is "a
universal doctrine which holds that no action arises, in equity or at law, from an illegal contract;
no suit can be maintained for its specific performance, or to recover the property agreed to be
sold or delivered, or the money agreed to be paid, or damages for its violation; and where the
parties are in pari delicto, no affirmative relief of any kind will be given to one against the
other."31

This rule, however, is subject to exceptions32 that permit the return of that which may have been
given under a void contract to: (a) the innocent party (Arts. 1411-1412, Civil Code);33 (b) the
debtor who pays usurious interest (Art. 1413, Civil Code);34 (c) the party repudiating the void
contract before the illegal purpose is accomplished or before damage is caused to a third
person and if public interest is subserved by allowing recovery (Art. 1414, Civil Code); 35 (d)
the incapacitated party if the interest of justice so demands (Art. 1415, Civil Code);36 (e) the
party for whose protection the prohibition by law is intended if the agreement is not illegal per se
but merely prohibited and if public policy would be enhanced by permitting recovery (Art. 1416,
Civil Code);37 and (f) the party for whose benefit the law has been intended such as in price
ceiling laws (Art. 1417, Civil Code)38 and labor laws (Arts. 1418-1419, Civil Code).39

It is significant to note that the agreement executed by the parties in this case is a Contract to Sell
and not a contract of sale. A distinction between the two is material in the determination of when
ownership is deemed to have been transferred to the buyer or vendee and, ultimately, the
resolution of the question on whether the constitutional proscription has been breached.
In a contract of sale, the title passes to the buyer upon the delivery of the thing sold. The vendor
has lost and cannot recover the ownership of the property until and unless the contract of sale is
itself resolved and set aside.40 On the other hand, a contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the vendor's obligation to transfer title is subordinated
to the happening of a future and uncertain event, so that if the suspensive condition does not take
place, the parties would stand as if the conditional obligation had never existed. 41 In other words,
in a contract to sell, the prospective seller agrees to transfer ownership of the property to the
buyer upon the happening of an event, which normally is the full payment of the purchase price.
But even upon the fulfillment of the suspensive condition, ownership does not automatically
transfer to the buyer. The prospective seller still has to convey title to the prospective buyer by
executing a contract of absolute sale.42

Since the contract involved here is a Contract to Sell, ownership has not yet transferred to the
petitioner when he filed the suit for rescission. While the intent to circumvent the constitutional
proscription on aliens owning real property was evident by virtue of the execution of the
Contract to Sell, such violation of the law did not materialize because petitioner caused the
rescission of the contract before the execution of the final deed transferring ownership.

Thus, exception (c) finds application in this case. Under Article 1414, one who repudiates the
agreement and demands his money before the illegal act has taken place is entitled to recover.
Petitioner is therefore entitled to recover what he has paid, although the basis of his claim for
rescission, which was granted by the HLURB, was not the fact that he is not allowed to acquire
private land under the Philippine Constitution. But petitioner is entitled to the recovery only of
the amount of P3,187,500.00, representing the purchase price paid to respondent. No damages
may be recovered on the basis of a void contract; being nonexistent, the agreement produces no
juridical tie between the parties involved.43 Further, petitioner is not entitled to actual as well as
interests thereon,44 moral and exemplary damages and attorney's fees.

The Court takes into consideration the fact that the HLURB Decision dated April 22, 1997 has
long been final and executory. Nothing is more settled in the law than that a decision that has
acquired finality becomes immutable and unalterable and may no longer be modified in any
respect even if the modification is meant to correct erroneous conclusions of fact or law and
whether it was made by the court that rendered it or by the highest court of the land. 45 The only
recognized exceptions to the general rule are the correction of clerical errors, the so-called nunc
pro tunc entries which cause no prejudice to any party, void judgments, and whenever
circumstances transpire after the finality of the decision rendering its execution unjust and
inequitable.46 None of the exceptions is present in this case. The HLURB decision cannot be
considered a void judgment, as it was rendered by a tribunal with jurisdiction over the subject
matter of the complaint.47

Ineluctably, the HLURB Decision resulted in the unjust enrichment of petitioner at the expense
of respondent. Petitioner received more than what he is entitled to recover under the
circumstances.

Article 22 of the Civil Code which embodies the maxim, nemo ex alterius incommode debet
lecupletari (no man ought to be made rich out of another's injury), states:
 Art. 22. Every person who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the latter without just or
legal ground, shall return the same to him.

The above-quoted article is part of the chapter of the Civil Code on Human Relations, the
provisions of which were formulated as basic principles to be observed for the rightful
relationship between human beings and for the stability of the social order; designed to indicate
certain norms that spring from the fountain of good conscience; guides for human conduct that
should run as golden threads through society to the end that law may approach its supreme ideal
which is the sway and dominance of justice.48 There is unjust enrichment when a person unjustly
retains a benefit at the loss of another, or when a person retains money or property of another
against the fundamental principles of justice, equity and good conscience.49

A sense of justice and fairness demands that petitioner should not be allowed to benefit from his
act of entering into a contract to sell that violates the constitutional proscription.

