ERLINDA M. VILLANUEVA, herein represented by her Attorney-in-fact LEOPOLDO SAN BUENAVENTURA, TEOFILA N. ALBERTO, HARRY ASAÑA, ANGEL CHENG, MA. LOURDES NG, DOMINGO F. ISRAEL and CATALINO IMPERIAL, JR., petitioners, vs. HON. ANGEL S. MALAYA, as Judge of RTC of Naga City, Branch XXII, ROSARIO B. TORRECAMPO, ANASTACIO BONGON, ROQUE ANGELES, REGISTER OF DEEDS of Naga City and RUBEN SIA, respondents. Sclex

Separate petitions for review on certiorari assailing the decision of the Court of Appeals (Third Division) dated August 13, 19901 [Penned by Associate Justice Justo P. Torres, Jr., with the concurrence of Associate Justices Santiago M. Kapunan (Chairman) and Emeterio C. Cui.] in CA-G.R. SP No. 19533, and the resolution dated September 13, 1990 affirming said decision on reconsideration.

This case originated from an action for rescission of contract, docketed as Civil Case No. R-570 before Branch 22 of the Regional Trial Court ("RTC") of Camarines Sur and entitled "Irene P. Mariano, plaintiff, versus Francisco M. Bautista, defendant". The subject of the action was a joint venture contract between Mariano and Bautista for the development of a memorial park, one of a number of unfinished projects of Irene Mariano’s late husband, Don Macario Mariano. In a decision dated December 14, 1979, then presiding judge Jorge S. Imperial ordered the rescission of the contract, which decision was later modified by the then Intermediate Appellate Court ("IAC") in this manner: Xlaw

For Irene’s failure to comply with her obligations in the aforecited decision, a Writ of Execution for the satisfaction of said decision was issued and on November 24, 1986, the subject property, consisting of a 2,154 square meter prime land and the ancestral house and commercial building standing thereon, was levied on execution. Xsc

Petitioner Erlinda Mariano Villanueva, legally adopted daughter of Irene Mariano3 [Per order of adoption dated July 5, 1949 in Spec. Proc. No. 150 by the Court of First Instance of Misamis Oriental. Cited in RTC Order dated December 8, 1989; Records of the Case, 91.], alleges that the subject property is one of several properties that she (Erlinda), her adoptive brother Jose, and Irene inherited from Don Macario Mariano who died on December 2, 1971. On July 21, 1972, Irene and Jose executed a document denominated as "Indenture of Extrajudicial Settlement of Estate"4 [Annex "A" to Petition in G.R. No. 94617; Rollo, 108-110.], which Erlinda signed and which was acknowledged on September 8, 1972 before the Philippine Consulate in Honolulu, Hawaii. The Indenture designates the disputed property as one of the properties of the conjugal estate, and distributes the total conjugal estate in pro-indiviso shares in this manner: "(a) to Irene P. Mariano, one-half (1/2) of the entire estate plus one-third (1/3) of the other half; (b) to Jose P. Mariano and Erlinda Mariano Villanueva, one third (1/3) each of the remaining half of the estate." The Indenture likewise appoints Irene as administrator of the properties.

By virtue of the above Indenture of Extrajudicial Settlement, Transfer Certificate of Title ("TCT") No. 19645 [Annex "C" to Petition in G.R. No. 94617; Rollo, 111.] in the name of Macario Mariano was cancelled and TCT No. 65676 [Annex "D" to Petition in G.R. No. 94617; Rollo, 112.] was issued in lieu thereof in the names of Irene P. Mariano, with 4/6 share; Jose P. Mariano, married to Helen Severo, with 1/6 share; and Erlinda Mariano, married to Melchor Villanueva, Jr. with 1/6 share. Scmis

Through an Affidavit of Merger7 [Annex "E" to Petition in G.R. No. 94617; Rollo, 113.] executed by Irene Mariano on February 6, 1974 and notarized on February 7, 1974, said TCT No. 6567 was cancelled and TCT No. 7261 was issued in the name of Irene Mariano. The Affidavit declared that the merger was pursuant to her powers as administrator in the Indenture dated July 21, 1972, was not for fraud, and was made "in the interest and in furtherance of the family realty enterprise and in order to facilitate real estate dealings."8 [Ibid.]

Based on a Deed of Sale dated April 15, 19759 [Annex "D" to Petition in G.R. No. 95281; Rollo, 137-139.], it appears that Irene conveyed the disputed property to a certain Raul Santos, by virtue of which, on October 2, 1987, TCT No. 7261 was cancelled and TCT No. 17745 in the name of Raul Santos issued in lieu thereof.

