ULANDU

In this petition for review, petitioner Cagayan de Oro Coliseum, Inc. assails the decision of the Court of Appeals in CA-G.R. CV No. 437821 [Penned by Justice N. de Pano, Jr. and concurred in by Justice Q. Abad-Santos, Jr. and D. Magtolis.] which reversed and set aside the decision dated August 5, 1993 of the Regional Trial Court, Branch 19, Cagayan de Oro City in two consolidated cases, Civil Case No. 89-098 and Special Civil Action No. 6811. Esmsc

Spanning a period of more than twenty (20) years, this case involves a long drawn-out struggle for ownership over a valuable piece of real property in Cagayan de Oro City.

In 1977, petitioner Cagayan de Oro Coliseum, Inc., a domestic corporation domiciled in Cagayan de Oro City, obtained from one Santiago Maceren a loan in the amount of P149,253.73.2 [Petition, pp. 1-2, Official Records I, pp. 2-3.] As security for the loan, petitioner executed a promissory note and a mortgage over all its assets and properties, including a parcel of land situated in the poblacion of the City and registered in its name under Transfer Certificate of Title (TCT) No. T-3383. The land, which has an area of 4,025 square meters with two (2) commercial buildings thereon respectively measuring 1,606 and 379 square meters,3 [Official Records I, p. 8.] is more particularly described as follows:

The loan, together with the promissory note and the mortgage, were later assigned by Maceren to the Commercial Credit Corporation of Cagayan de Oro (Commercial Credit).5 ["Opposition to the Issuance of Preliminary Injunction or Restraining Order", p. 3., Official Records I, p. 16.] Petitioner failed to pay the loan when it became due, hence, the Commercial Credit commenced foreclosure proceedings on the said parcel of land. Esm

On October 23, 1979, five stockholders of petitioner corporation instituted before the then Court of First Instance (CFI) of Misamis Oriental, Branch IV, a petition for injunction against Commercial Credit, the City Sheriff of Cagayan de Oro and herein petitioner corporation, entitled "Ralph Lou I. Willkom, Benber B. Apepe, Bernardo Roa, Marcos Balarias and Teresita Macale, Petitioners versus Rufo J. Waminal, City Sheriff of Cagayan de Oro, Commercial Credit Corporation and Cagayan de Oro Coliseum, Inc., Respondents," docketed as Special Civil Action No. 6811. The five stockholders sought to enjoin the public sale of the corporate property alleging that the loan was contracted by Diego Imperio, the president of the corporation, without authority from the stockholders; and that the creditor, Santiago Maceren, was corporate treasurer and a member of the Board of Directors of petitioner corporation at the time the loan was obtained.6 [Petition in Special Civil Action No. 6811, p. 2, Official Records I, p. 3.]

Eventually, the parties, assisted by their respective counsel, entered into a compromise agreement which became the basis of a judgment rendered by the trial court on March 11, 1980, whereby the five stockholders ratified the loan of the corporation to Commercial Credit in the amount of P249,263.23, computed as of February 15, 1980; the corporation bound itself to pay the loan in equal monthly installments of P11,000.00 and agreed that failure to pay any of the installments shall render the judgment immediately executory, with penalty on overdue and unpaid installments at the rate of three per cent (3%) per month plus five per cent (5%) of the outstanding balance as additional attorney’s fees. The Compromise Judgment reads as follows:

On March 4, 1983, Commercial Credit filed with the court a quo, now the Regional Trial Court, Branch 19, Cagayan de Oro City, an "Ex-Parte Motion for the Issuance of a Writ of Execution." Commercial Credit alleged that petitioner corporation failed to pay several installments on its loan and left an outstanding balance of P70,152.68, excluding sheriff’s expenses.8 [Official Records I, pp. 60-61.] The trial court granted the motion on March 9, 1983.9 [Official Records I, p. 64.] The following day, the Branch Clerk of Court issued the writ of execution on the personal and real properties of petitioner corporation. On March 11, the deputy sheriff filed a notice of levy on petitioner’s title with the Register of Deeds of Cagayan de Oro City.10 [See Annotations in TCT No. T-3383, Exhibit "P", Official Records II, pp. 245-246.]