This is not a case of equity overruling or supplanting a positive provision of law or judicial rule.
Rather, equity is exercised in this case "as the complement of legal jurisdiction [that] seeks to
reach and to complete justice where courts of law, through the inflexibility of their rules and
want of power to adapt their judgments to the special circumstances of cases, are incompetent to
do so."50

The purpose of the exercise of equity jurisdiction in this case is to prevent unjust enrichment and
to ensure restitution. Equity jurisdiction aims to do complete justice in cases where a court of law
is unable to adapt its judgments to the special circumstances of a case because of the inflexibility
of its statutory or legal jurisdiction.51

The sheriff delivered to petitioner the amount of P5,313,040.00 representing the net proceeds
(bidded amount is P5,450,653.33) of the auction sale after deducting the legal fees in the amount
of P137,613.33.52 Petitioner is only entitled to P3,187,500.00, the amount of the purchase price
of the real property paid by petitioner to respondent under the Contract to Sell. Thus, the Court in
the exercise of its equity jurisdiction may validly order petitioner to return the excess amount of
P2,125,540.00.

The Court shall now proceed to resolve the single issue raised in the present petition: whether the
CA seriously erred in affirming the HLURB Order setting aside the levy made by the Sheriff on
the subject properties.

Petitioner avers that the HLURB Arbiter and Director had no factual basis for pegging the fair
market value of the levied properties at P6,500.00 per sq m or P83,616,000.00; that reliance on
the appraisal report was misplaced since the appraisal was based on the value of land in
neighboring developed subdivisions and on the assumption that the residential unit appraised had
already been built; that the Sheriff need not determine the fair market value of the subject
properties before levying on the same since what is material is the amount for which the
properties were bidded and sold during the public auction; that the pendency of any motion is not
a valid ground for the Sheriff to suspend the execution proceedings and, by itself, does not have
the effect of restraining the Sheriff from proceeding with the execution.

Respondent, on the other hand, contends that while it is true that the HLURB Arbiter and
Director did not categorically state the exact value of the levied properties, said properties cannot
just amount to P6,000,000.00; that the HLURB Arbiter and Director correctly held that the value
indicated in the tax declaration is not the sole determinant of the value of the property.

The petition is impressed with merit.

If the judgment is for money, the sheriff or other authorized officer must execute the same
pursuant to the provisions of Section 9, Rule 39 of the Revised Rules of Court, viz:

Sec. 9. Execution of judgments for money, how enforced. –

(a) Immediate payment on demand. - The officer shall enforce an execution of a judgment
for money by demanding from the judgment obligor the immediate payment of the full
amount stated in the writ of execution and all lawful fees. x x x

(b) Satisfaction by levy. - If the judgment obligor cannot pay all or part of the obligation
in cash, certified bank check or other mode of payment acceptable to the judgment
obligee, the officer shall levy upon the properties of the judgment obligor of every
kind and nature whatsoever which may be disposed of for value and not otherwise
exempt from execution, giving the latter the option to immediately choose which
property or part thereof may be levied upon, sufficient to satisfy the judgment. If the
judgment obligor does not exercise the option, the officer shall first levy on the personal
properties, if any, and then on the real properties if the personal properties are insufficient
to answer for the judgment.

The sheriff shall sell only a sufficient portion of the personal or real property of the
judgment obligor which has been levied upon.

When there is more property of the judgment obligor than is sufficient to satisfy the
judgment and lawful fees, he must sell only so much of the personal or real property
as is sufficient to satisfy the judgment and lawful fees.

Real property, stocks, shares, debts, credits, and other personal property, or any interest
in either real or personal property, may be levied upon in like manner and with like
effect as under a writ of attachment (Emphasis supplied).53

Thus, under Rule 39, in executing a money judgment against the property of the judgment
debtor, the sheriff shall levy on all property belonging to the judgment debtor as is amply
sufficient to satisfy the judgment and costs, and sell the same paying to the judgment creditor so
much of the proceeds as will satisfy the amount of the judgment debt and costs. Any excess in
the proceeds shall be delivered to the judgment debtor unless otherwise directed by the judgment
or order of the court.54
Clearly, there are two stages in the execution of money judgments. First, the levy and then the
execution sale.