Irene died on June 26, 1988. On July 18, 1988, Jose and Erlinda filed a complaint against Raul Santos for annulment of the Deed of Sale dated April 15, 1975, on grounds of forgery and simulated sale. The case, docketed as Civil Case No. 88-1506, was pending with the RTC, Branch 21 of Camarines Sur at the time the instant petitions were filed on August 31, 1990 and October 2, 1990, respectively.

In an Order dated December 6, 198810 [Records of the Case, 33-37.], issued by herein respondent Judge Angel Malaya, Erlinda and Jose were declared legal representatives of Irene in Civil Case No. R-570. Missc

Upon petition of Erlinda and Jose, the Second Division of this Court issued on December 8, 1988 a Temporary Restraining Order ("TRO") directing the RTC and respondent ex-officio provincial sheriff Rosario Torrecampo to desist from proceeding with the public auction sale in Civil Case R-570 scheduled on December 9, 1988. The TRO, however, was not enforced because the public sale proceeded as scheduled in the morning of December 9, 1988. As respondents contend, a copy of the TRO was received by respondent judge and respondent sheriff only in the afternoon of December 9, 1988, or after the sale in public auction of the disputed property on the morning of the same day. The highest bidder to the property was herein private respondent Ruben Sia.

On December 12, 1988, a Provisional Deed of Sale in favor of Sia was registered with the Office of the Register of Deeds of Naga City.

In letters respectively dated November 2, 198911 [Ibid., 41.] and November 7, 198912 [Ibid., 42, 61.] addressed to private respondent Sia and respondent sheriff, Jose signified his intention to redeem the property as heir of Irene Mariano.

On November 20, 1989, the RTC, Branch 28 of Camarines Sur issued a TRO in Civil Case No. 89-120, entitled "Godofredo Uy versus Rosario B. Torrecampo",13 [Petition for injunction and damages.] restraining Jose from redeeming the property and respondent sheriff from accepting the redemption money or allowing the consignation thereof. The TRO was issued on the basis of the allegations in Uy’s complaint that he was the assignee of Jose to the latter’s redemption rights over the subject property, and a redemption by Jose of said property would be prejudicial to Uy’s rights obtaining from such assignment. On December 1, 1989, this TRO was extended by the same court for another 20 days, and to include any attempt at redemption by Erlinda.14 [Ibid., 71.]

On November 22, 1989, Erlinda and her attorney-in-fact Atty. Leopoldo E. San Buenaventura tendered a cashier’s check15 [Ibid., 48.] in the amount of P1,562,568.67, representing the principal of P1,400,000.00 plus interest of P162,568.67 at 1% per month to private respondent Sia who refused to accept it and said that he needed to consult his lawyers first. Several more tenders of the same check were made to private respondent Sia and respondent sheriff on November 23, December 4 and December 7, 1989, all of which were not accepted.

For his part, private respondent Sia explained to respondent sheriff that he was "at a loss" as to who to accept payment from, considering that several parties, namely, Jose and Erlinda Mariano, Godofredo Uy, and Rolando Relucio16 [Second husband of the late Irene Mariano, seeking to redeem the property as administrator of her estate.] had signified their intention to redeem the property.17 [Per letter dated November 25, 1989; Records of the Case, 68.] Acting on the matter, respondent sheriff filed a "Motion to Determine Rightful Redemptioner"18 [Records of the Case, 57-60.] dated November 27, 1989 in Civil Case No. R-570. Sc

On December 7, 1989, and after her last tender to Sia, Erlinda through Atty. Buenaventura consigned the redemption price to respondent judge, who received the petition for consignation but refused to accept the cashier’s check.

Meanwhile, Jose Mariano died on December 2, 1989. Also, in the course of making tenders of payment to Sia and respondent sheriff, Erlinda executed two Deeds of Sale, both dated November 23, 198919 [Ibid., 48-55.], in favor of petitioners Alberto, Azana, Cheng, Ng, Israel and Yap-Imperial (hereafter, "petitioner-lessees"), lessees of the commercial building situated on the disputed property, over the commercial building and the land on which it is situated, on the condition that such property be first redeemed by Erlinda from Sia. Petitioner-lessees then wrote respondent sheriff of such development,20 [Per letter dated November 27, 1989; Records of the Case, 69.] which was in turn brought to the attention of the trial court in the above "Motion to Determine Rightful Redemptioner".