Petitioner forthwith filed a "Motion for Reconsideration of the Order of Execution" alleging that the issuance of the order of execution ex-parte violated petitioner’s right to due process; that a hearing should have been conducted on the motion for execution because petitioner had already made payments in the total amount of P419,429.95, resulting in an overpayment of P94,028.12.11 [Official Records I, pp. 65-68; also marked as Annex "15" to Respondents’ Memorandum, Rollo, pp. 612-616.]

In an order dated November 26, 1986, the trial court denied petitioner’s motion for reconsideration. The trial court, however, reduced petitioner’s principal obligation from P70,152.68 to P64,956.19 but ordered it to pay the three per cent (3%) monthly penalty charge until full payment and five per cent (5%) of the outstanding balance as additional attorney’s fees. Accordingly, the court ordered the issuance of a writ of execution for the collection of said amount: Juri-smis

On December 4, 1986, the Branch Clerk of Court of the trial court issued the writ of execution, which reads:

Pursuant to this writ, Deputy Provincial Sheriff Maximiano Mabanag, Jr. published the notice of auction sale scheduled on January 23, 1987. The sale did not proceed on said date, however, due to some internal problems in the office of the sheriff.

Meanwhile, petitioner filed with the Court of Appeals an action for annulment of judgment of the trial court, docketed as CA-G.R. SP No. 10888, wherein it sought to set aside the compromise judgment on the ground of fraud and misrepresentation which it discovered only in 1983. Petitioner pleaded four causes of action, viz: (1) Of its total obligation of P325,401.83 to Commercial Credit, petitioner had already paid P303,758.15 and left a balance of only P21,647.79, not P70,152.68 as claimed by Commercial Credit. Respondent judge ordered execution of the compromise judgment without a hearing and petitioner’s motion for reconsideration was decided three years and seven months later which gave Commercial Credit a longer period to impose the monthly 3% penalty and 5% additional attorney’s fees on the increased balance; (2) Two stipulations in the compromise judgment violated the provisions of Presidential Decree No. 116 amending the Usury Law, and Central Bank Circular No. 721 issued on February 25, 1980, prior to the promulgation of the compromise judgment by the trial court on March 11, 1980; (3) Respondent judge gravely abused his discretion in applying portions of the installment payments as past due charges instead of fully applying them to the principal debt; and (4) The Branch Clerk of Court issued a writ of execution and the Deputy Provincial Sheriff issued a notice of auction sale before petitioner received a copy of the order denying its motion for reconsideration.14 [Exhibit "14", Folder of Exhibits for Defendants; also marked as Annex "1" to Respondent’s Memorandum, Rollo, pp. 485-502.] Petitioner thus prayed: Supr-eme

On February 13, 1987, the Court of Appeals rendered a decision holding that since petitioner had made payments totalling P303,758.15, it equitably reduced the penalty of three per cent (3%) per month to only one-half per cent (1/2%) per month on the overdue and unpaid installments, and the five per cent (5%) additional attorney’s fees to only two per cent (2%) of the outstanding balance. The Court of Appeals declared:

Meanwhile, on January 19, 1987, herein respondent Sheriff Mabanag issued an Amended Sheriff’s notice of sale setting the sale of the property at public auction on February 13, 1987, or on the same day the Court of Appeals promulgated its decision. At the Auction Sale the property was sold to the highest bidder, herein respondent Richard Go King, for the sum of P170,000.00.