Levy has been defined as the act or acts by which an officer sets apart or appropriates a part or
the whole of a judgment debtor's property for the purpose of satisfying the command of the writ
of execution.55 The object of a levy is to take property into the custody of the law, and thereby
render it liable to the lien of the execution, and put it out of the power of the judgment debtor to
divert it to any other use or purpose.56

On the other hand, an execution sale is a sale by a sheriff or other ministerial officer under the
authority of a writ of execution of the levied property of the debtor.57

In the present case, the HLURB Arbiter and Director gravely abused their discretion in setting
aside the levy conducted by the Sheriff for the reason that the auction sale conducted by the
sheriff rendered moot and academic the motion to quash the levy. The HLURB Arbiter lost
jurisdiction to act on the motion to quash the levy by virtue of the consummation of the auction
sale. Absent any order from the HLURB suspending the auction sale, the sheriff rightfully
proceeded with the auction sale. The winning bidder had already paid the winning bid. The legal
fees had already been remitted to the HLURB. The judgment award had already been turned over
to the judgment creditor. What was left to be done was only the issuance of the corresponding
certificates of sale to the winning bidder. In fact, only the signature of the HLURB Director for
that purpose was needed58 – a purely ministerial act.

A purely ministerial act or duty is one which an officer or tribunal performs in a given state of
facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regard for
or the exercise of his own judgment upon the propriety or impropriety of the act done. If the law
imposes a duty upon a public officer and gives him the right to decide how or when the duty
shall be performed, such duty is discretionary and not ministerial. The duty is ministerial only
when the discharge of the same requires neither the exercise of official discretion nor
judgment.59 In the present case, all the requirements of auction sale under the Rules have been
fully complied with to warrant the issuance of the corresponding certificates of sale.

And even if the Court should go into the merits of the assailed Order, the petition is meritorious
on the following grounds:

Firstly, the reliance of the HLURB Arbiter and Director, as well as the CA, on Barrozo v.
Macaraeg60 and Buan v. Court of Appeals61 is misplaced.

The HLURB and the CA misconstrued the Court's pronouncements in Barrozo. Barrozo
involved a judgment debtor who wanted to repurchase properties sold at execution beyond the
one-year redemption period. The statement of the Court in Barrozo, that "only where such
inadequacy shocks the conscience the courts will intervene," is at best a mere obiter dictum. This
declaration should be taken in the context of the other declarations of the Court in Barrozo, to
wit:
 Another point raised by appellant is that the price paid at the auction sale was so
inadequate as to shock the conscience of the court. Supposing that this issue is open even
after the one-year period has expired and after the properties have passed into the hands
of third persons who may have paid a price higher than the auction sale money, the first
thing to consider is that the stipulation contains no statement of the reasonable value of
the properties; and although defendant' answer avers that the assessed value was P3,960 it
also avers that their real market value was P2,000 only. Anyway, mere inadequacy of
price – which was the complaint' allegation – is not sufficient ground to annul the
sale. It is only where such inadequacy shocks the conscience that the courts will
intervene. x x x Another consideration is that the assessed value being P3,960 and the
purchase price being in effect P1,864 (P464 sale price plus P1,400 mortgage lien which
had to be discharged) the conscience is not shocked upon examining the prices paid in the
sales in National Bank v. Gonzales, 45 Phil., 693 and Guerrero v. Guerrero, 57 Phil.,
445, sales which were left undisturbed by this Court.

Furthermore, where there is the right to redeem – as in this case – inadequacy of price
should not be material because the judgment debtor may re-acquire the property or
else sell his right to redeem and thus recover any loss he claims to have suffered by
reason of the price obtained at the execution sale.

x x x x (Emphasis supplied).62

In other words, gross inadequacy of price does not nullify an execution sale. In an ordinary sale,
for reason of equity, a transaction may be invalidated on the ground of inadequacy of price, or
when such inadequacy shocks one's conscience as to justify the courts to interfere; such does not
follow when the law gives the owner the right to redeem as when a sale is made at public
auction,63 upon the theory that the lesser the price, the easier it is for the owner to effect
redemption.64 When there is a right to redeem, inadequacy of price should not be material
because the judgment debtor may re-acquire the property or else sell his right to redeem and thus
recover any loss he claims to have suffered by reason of the price obtained at the execution
sale.65 Thus, respondent stood to gain rather than be harmed by the low sale value of the
auctioned properties because it possesses the right of redemption. More importantly, the subject
matter in Barrozo is the auction sale, not the levy made by the Sheriff.

The Court does not sanction the piecemeal interpretation of a decision. To get the true intent and
meaning of a decision, no specific portion thereof should be isolated and resorted to, but the
decision must be considered in its entirety.66

As regards Buan, it is cast under an entirely different factual milieu. It involved the levy on two
parcels of land owned by the judgment debtor; and the sale at public auction of one was
sufficient to fully satisfy the judgment, such that the levy and attempted execution of the second
parcel of land was declared void for being in excess of and beyond the original judgment award
granted in favor of the judgment creditor.