On December 8, 1989, respondent judge issued an Order passing upon the right to redeem the subject property. The dispositive portion of the Order reads:

On the same day the Order was issued, respondent sheriff received a letter from respondent Sia asking for the execution of a Definite Deed of Sale in his favor of the subject property, on the ground that the redemption period of twelve months or 360 days had expired as of December 7, 1989 with no redemption having been effected. Acting upon this request, respondent deputy sheriffs Bongon and Angeles issued a Definite Deed of Sale21 [Records of the Case, 101-102.] of the property in favor of Sia on December 11, 1989. Misspped

Completely unmindful of these developments and obtaining from the favorable Order of December 8, 1989 of the trial court, Erlinda filed on December 11, 1989 a "Manifestation for Perfection of Consignation" in Civil Case No. R-570. On December 12, 1989, she also filed a petition for mandamus to compel respondent sheriff and respondent Sia to accept the proferred redemption money. The case was docketed as Spec. Proc. No. MC 89-1945 in RTC, Branch 24 of Camarines Sur, and was still pending at the time the instant petitions were filed with this Court.

Also on December 12, 1989, respondent Sia filed in Civil Case No. R-570 an Ex-Parte Motion for cancellation of TCT No. 17745 in the name of Raul Santos and the issuance in lieu thereof of a title in his name.

Thus, in an Order dated December 14, 1989, the trial court treated petitioner Erlinda’s "Manifestation for Perfection of Consignation" as a motion for consignation and denied the same on the ground that respondent Sia was already issued a Definite Deed of Sale, hence rendering the matter moot and academic. On the same day, respondent judge issued another Order, this time cancelling TCT No. 17745 and ordering the Register of Deeds of Naga City to issue a new TCT in favor of Sia. Pursuant to this Order, TCT No. 20201 was issued in the name of Ruben Sia.

Upon learning that respondent deputy sheriffs executed in favor of Sia a Definite Deed of Sale, petitioner-lessees moved for the cancellation of said deed before the trial court. In two separate Orders both dated December 18, 1989, the trial court denied said motion, declaring that the cancellation of said deed is a matter that would be better threshed out in a separate proceeding, and denied for lack of merit petitioner-lessees’ motion for reconsideration of the Order dated December 14, 1989.

On December 20, 1989, respondent Sia filed an Ex-Parte Motion for the Issuance of a Writ of Possession over the subject property, which respondent judge granted.

Thus, on December 21, 1989, herein petitioners filed with respondent Court of Appeals a petition for certiorari and prohibition under Rule 65 of the Rules of Court with prayer for the issuance of a writ of preliminary injunction and/or restraining order from the orders of respondent judge. On December 22, 1989, the Sixteenth Division of the Court of Appeals granted the TRO. Oral arguments were heard and on January 23, 1990, the same Division issued the corresponding writ of preliminary injunction.

On August 13, 1990, the Third Division of the Court of Appeals rendered a Decision the dispositive portion of which reads:

In the wake of the lifting of the preliminary injunction, respondent Sia moved for the issuance of an alias writ of possession over the disputed property, which the trial court granted on August 28, 1990.

From the August 13, 1990 decision of the Court of Appeals Erlinda’s Urgent Motion for Reconsideration was denied in a Resolution promulgated on September 13, 1990.

Aggrieved, petitioner-lessees and petitioner Erlinda separately filed the herein petitions for review on certiorari which were docketed as G.R. Nos. 94617 and 95281, respectively.

In G.R. No. 95281, Erlinda assigns the following errors of respondent court:

In G.R. No. 94617, meanwhile, it is the position of petitioner-lessees that the writ of possession is void as against them because it violated their right to due process and was not issued pursuant to a final judgment in an ejectment case where they were properly impleaded.22 [Citing Roman Catholic Archbishop of Caceres vs. dela Cruz, 30 SCRA 881.] Thus, their Amended Petition23 [Rollo in G.R. No. 94617, 189.] points to the following errors of respondent court:

G.R. No. 94617 was originally assigned to the First Division of this Court and G.R. No. 95281 with the Third Division. However, both petitions having arisen from the same decision of the Court of Appeals, and there being no material inconsistencies in the issues raised and reliefs sought by Erlinda and petitioner-lessees, the cases were consolidated and assigned to the Third Division per Resolution dated February 18, 1991.24 [Ibid., 165.]