Both parties moved for reconsideration of the decision of the Court of Appeals. Petitioner argued that: (1) the penalty or past due charges on the obligation be applied only after the payment of the principal and interest, and that the reduced penalty be applied from the time it was to be imposed, instead of from the date the trial court denied the motion for reconsideration; (2) that Commercial Credit, to its advantage, concealed from petitioner the promulgation of C.B. Circular No. 721 before rendition of the compromise judgment, and as a result of the non-application of said Circular, petitioner’s obligation ballooned to P170,000.00; (3) that the auction sale was conducted on February 13, 1987,17 [Official Records I, p. 126.] the day of promulgation of the Court of Appeals’ decision substantially amending the amount of judgment debt.18 [CA Resolution dated May 19, 1987, pp. 1-2; Exhibit "23-A," Folder of Exhibits for Defendants, pp. 155-156.] Petitioner thus prayed:

In a Resolution dated May 19, 1987, the Court of Appeals denied the petitioner’s motion. It, however, granted the motion for reconsideration with respect to the public auction sale conducted during the pendency of the case. The Court of Appeals declared the writ of execution, the sheriff’s notice of sale, the public auction sale and the certificate of sale null and void insofar as they were in excess of the judgment as modified by its decision. Thus: Ed-pm-is

Commercial Credit moved for reconsideration, but its motion was denied on March 23, 1987.21 [Exhibits "20-A" and "20-B," Folder of Defendants’ Exhibits; also marked as Annex "4" to Respondents’ Memorandum, Rollo, pp. 553-554.]

Both parties filed separate petitions for review before us. In its petition in G.R. No. 79100, petitioner prayed:

This petition was denied in the Resolution of August 31, 1987 for having been filed late. In the same Resolution, the Third Division of this Court also declared:

On the other hand, the petition of Commercial Credit in G.R. No. 78315 was granted.24 [See Commercial Credit Corporation of Cagayan de Oro v. Court of Appeals, G.R. No. 78315, 169 SCRA 1 (1989)] In a decision dated January 2, 1989, the First Division of this Court set aside the decision and resolution of the Court of Appeals and affirmed the compromise judgment of the trial court, to wit:

Petitioner filed a "Motion to Consider and Resolve En Banc Herein Motion for Reconsideration" in view of the Resolution in G.R. No. 79100. On March 15, 1989, the motion was denied.

Judgment in G.R. No. 78315 was entered on April 3, 1989.

Meanwhile, during the pendency of G.R. No. 78315, on August 17, 1988, respondent Sheriff issued to respondent Go King a Final Deed of Conveyance over the subject property. TCT No. T-3383 of petitioner was cancelled and TCT No. T-51704 was issued in the name of respondent Go King.

On April 11, 1989, after finality of the decision of the Supreme Court in G.R. No. 78315, petitioner instituted Civil Case No. 89-098 against herein respondents Sheriff Mabanag and Richard Go King for "Remedies from Falsification and Damages." The case was filed before Branch 24 of the Regional Trial Court, Cagayan de Oro. In its amended complaint, petitioner alleged that (1) the execution proceedings were null and void for failure to comply with the requirements of the Rules of Court; (2) the cancellation of petitioner’s title and the issuance of another in the name of respondent Go King was made in violation of the Court of Appeals’ Resolution in CA-G.R. SP No. 10888; and (3) assuming that the auction sale was valid, petitioner was exercising his right of redemption by consigning with the court the purchase price of P170,000.00 plus interest in accordance with the Rules of Court. Petitioner prayed that judgment be rendered:

The following day, April 12, 1989, petitioner filed before Branch 19 of the Regional Trial Court, the same Branch where Special Civil Action No. 6811 was instituted in 1979, an "Omnibus Motion to Declare the Judgment Satisfied, Reimburse Bidder or Pay as in Redemption, Etc.", praying that the auction sale of the subject property be declared null and void and that the title over the property in the name of Richard Go King be cancelled and petitioner’s title fully restored. In the same pleading, petitioner manifested that on the assumption that the execution proceedings were valid, it was exercising its right to redeem the property by consigning redemption money in court.27 [Official Records I, pp. 137-142.]

On June 19, 1999, the Omnibus Motion was denied in view of the pendency of the complaint in Civil Case No. 89-098 before Branch 24.28 [Official Records I, pp. 270-273.] Petitioner moved for reconsideration.

