Title Ocampo v. Domalanta G.R. No. L-21011.
August 30, 1967
Ponente SANCHEZ J.
Doctrine [related to the topic]
Facts A case of foreclosure of real estate and chattel mortgage was filed in
the CFI.
FIRST CASE: In the said case, a judgment was rendered ordering
petitioner-appellant Ocampo to pay respondent-appellee Domalanta to
pay P2000 with 1% interest from Dec. 5, 1958 full payment, and
attorney’s fees of P500 AND and directing that after failure to pay the
above amounts in ninety days, the properties mortgaged be sold at
public auction, subject to a first mortgage in favor of the Philippine
National Bank in reference to appellant's land (located in Tanza, Cavite)
mortgaged.
However, the judgment debt remained unpaid.
The court, on Domalanta's motion, issued a writ of execution. Pursuant
thereto, on May 8, 1962, appellee sheriff sold at public auction the
mortgaged land to the highest bidder, appellee Ignacio Domalanta, for
P3,537.00.
Domalanta moved to confirm the sale. Subsequently, the court ordered
confirmed such sale on June 2, 1962.
SECOND CASE: After the said order became final and executory, a civil
case was instituted by petitioner Ocampo to annul the sherriff sale on
the grounds that respondent-mortgagor Domalanta was not properly
notified of the foreclosure sale; and the price for which the property
was sold was "very much lower than the actual market value" and
shocking to the conscience, and thus invalid.
Respondent Domalanta moved to dismiss the complaint on the ground
of res judicata. Then, the court dismissed the case with prejudice.
Hence, this appeal
Contentions Petitioner [Name] Respondent [Name]
Lower
Courts
Appellate
Court
Issue 1. W/N the dismissal of the second case of annulment of mortgage sale is
proper.
2. W/N personal notice to mortgagor is necessary.
SC Ruling 1. Yes.
Confirmation of sale of real estate in judicial foreclosure proceedings cuts off all
interests of the mortgagor in the real estate sold and vests them in the
purchaser. Confirmation retroacts to the date of the sale. An order of
confirmation in court foreclosure proceedings is a final order, not
merely interlocutory. The right to appeal therefrom has long been
recognized. In fact, it is the final order from which appeal may be taken in
judicial foreclosure proceedings. No appeal was taken. It follows that said
order is final, binding.
The first suit is a judicial foreclosure of mortgage; the second, annulment of
the foreclosure sale conducted in the first suit. A proceeding for judicial
foreclosure of mortgage is an action quasi in rem. It is based on a
personal claim sought to be enforced against a specific property of a
person named party defendant. And, its purpose is to have the property seized
and sold by court order to the end that the proceeds thereof be applied to the
payment of plaintiff's claim.
In the present case, the first suit was an action quasi in rem. A judgment
therein "is conclusive only between the parties." By that provision, the
confirmation order in the foreclosure case is, "with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties" and their privies.
It is true that the cause of action in the first suit is not exactly identical to the
cause of action in the second. For the latter merely challenges the legality of
the sheriff's sale in the first proceeding. However, such legality of sale is an
issue which could have been, and was in fact raised and rejected in
the first case. Therefore, the question raised by appellant in the present
suit should be "deemed to have been adjudged in a former judgment
which appears upon its face to have been so adjudged, or which was actually
and necessarily included therein or necessary thereto."
It is thus beyond doubt that the present action is barred by the conclusiveness
of judgment in the anterior suit. This case must be dismissed.
2. No.
The presumption that the notice of sale of real estate in foreclosure
proceedings has been given, holds true here. For, indeed, a legal tenet of long
standing is that official duty presumptively has been regularly
performed. Appellant pleaded such lack of notice. Her duty it was to prove it
in court. She did not.
And if the notice that appellant here complains of is personal notice to her, she
is wrong. Because, personal notice is not required by Section 16 of Rule 39 of
the 1940 Rules of Court, now Section 18, Rule 39 of the new Rules.
Jurisprudence in the 1930 case of La Urbana vs. Belando, 54 Phil. 930, the
Court held that a case of foreclosure of real estate mortgage, where we
pronounced that "[t]he law does not require that such notification be
given personally to the party upon whose property execution is
levied."
Conformably to the foregoing, the lower court's order of November 9, 1962
dismissing this case, and the order of November 21, 1962 denying
reconsideration thereof, are hereby affirmed. Costs against plaintiff-appellant.
So ordered.
