Oliva-De Mesa v. Acero, Jr.

G.R. No. 185064 (January 16, 2012)

SC upheld that Oliva-De Mesa couple missed their claims; Acero couple retains property ownership.

Facts:

The case involves a parcel of land located at No. 3 Forbes Street, Mount Carmel Homes Subdivision, Iba, Meycauayan, Bulacan, which was originally covered by Transfer Certificate of Title (TCT) No. T-76.725 (M) issued in the name of Araceli Oliva-De Mesa. The property was purchased by the petitioners, Araceli and Ernesto De Mesa, on April 17, 1984, while they were cohabiting prior to their marriage in January 1987. They constructed a house on the property and used it as their family home.

In September 1988, Araceli borrowed P100,000 from Claudio D. Acero, Jr., securing the loan with a mortgage on the property. A check issued by Araceli to Claudio for repayment was dishonored due to insufficient funds, leading Claudio to file a complaint for violation of Batas Pambansa Blg. 22 against the petitioners. The Regional Trial Court (RTC) acquitted the petitioners but ordered them to pay Claudio the loan amount with interest.

Subsequently, a writ of execution was issued, and the property was levied upon by Sheriff Felixberto L. Samonte. The property was sold at a public auction on March 9, 1994, with Claudio as the highest bidder. Claudio later leased the property to the petitioners and a third party, but they defaulted on the rent payments.

Claudio and his wife, Ma. Rufina Acero, filed an ejectment complaint against the petitioners, who claimed ownership of the property and denied being mere lessees. The Municipal Trial Court (MTC) ruled in favor of the Acero spouses, affirming Claudio's ownership based on the Torrens title issued in his name. The petitioners' appeal to the RTC was dismissed due to their failure to submit a required memorandum.

In a separate action, the petitioners filed a complaint to nullify TCT No. T-221755 (M) and other documents, asserting that the property was a family home exempt from execution under the Family Code. The RTC dismissed their complaint, and the Court of Appeals (CA) affirmed this decision, leading to the petitioners' appeal to the Supreme Court.

Legal Issues:

  1. Whether the petitioners are guilty of forum-shopping.
  2. Whether the lower courts erred in refusing to cancel Claudio's Torrens title TCT No. T-221755 (M) over the subject property.

Arguments:

  • Petitioners' Arguments:

    • The execution sale of the property was a nullity because it was a family home, which is exempt from execution under the Family Code.
    • They contended that the exemption does not require prior demonstration to the Sheriff before the execution sale.

  • Respondents' Arguments:

    • The petitioners were guilty of forum-shopping as the issues had already been determined in the ejectment case.
    • The petitioners failed to assert their claim of exemption from execution in a timely manner, thus waiving their right to claim the property as a family home.

Court's Decision and Legal Reasoning:

  1. Forum-Shopping:

    • The Supreme Court found that the petitioners were not guilty of forum-shopping. The issues in the ejectment case (possession) and the annulment case (ownership) were distinct. A judgment in an ejectment case does not bar an action regarding title to the property, as the determination of ownership in an ejectment case is provisional and not conclusive.

  2. Nullification of TCT No. T-221755 (M):

    • The Court affirmed the CA's decision to dismiss the petitioners' complaint for nullification. Although the property was deemed a family home, the petitioners failed to assert this claim at the time of the levy or within a reasonable time thereafter. The Court emphasized that the right to claim exemption from execution must be asserted by the debtor and cannot be presumed by the Sheriff. The petitioners' delay in claiming the exemption led to the presumption that they had waived their right.

Significant Legal Principles Established:

  • The distinction between issues of possession and ownership in ejectment cases and annulment of title cases.
  • The requirement for a party to assert claims of exemption from execution in a timely manner, specifically before the sale at public auction.
  • The principle that a family home is exempt from execution, but the claim for such exemption must be actively asserted by the debtor.