On July 11, 1989, the order of denial was lifted and the Omnibus Motion was instituted. The court declared that the resolution of the said motion shall await the outcome of Civil Case No. 89-098 before Branch 24, unless the parties shall have decided to consolidate the two cases.29 [Official Records I, p. 290.]

Civil Case No. 89-098 with Special Civil Action No. 6811 were ordered consolidated by the court on July 14, 1989.30 [Official Records II, p. 141.] Sclex

On February 26, 1991, respondent Go King filed a "Motion for the Issuance of a Writ of Possession." On November 13, 1991, he also filed a "Petition for the Appointment of a Receiver." Both were opposed by petitioner.

On August 5, 1993, the trial court rendered a decision declaring the deed of sale, the final deed of conveyance, and TCT No. T-51704 in the name of respondent Go King as null and void, and denying respondent Go King’s motion for writ of possession and petition for receiver, after finding that the property subject of execution was not levied upon, that notices of sale were not posted and that there was no return of the writ of execution of March 10, 1983.31 [RTC Decision, p. 18; also marked as Annex "C" to the Petition, Rollo, p. 99.]

On appeal by respondents, the Court of Appeals reversed the trial court and dismissed Civil Case No. 89-098. The appellate court found that the case was a relitigation of the issues raised in CA-G.R. SP No. 10888 and that the notice requirements for the execution sale were validly complied with.

Petitioner’s motion for reconsideration was denied in the Resolution of July 4, 1997. Hence, this petition where it is alleged that:

In its first assigned error, petitioner claims that the trial court’s execution order of November 26, 1986 amending the March 9, 1983 order was null and void for lack of due process.

It is too late in the day for petitioner to assail the validity of the order of November 26, 1986. This order became final for petitioner’s failure to appeal therefrom. The institution of CA-G.R. SP No. 10888, the petition for annulment of judgment of the trial court, did not stay the proceedings before the court a quo. CA-G.R. CV No. 1088 was an original action in the Court of Appeals in the exercise of its exclusive original jurisdiction.33 [Sec. 9 (2), B.P. 129.] Since the said court did not issue any restraining order or injunction, the trial court’s order of execution lapsed into finality.34 [See Rule 47, 1997 Rules of Civil Procedure.]

The issue of whether a hearing should have been conducted by the trial court to determine petitioner’s overpayment of its debt has been raised in CA-G.R. SP No. 10888.35 [Petition, p. 6, Annex "1" to Respondent’s Memorandum, Rollo, p. 490.] Respondent Court of Appeals denied this claim in its decision of February 13, 1987, which was affirmed by this Court in G.R. No. 79100.

The present petition hinges on the procedural issue of whether petitioner is barred by res judicata from assailing the validity of the execution proceedings over the subject property. Private respondent argues that Civil Case No. 89-098, the second action, is barred by the first action, i.e., CA-G.R. SP No. 10888, which we disposed of with finality in G.R. Nos. 79100 and 78315.36 [Respondents’ Memorandum, pp. 34-40, Rollo, pp. 468-474.]

For res judicata to be an absolute bar to a subsequent action, the following requisites must concur: (1) the former judgment or order must be final; (2) the judgment or order must be on the merits; (3) it must have been rendered by a court having jurisdiction over the subject matter and parties; and (4) there must be between the first and second actions, identity of parties, of subject matter, and of causes of action.37 [Traders Royal Bank v. Intermediate Appellate Court, 273 SCRA 521, 524 (1997); Guevara v. Benito, 247 SCRA 570, 573 (1995); Javier v. Veridiano, 237 SCRA 565, 570 ( 1994); American Inter-Fashion Corp. v. Office of the President, 197 SCRA 409, 417 (1991); Nabus v. Court of Appeals, 193 SCRA 732, 740 (1991)]