Preliminarily, let it be emphasized that the case was elevated to us by petition for review on certiorari under Rule 45 of the Rules of Court. While Judge Angel Malaya, sheriff Rosario Torrecampo and deputy sheriffs Anastacio Bongon and Roque Angeles were impleaded as respondents in the petitions, the appeal is technically restricted to a review of the decision of the Court of Appeals alone, based on petitioners’ assignment of errors. Misox

The decision of the Court of Appeals basically held that Erlinda, from whose right of redemption petitioner-lessees obtain, is not qualified to redeem the property in question. It was respondent court’s finding that at the time of the levy on execution on November 24, 1986, the property was under the exclusive ownership of Irene Mariano under TCT No. 7261, and as evidenced in the annotation at the back of TCT No. 6567 which states: "This Certificate of Title is cancelled in favor of Irene P. Mariano and TCT No. 7261 is issued by virtue of an affidavit of merger xxx ".25 [CA Decision; Rollo, 63.] The CA decision went on to say that between petitioner Erlinda and Raul Santos, it was Raul Santos who had the right to redeem as successor-in-interest to deceased judgment debtor Irene Mariano by virtue of the sale of the property in his favor which was registered on October 2, 1987. Because no redemption was made by Raul Santos until the expiration of the twelve-month period for redemption on December 7, 1989, respondent court concluded that the RTC did not abuse its discretion in issuing its contested orders, namely: (1) denying Erlinda’s motion for consignation of redemption money; (2) allowing the issuance of TCT No. 20201 to respondent Sia; (3) denying the motion to annul the Definite Deed of Sale in favor of Sia, as well as the motion for reconsideration of the same; and (4) allowing the issuance of a writ of possession to respondent Sia.

For all the factual intricacies of the instant case, its resolution essentially boils down to a determination of whether Erlinda Mariano was qualified to redeem the property.

Under Section 29, Rule 39 of the Rules of Court,26 [Now Section 27, Rule 39 of the Revised Rules of Court.] real property sold on execution may be redeemed by:

x x x

The "successor-in-interest" contemplated by the above provisions includes a person to whom the judgment debtor has transferred his right of redemption, or one to whom he has conveyed his interests in the property for purposes of redemption, or one who succeeds to his property by operation of law, or a person with a joint interest in the property, or his spouse or heirs.27 [Magno vs. Viola, 61 Phil. 80; reiterated in Cenas vs. Santos, 204 SCRA 53; de Castro vs. Intermediate Appellate Court, 165 SCRA 654; Gorospe vs. Santos, 69 SCRA 191.] A compulsory heir to the judgment debtor qualifies as a successor-in-interest who can redeem property sold on execution.28 [Palicte vs. Ramolete, 154 SCRA 132.] Maniks

As a legally adopted daughter of Irene Mariano, Erlinda had all the successional rights of a legitimate child29 [Art. 341, Civil Code.] to the property at the time of Irene Mariano’s death on June 26, 1988. Having taken the property subject to the decedent’s liabilities, she should not be prohibited from exerting efforts at ensuring its preservation, including the exercise of the statutory right of redemption.30 [Palicte vs. Ramolete, supra.] This was in fact the reasoning of the RTC in its Orders dated December 6, 1988 and December 8, 1989, in declaring Jose and Erlinda legal representatives of Irene in Civil Case No. R-570 and in upholding their right to redeem, since the heirs’ interest in the preservation of the estate and the recovery of the property is greater than anybody else’s, including the administrator’s who merely holds the property for the creditors and heirs of decedent.31 [Citing Palicte vs. Ramolete, supra; Records of the Case, 33-37, 93.]

Having upheld Erlinda’s right to redeem, we come now to why Raul Santos could not have had the right to redeem the disputed property, contrary to the conclusion of respondent court. In the first place, Raul Santos is not a party to the instant case, and while his interest in the property is being litigated in Civil Case No. 88-1506, it is in that case and not herein that such matter should be resolved. No man shall be affected by proceedings to which he is a stranger.32 [Matuguina Integrated Wood Products, Inc. vs. Court of Appeals, 263 SCRA 490; Polaris Marketing Corporation vs. Plan, 69 SCRA 93; See also Asset Privatization Trust vs. Court of Appeals, 300 SCRA 579.] Second, in holding Santos to be Irene’s successor-in-interest because of his being a subsequent vendee to the property, respondent court in effect ruled upon the validity of the Deed of Sale of April 15, 1975, a matter over which it had no jurisdiction to decide and which is properly the subject of the pending Civil Case No. 88-1506. Third, respondent court based the right to redeem upon the purported transfer of ownership to Santos of the property. The right of redemption is explicitly conferred by Section 29, Rule 39 of the Rules of Court on the judgment debtor and his successors-in-interest; it is not conditioned upon ownership of the property but by virtue of a writ of execution directed against the judgment debtor.33 [CMS Stock Brokerage, Inc. vs. Court of Appeals, 275 SCRA 790.]

