SALES BATCH 1 DEAN

SILVESTRE DIGNOS and ISABEL LUMUNGSOD, petitioners,

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

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.

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-inFact 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.

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.

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.

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:
I --- 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

SALES BATCH 1 DEAN

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.
V------ 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;

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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 nonpayment 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.

SALES BATCH 1 DEAN

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.
DIGNOS VS. COURT OF APPEALS, AND JABIL
FACTS: In July 1965, herein petitioners Silvestre T. Dignos and Isabela Lumungsod de Dignos
(spouses Dignos) sold their parcel of land in Opon, LapuLapu to herein private respondent Antonio

3
Jabil for the sum of P28,000 payable for two installments, with an assumption of indebtedness with
the First Insular Bank of Cebu in the sum of P12,000 and the next installment of P4,000 to be paid in
September 1965. In November 1965, the spouses Dignos sold the same parcel of land for P35,000 to
defendants Luciano Cabigas and Jovita L. de Cabigas (spouses Cabigas) who were then US citizens,
and executed in their favor an Absolute Deed of Sale duly registered in the Office of the Register of
Deeds.
Upon discovery of the 2nd sale of the subject land, Jabil filed the case at bar in the CFI of Cebu which
rendered its Decision in August 1975 declaring the 2nd sale to the spouses Cabigas null and void ab
initio and the 1st sale to Jabil not rescinded. The CFI of Cebu also ordered Jabil to pay the remaining
P16,000 to the spouses Dignos and to reimburse the spouses Cabigas a reasonable amount
corresponding the expenses in the construction of hollow block fences in the said parcel of land. The
spouses Dignos were also ordered to return the P35,000 to the spouses Cabigas.
Both Jabil and the spouses Dignos appealed to the Court of Appeals, which affirmed in July 1981 the
CFI of Cebus Decision except for the part of Jabil paying the expenses of the spouses Cabigas for
building a fence. The spouses Dignos contested that the contract between them and Jabil was merely a
contract to sell and not a deed of sale.
ISSUE: Is the contract between the parties a contract of sale or a contract to sell?
COURT RULING:
The Supreme Court affirmed the Decision of the Court of Appeals saying stated that all the elements
of a valid contract of sale are present in the document and that the spouses Dignos had no right to sell
the land in question because an actual delivery of its possession has already been made in favor of
Jabil as early as March 1965. It was also found that the spouses Dignos never notified Jabil by notarial
act that they were rescinding the contract, and neither did they file a suit in court to rescind the sale.
There is no showing that Jabil properly authorized a certain Cipriano Amistad to tell petitioners that
he was already waiving his rights to the land in question.

JACOBUS BERNHARD HULST, petitioner, vs. PR BUILDERS, INC., respondent.

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. IV6071196-0618.
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:

SALES BATCH 1 DEAN

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

4
of land for the total amount ofP5,450,653.33. 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 Sale15 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).

SALES BATCH 1 DEAN

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.

5
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. 28It
does not create, modify or extinguish a juridical relation.29

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 Decision 20 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

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.

SALES BATCH 1 DEAN

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

6
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 isP5,450,653.33) 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.

SALES BATCH 1 DEAN

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

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.

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.

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:

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

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 wasP3,960 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 plusP1,400 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 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.59In 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:

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.

SALES BATCH 1 DEAN

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.

8
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 andVOID. 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.
SO ORDERED.
JACOBUS BERNHARD HULST v. PR BUILDERS INC. (G.R. No. 156364)
FACTS:
The Petitioner and his spouse, both Dutch Nationals, entered into a Contract to Sell with PR Builders,
Inc. to purchase a 210-sq m residential unit in the respondent's townhouse project in Batanagas. When
PR Builder's failed to comply with their verbal promise to complete the project, the spouses Hulst
filed a complaint for recession of contract with interest, damages and attorney's fees before the
Housing and Land Regulatory Board (HLURB), which then was granted. A Writ of Execution was
then addressed to the Ex-Officio Sheriff of the RTC of Tanauan, Batangas, but upon the complaint of
the respondent, the levy was set aside, leaving only the respondent's personal properties to be levied
first. The Sheriff set a public auction of the said levied properties, however, the respondent filed a
motion to quash Writ of levy on the ground that the sheriff made an over levy since the aggregate
appraised value of the properties at P6,500 per sq m is P83,616,000. Instead of resolving the objection
of the respondent's regarding the auction, the Sheriff proceeded with the auction since there was no
restraining order from the HLURB. The 15 parcels of land was then awarded to Holly Properties
Realty at a bid of P5,450,653. On the same day, the Sheriff remitted the legal fees and submitted to
contracts of sale to HLURB, however, he then received orders to suspend proceedings on the auction
for the reason that the market value of the properties was not fair. There was disparity between the
appraised value and the value made by the petitioner and the Sheriff, which should've been looked
into by the Sheriff before making the sale. While an inadequacy in price is not a ground to annul such
sale, the court is justified to such intervention where the price shocks the conscience.

Finally, one who attacks a levy on the ground of excessiveness carries the burden of sustaining that
contention.72In 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

ISSUE:
1. Whether or not the Sheriff erred in the value that was attached to the properties during the auction
and as well as disregarding the objection made by the respondent's?
2. Whether or not the market value of the said property was inadequate?
2. Whether or not the spouses Hulst's request for damages is actionable?

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

HELD:
1. No. According to the Rules of Court, the value of the property levied is not required to be exactly
the same as the judgment debt. In the levy of property, the Sheriff does not determine the exact
valuation of the levied property. The Sheriff is left to his own judgment. He 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.

SALES BATCH 1 DEAN

In the absence of a restraining order, no error 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. Sheriffs, as officers charged with the task of the enforcement and/or implementation of
judgments, must act with considerable dispatch so as not to unduly delay the administration of justice.
It is not within the jurisdiction of the Sheriff to consider and 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.
2. No. The HLURB Arbiter and Director had no sufficient factual basis to determine the value of the
levied property. The Appraisal report, that was submitted, 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. 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.
3. No. Under Article 12, Sec.7 of the 1987 Constitution, foreign nationals, the spouses Hulst, are

9
disqualified form owning real property. However, under article 1414 of the Civil Code, 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. Further, petitioner is not entitled to actual as well as interests thereon,
moral and exemplary damages and attorney's fees.