The judgment in the first case, CA-G.R. SP No. 10888, which we reviewed in G.R. Nos. 78315 and 79100 was a final judgment. It was on the merits and rendered by this Court having jurisdiction over the subject matter and the parties. Whether there is identity of parties, of subject matter and causes of action, between CA-G.R. SP No. 10888 and this case, is the crux of the controversy. Sdaadsc

There is identity of parties where the parties in both actions are the same, or there is privity between them, or they are "successors-in-interest by title subsequent to the commencement of the action, litigating for the same thing and under the same title and in the same capacity."38 [Section 49 (b), Rule 39, Revised Rules of Court, now Section 47 (b), Rule 39, 1997 Rules of Civil Procedure; Valencia v. RTC of Quezon City, Br. 90, 184 SCRA 80, 90 (1990); Sunflower Umbrella Mfg. Co., Inc. v. de Leon, 237 SCRA 153, 165 (1994)] Respondent Sheriff Mabanag was a respondent in CA-G.R. SP No. 10888 all the way to the Supreme Court. Private respondent Richard Goking, however, was not a party in the previous cases. He was impleaded only in Civil Case No. 89-098 after finality of the decisions in G.R. Nos. 79100 and 78315. Although he obtained his title to the property "subsequent to the commencement of the action," his rights to the property arose as buyer at the said sale, not as a creditor from any direct transaction with or title obtained from Commercial Credit, the judgment creditor. As the highest bidder, respondent Go King was issued a certificate of sale, and subsequently a final deed of conveyance for which TCT No. T-3383 of petitioner was cancelled and TCT No. T-51704 was issued in his name. The second case, Civil Case No. 89-098, was brought against him for the cancellation of his title over the subject property due to irregularities in the execution sale, not from the merits of the compromise judgment. There is therefore no identity of parties in CA-G.R. SP No. 10888 and Civil Case No. 89-098.

Neither is there identity of subject matter. CA-G.R. SP No. 10888 did not directly involve the property subject matter of this case. It was concerned with the provisions of the compromise judgment and the claim that petitioner was denied due process by the trial court in granting execution. On the other hand, Civil Case No. 89-098 dealt with the validity of the execution proceedings after the validity of the compromise judgment was upheld.39 [See Ramos v. Pablo, 146 SCRA 24, 31 (1986)]

The two cases do not have the same causes of action. The test of identity of causes of action lies not in the form of action but on whether the same facts or evidence would support and establish the former and present causes of action.40 [Carlet v. Court of Appeals, 275 SCRA 97, 107-108 (1997); Mendiola v. Court of Appeals, 258 SCRA 492, 502 (1996); Nabus v. Court of Appeals, 193 SCRA 732, 742-743 (1991); Vda de Cruzo v. Cariaga, Jr., 174 SCRA 330, 343 (1989)] The doctrine of res judicata extends to facts and conditions as they existed at the time judgment was rendered and to the legal rights and relations of the parties fixed by the facts so determined.41 [Guevara v. Benito, 247 SCRA 570, 573 (1995); Caina v. Court of Appeals, 239 SCRA 252, 263 (1994)] The mere fact that the same relief is sought in the subsequent action will not render the judgment in the prior action operative as res judicata, such as when the two actions are brought on different statutes and rules as in the case at bar.42 [Nabus v. Court of Appeals, supra, at 743.]

From the pleadings, the causes of action in CA-G.R. SP No. 10888 involved the lack of due process, the invalidity of the compromise judgment itself, particularly the provisions on the rates of interest and penalties vis-a-vis the Usury Law and C.B. Circular No. 721, as well as the application of payments under the Civil Code. On the other hand, the cause of action in Civil Case No. 89-098 is anchored on the validity of the execution proceedings and the debtor’s exercise of the right of redemption under Rule 39 of the Rules of Court. Missdaa