Also, regardless of the validity of the Deed of Sale of April 15, 1975, it is evident that the lien created by the levy on execution in Civil Case No. R-570 is superior to such subsequently registered private sale. While the Deed of Sale in Santos’s favor was ostensibly executed as early as April 15, 1975, it was not registered until October 2, 1987, or after the levy on execution on November 24, 1986. This Court has invariably held that

Thus, the only question remaining insofar as concerning petitioner Erlinda is whether she exercised her right to redeem properly and seasonably.

The right of redemption over property sold on execution may be exercised within twelve months35 [Sec. 30, Rule 39 of the Rules of Court. Under Section 28, Rule 39 of the 1997 Rules of Court, effective July 1, 1997, the period of redemption was changed from twelve months to one year, counted from the date of registration of the certificate of sale.] from the date of registration of the certificate of sale36 [Gorospe vs. Santos, supra; Reyes vs. Manas, 29 SCRA 736; Agbulos vs. Alberto, 5 SCRA 790; Garcia vs. Ocampo, 105 Phil. 1102.]. Where tender is made of the redemption price within the period to redeem and the same is refused, the same constitutes a valid exercise of the right to redeem and it is not necessary that it be followed by the deposit or consignation of the money in court.37 [Co vs. Philippine National Bank, 114 SCRA 842. See also de Castro vs. Intermediate Appellate Court, 165 SCRA 654; Enage vs. Vda. De Escaño, 38 Phil. 687.] No interest after such tender is demandable on the redemption money.38 [Co vs. PNB, supra.]

In the instant case, petitioner Erlinda exercised her right to redeem as of November 22, 1989 (or before the expiration of the twelve-month period of redemption on December 7, 1989) when she tendered a cashier’s check equivalent to the redemption price to private respondent Sia. Notably, the tender was effected before the RTC, Branch 28 of Camarines Sur issued a TRO on December 1, 1989 enjoining Erlinda from redeeming the property. In point of time, nothing prevented Erlinda from redeeming the property on November 22, 1989; besides, the TRO is clearly void and of no effect as to her, since it was issued in favor of Godofredo Uy on the basis of his being the assignee to the redemption rights of Jose Mariano over the property. Such ground does not and should not impinge upon Erlinda’s own right of redemption.

In declaring as valid Erlinda’s redemption of the property, we find it no longer necessary to pass upon the other assignments of error in G.R. No. 95281.

For their part, petitioner-lessees raise no claim to redeem the property as assignees of Erlinda, and rightly so; no right of redemption accrued in their favor by reason of the Deeds of Sale dated November 23, 1989 since the deeds clearly intended to convey the property itself, conditioned upon the successful redemption thereof by Erlinda from Sia, and not the right to redeem the same. The pronouncements in this decision, therefore, shall be without prejudice to petitioner-lessees’ enforcement of their rights under the aforecited Deeds of Sale. Manikx

As for the matters raised in G.R. No. 94617, in addition to the fact that the writ of possession issued against petitioner-lessees is void by reason of Erlinda’s timely and valid redemption, we cite the discussion in Malonzo vs. Mariano, 173 SCRA 667,39 [See also Perater vs. Rosete, 129 SCRA 508; Gozon vs. dela Rosa, 77 Phil. 919; Santiago vs. Sheriff of Manila, 77 Phil. 740.] that a writ of possession may issue against occupants of a property subject of execution who derive their right of possession from the judgment debtor upon motion in the execution proceedings and without need of a separate ejectment action, provided that the occupants are afforded an opportunity to explain the nature of their possession, on which basis the writ of possession will be denied or granted. In this case, the RTC’s granting of the writ of possession ex parte violates petitioner-lessees’ right to due process. Consequently, we reverse respondent court insofar as it upheld the said RTC Order.

WHEREFORE, the Decision of the Court of Appeals in CA-G.R. SP No. 19533 is ANNULLED and SET ASIDE, and a new one entered ORDERING the Provincial Sheriff of Camarines Sur to accept payment of redemption money for the property levied in Civil Case No. R-570 from petitioner Erlinda Mariano, computed as of November 22, 1989, and upon receipt thereof, to execute and deliver to Erlinda Mariano a duly accomplished certificate of redemption of said property. The Definite Deed of Sale issued in favor of private respondent Ruben Sia and the alias writ of execution issued pursuant to the Order of the Regional Trial Court, Branch 22 of Camarines Sur dated August 28, 1990 are NULLIFIED. Costs against private respondent.

SO ORDERED. Nexold

Melo, (Chairman), Panganiban, and Purisima, JJ., concur.

Vitug, J., abroad, on official business.