In the present case, the Sheriff complied with the mandate of Section 9, Rule 39 of the Revised
Rules of Court, to "sell only a sufficient portion" of the levied properties "as is sufficient to
satisfy the judgment and the lawful fees." Each of the 15 levied properties was successively
bidded upon and sold, one after the other until the judgment debt and the lawful fees were fully
satisfied. Holly Properties Realty Corporation successively bidded upon and bought each of the
levied properties for the total amount of P5,450,653.33 in full satisfaction of the judgment award
and legal fees.67

Secondly, the Rules of Court do not require that the value of the property levied be exactly the
same as the judgment debt; it can be less or more than the amount of debt. This is the
contingency addressed by Section 9, Rule 39 of the Rules of Court. In the levy of property, the
Sheriff does not determine the exact valuation of the levied property. Under Section 9, Rule 39,
in conjunction with Section 7, Rule 57 of the Rules of Court, the sheriff is required to do only
two specific things to effect a levy upon a realty: (a) file with the register of deeds a copy of the
order of execution, together with the description of the levied property and notice of execution;
and (b) leave with the occupant of the property copy of the same order, description and notice. 68
Records do not show that respondent alleged non-compliance by the Sheriff of said requisites.

Thirdly, in determining what amount of property is sufficient out of which to secure satisfaction
of the execution, the Sheriff is left to his own judgment. He may exercise a reasonable discretion,
and must exercise the care which a reasonably prudent person would exercise under like
conditions and circumstances, endeavoring on the one hand to obtain sufficient property to
satisfy the purposes of the writ, and on the other hand not to make an unreasonable and
unnecessary levy.69 Because it is impossible to know the precise quantity of land or other
property necessary to satisfy an execution, the Sheriff should be allowed a reasonable margin
between the value of the property levied upon and the amount of the execution; the fact that the
Sheriff levies upon a little more than is necessary to satisfy the execution does not render his
actions improper.70 Section 9, Rule 39, provides adequate safeguards against excessive levying.
The Sheriff is mandated to sell so much only of such real property as is sufficient to satisfy the
judgment and lawful fees.

In the absence of a restraining order, no error, much less abuse of discretion, can be imputed to
the Sheriff in proceeding with the auction sale despite the pending motion to quash the levy filed
by the respondents with the HLURB. It is elementary that sheriffs, as officers charged with the
delicate task of the enforcement and/or implementation of judgments, must, in the absence of a
restraining order, act with considerable dispatch so as not to unduly delay the administration of
justice; otherwise, the decisions, orders, or other processes of the courts of justice and the like
would be futile.71 It is not within the jurisdiction of the Sheriff to consider, much less resolve,
respondent's objection to the continuation of the conduct of the auction sale. The Sheriff has no
authority, on his own, to suspend the auction sale. His duty being ministerial, he has no
discretion to postpone the conduct of the auction sale.

Finally, one who attacks a levy on the ground of excessiveness carries the burden of sustaining
that contention.72 In the determination of whether a levy of execution is excessive, it is proper to
take into consideration encumbrances upon the property, as well as the fact that a forced sale
usually results in a sacrifice; that is, the price demanded for the property upon a private sale is
not the standard for determining the excessiveness of the levy. 73
Here, the HLURB Arbiter and Director had no sufficient factual basis to determine the value of
the levied property. Respondent only submitted an Appraisal Report, based merely on surmises.
The Report was based on the projected value of the townhouse project after it shall have been
fully developed, that is, on the assumption that the residential units appraised had already been
built. The Appraiser in fact made this qualification in its Appraisal Report: "[t]he property
subject of this appraisal has not been constructed. The basis of the appraiser is on the existing
model units."74 Since it is undisputed that the townhouse project did not push through, the
projected value did not become a reality. Thus, the appraisal value cannot be equated with the
fair market value. The Appraisal Report is not the best proof to accurately show the value of the
levied properties as it is clearly self-serving.

Therefore, the Order dated August 28, 2000 of HLURB Arbiter Aquino and Director Ceniza in
HLRB Case No. IV6-071196-0618 which set aside the sheriff's levy on respondent's real
properties, was clearly issued with grave abuse of discretion. The CA erred in affirming said
Order.

WHEREFORE, the instant petition is GRANTED. The Decision dated October 30, 2002 of the
Court of Appeals in CA-G.R. SP No. 60981 is REVERSED and SET ASIDE. The Order dated
August 28, 2000 of HLURB Arbiter Ma. Perpetua Y. Aquino and Director Belen G. Ceniza in
HLRB Case No. IV6-071196-0618 is declared NULL and VOID. HLURB Arbiter Aquino and
Director Ceniza are directed to issue the corresponding certificates of sale in favor of the
winning bidder, Holly Properties Realty Corporation. Petitioner is ordered to return to
respondent the amount of P2,125,540.00, without interest, in excess of the proceeds of the
auction sale delivered to petitioner. After the finality of herein judgment, the amount of
P2,125,540.00 shall earn 6% interest until fully paid.