In its motion for reconsideration of the Court of Appeals’ decision in CA-G.R. SP No. 10888, petitioner assailed the validity of the writ of execution, the sheriff’s notice of sale, the public auction sale of February 13, 1987 and the certificate of sale. A careful examination of said motion for reconsideration reveals that the validity of these documents of execution was assailed with respect to the computation of the amount of petitioner’s debt subject of execution for not being in accordance with the decision of the Court of Appeals. In other words, it was the amount subject of execution that was questioned insofar as it did not conform with the reduced rates of interest and penalty charges imposed by the Court of Appeals. In fact, the Court of Appeals nullified the writ of execution, sheriff’s notice of sale, the public auction sale and the certificate of sale insofar as they were in excess of the modified judgment. The computation of petitioner’s outstanding balance goes into the substantive provisions of the compromise judgment. Petitioner did not squarely and directly challenge the procedural infirmity of the execution proceedings but pursued the merits of the compromise judgment itself.

G.R. No. 79100 was dismissed by this Court for late filing and on the ground that the Court of Appeals committed no reversible error. G.R. No. 78315 reversed the decision of the Court of Appeals in CA-G.R. SP No. 10888 and sustained the compromise judgment. Our factual finding then was that the execution proceedings "did not take place as scheduled due to some internal problems in the office of the sheriff."43 [Commercial Credit Corporation of Cagayan de Oro v. Court of Appeals, G.R. No. 78315, 169 SCRA 1, 5 (1989)] The facts in the instant case now deal with the execution proceedings themselves. The two cases are not the same for the simple reason that the cause of action in Civil Case No. 89-098 arose only after the merits of the compromise judgment were passed upon with finality by this Court. It was error for respondent Court of Appeals therefore to declare that Civil Case No. 89-098 was a "relitigation of issues" in CA-G.R. SP No. 10888.44 [CA Decision, p. 20, also marked as Annex "A" to the Petition, Rollo, p. 71.]

There being no res judicata, we now come to the merits of the instant petition. Petitioner corporation specifically alleges that the execution proceedings and the auction sale were null and void for failure to comply with the levy and notice requirements of the Rules of Court.

Execution under Rule 39 of the Revised Rules of Court is a remedy afforded by law for the enforcement of a judgment, its object being to obtain satisfaction of the judgment on which the writ is issued.45 [30 Am Jur 2d, "Executions," Sec. 43 (1994 ed.)] It issues by order of the court a quo, on motion of the judgment obligee, upon finality of a judgment or order sought to be enforced,46 [Sec. 1, Rule 39, Rules of Court; see also Sec. 1, Rule 39, 1997 Rules of Civil Procedure.] and is directed to an officer authorizing and requiring him to execute the judgment of the court.47 [Sec. 8, Rule 39, Rules of Court; also Sec. 8, Rule 39, 1997 Rules of Civil Procedure.]

If the judgment is for money, the sheriff or other authorized officer must execute the same pursuant to the provisions of Section 15 of Rule 39 of the Rules of Court, viz: xsc

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.49 [Moran, Comments on the Rules of Court. Vol. II, p. 297 (1980)]

Levy means the essential act or acts by which an officer sets apart or appropriates a part or the whole of the property of the judgment debtor for purposes of the prospective execution sale.50 [Fiestan v. Court of Appeals, 185 SCRA 751, 757 (1990); Del Rosario v. Yatco, 18 SCRA 1263, 1266 (1996); Llenares v. Valdeavella, 46 Phil., 358, 360 (1924)] The object of a levy is to take property into the custody of the law, and thereby renders 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.51 [Francisco, The Revised Rules of Court in the Philippines, Vol. II, p. 700 (1968) citing 33 C.J.S. 234; Del Rosario v. Yatco, supra, at 1266.] A valid levy on execution places the property subject of execution under the jurisdiction and authority of the court.52 [Valenzuela v. De Aguilar, 8 SCRA 212, 216-217 (1963)] It also creates a lien in favor of the judgment creditor over the right, title and interest of the judgment debtor in such property at the time of the levy, subject to liens and encumbrances then existing.53 [Sec. 16, Rule 39; now Sec. 12, Rule 39, 1997 Rules on Civil Procedure.]

The second paragraph of Section 15, Rule 39 as aforequoted provides that a levy is effected in the same manner as the levy under a writ of attachment. Rule 57 on Attachment provides:

To effect a levy upon a realty, the sheriff is required to do two specific things: (1) file with the register of deeds a copy of the order of attachment or execution, together with the description of the attached property and notice of attachment or execution; and (2) leave with the occupant of the property copy of the same order, description and notice.55 [Philippine Surety & Ins. Co., Inc. v. Zabal, 21 SCRA 682, 685 (1967); see also Martin, Civil Procedure, Vol. I, p. 806 (1989)] These are prerequisites to a valid levy, non-compliance with any of which is fatal.56 [Ibid.]

In the instant case, the execution sale of the subject property was made pursuant to the order of execution of November 26, 1986 and the writ of execution of December 4, 1986. The November 26, 1986 execution order and the corresponding writ of execution were not filed with the Register of Deeds before the auction sale of February 13, 1987. The order of November 26, 1986 was filed and inscribed on petitioner’s title only on December 7, 1988 - - exactly one (1) year and ten (10) months after the execution sale of February 13, 1987. This is clear from the annotation in TCT No. T-3383 of petitioner corporation. Thus:

Clearly, the execution order of November 26, 1986 was filed with the Register of Deeds only after the execution sale of February 13, 1987. The belated filing came after the execution of the Sheriff’s Certificate of Sale, after the issuance of the Sheriff’s Certificate of Final Deed of conveyance;58 [See Exhibit "P", Official Records II, pp. 246-247 – Entry No. 121590 – Sheriff’s Certificate of Sale dated February 13, 1987 and inscribed on February 16, 1987; and Entry No. 132265 – Sheriff’s Certificate of Final Deed of Conveyance dated October 14, 1988 and inscribed on October 20, 1988.] and after cancellation of TCT No. T-3383 of petitioner and the issuance of TCT No. T-51704 in the name of respondent Goking on October 20, 1988.59 [See TCT No. T-51704, Exhibit "Q," Official Records II, p. 247.] Respondent Sheriff himself admitted on the witness stand that he did not file a copy of the November 26, 1986 order of execution with the Register of Deeds before the February 13, 1987 sale on the belief that the property had already been levied upon by Sheriff Acero.60 [TSN of June 19, 1991, pp. 22-36; see also Petition, pp. 27-28, Rollo, pp. 29-30.] An examination of TCT No. T-3383 shows that the court order and writ of execution filed by Sheriff Acero with the Register of Deeds before the auction sale was not the November 26, 1986 order but the March 9, 1983 order, viz:

What was filed with the Register of Deeds before the execution sale of February 13, 1987 was not the order of November 26, 1986 but the March 9, 1983 order of execution. The writ of execution and notice of levy filed with the Register of Deeds on March 11, 1983 and inscribed on petitioner’s title the same day were pursuant to the March 9, 1983 order of execution.

The March 9, 1983 order was rendered ex-parte. The trial court issued the order of execution for the amount prayed for by Commercial Credit, i.e., P70,152.68, excluding sheriff’s fees and expenses in its motion for execution. On reconsideration by petitioner, the court, on November 26, 1986, reduced the amount of the principal debt to P64,956.19 but added the monthly penalty of 3% and additional attorney’s fees of 5%. With these charges, the judgment debt increased to P167,367.40, which amount was more than double than that stated in the first execution order.62 [Sheriff’s Return of Service dated February 16, 1989 executed by Deputy Sheriff Mabanag, Exhibit "Y," Official Records II, p. 277.] Missc

The order of November 26, 1986 did not supplement the March 9, 1983 order. It amended the original. The substantial increase in the amount of debt necessarily affected the kind and number of property that was to be levied upon and sold, and the price the property was to command at the public auction sale. The amendment was of such proportion that it superseded that which it amended63 [Section 8, Rule 10, 1997 Rules of Civil Procedure; see Aznar III vs. Bernad, 161 SCRA 276, 281 (1998)] and gave rise to an entirely new order.64 [Esquivel v. Alegre, 172 SCRA 315, 325 (1989); Sta. Romana v. Lacson, 104 SCRA 93 (1981); Magdalena Estates, Inc. v. Caluag, 11 SCRA 333, 337 (1964).] The March 9, 1983 order was therefore extinguished and the one of November 26, 1986 became the new order of execution.65 [Esquivel v. Alegre, supra; see also Regaladao, Remedial Law Compendium, Vol. I, p. 370 (1997)]

It was on the basis of the November 26, 1986 order that the execution sale actually took place on February 13, 1987. Since this order was not filed with the Register of Deeds prior to the execution sale, it follows that the levy was not effected and the execution sale of February 13, 1987 proceeded without a levy.66 [Francisco, The Revised Rules of Court in the Philippines, Vol. II, p. 701 (1968)] A lawful levy on execution is indispensable to a valid sale on execution.67 [Llenares v. Valdeavella, 46 Phil. 358, 361 (1963); Consolidated Bank & Trust Corp. v. Court of Appeals, 193 SCRA 158, 174 (1991)] In other words, a sale, unless preceded by a valid levy, is void, and the purchaser acquires no title to the property sold.68 [Llenares v. Valdeavella, supra, at 361.] Without a proper levy, the property is not placed under the authority of the court. The court does not acquire jurisdiction over the property subject of execution, hence, it could not transmit title thereto at the time of the sale.69 [Valenzuela v. Aguilar, 8 SCRA 212, 217 (1963); see also Martin, Civil Procedure, Vol. I, p. 804 (1989)] Where in the instant case no jurisdiction was acquired over the subject property, the execution sale was void and of no legal effect.70 [Siari Valley Estates, Inc. v. Lucasan, 109 Phil. 294, 298 (1960)] And the trial court did not err in so ruling.71 [See RTC Decision, pp. 18-19; also marked as Annex "C" to the Petition, Rollo, pp. 99-100.]

It appears that petitioner has consigned redemption money to the court a quo as an alternative cause of action. Private respondent argues that redemption is inconsistent with the claim of invalidity of the levy and sale.72 [Respondents’ Memorandum, pp. 42-46, Rollo, pp. 476-480.] In the case at bar, however, petitioner has expressly averred that the redemption was made purely on the assumption, not admission, of the validity of the execution proceedings.73 [See "Omnibus Motion to Declare Judgment Satisfied," Special Civil Action No. 6811, p. 3, Official Records I, p. 139’ Amended Complaint, Civil Case No. 89-098, p. 6, Official Records I, p. 238.] Petitioner has consistently questioned the validity of the execution proceedings. It would be unjust to deprive it of the opportunity to recover its one and only real property.74 [Amended Sheriff’s Notice of Sale dated January 19, 1987, Folder of Exhibits for Defendants Mabanag and Goking, p.34. This notice lists only one real property of petitioner corporation.] by the simple expedient of estoppel despite the express condition attached to its redemption. After all, the Rules of Court provide that a party may in one pleading set forth two or more statements of a claim alternatively or hypothetically, either in one or in separate cause of action.75 [Sec. 2, Rule 8, Rules of Court, also Sec. 2, Rule 8 of the 1997 Rules of Civil Procedure.]

Lastly, the nullity of the execution proceedings does not discharge petitioner’s indebtedness to Commercial Credit. The execution order of November 26, 1986 subsists. Unless petitioner corporation pays the amount determined under said order, execution proceedings may issue accordingly.

In view of these findings, there is no necessity for us to pass upon petitioner’s second assigned error. Misspped

WHEREFORE, the petition is GRANTED and the Decision and Resolution of respondent Court of Appeals in CA-G.R. CV No. 43782 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court, Branch 19, Cagayan de Oro City in Civil Case No. 89-098 and Special Civil Action No. 6811 is REINSTATED with the MODIFICATION that execution proceedings may henceforth issue, unless petitioner fully discharges its indebtedness under the execution order of November 26, 1986.