Jalbuena v. Gellada

A.M. No. P-93-995 (July 12, 1996)

Jalbuena accused Gellada and Fuentebella of mishandling funds; court fined them P1,000 each.

Facts:

Complainant Roberto Jalbuena filed a complaint against respondents Edgardo Gellada, Clerk of Court IV and Ex-Officio Sheriff, and Rex Fuentebella, Sheriff III, both of the Municipal Trial Court in Bago City, Negros Occidental. The complaint stemmed from the execution of money judgments in two civil cases: Civil Case No. 1184, where Ilawod Farmer's Multi-Purpose Cooperative, Inc. sought to collect a P6,500 crop loan from Jalbuena, and Civil Case No. 1187, where the same cooperative sought to collect P7,250 from Jalbuena's wife, Magdalena.

Judgments were rendered against the Jalbuenas, leading to the issuance of writs of execution. The writ against Magdalena was issued on October 8, 1991, and served on October 16, 1991, while the writ against Roberto was issued on October 16, 1991, and served on October 17, 1991. The deputy sheriff levied on a motorized tricycle parked at the Jalbuenas' residence, which was claimed by Norkis Distributors, Inc. as its property due to an installment sale and a chattel mortgage executed by Jalbuena.

Despite the third-party claims, the judgment creditor Ilawod filed indemnity bonds to cover potential damages from the sale of the properties. Notices of sale were issued, and an auction sale occurred on August 31, 1992, where Ilawod won the bidding for both the motorcycle and the sidecar. The motorcycle was sold for P34,975, and the sidecar for P10,000. The proceeds were distributed, with Norkis receiving the unpaid balance of the motorcycle, and Ilawod receiving the remaining amounts.

Jalbuena raised several complaints, including improper solicitation of payment from him, lack of notification regarding the auction sale, failure to provide copies of the auction proceedings, and the claim that the total sale amount exceeded the judgment debts, resulting in an excess that should have been returned to him.

Legal Issues:

  1. Did the respondents follow the proper procedures in executing the judgments in Civil Case Nos. 1184 and 1187?
  2. Was the complainant entitled to the excess proceeds from the auction sale?
  3. Were the respondents guilty of dishonesty, grave misconduct, and corrupt practices?

Arguments:

Complainant's Arguments:

  • The respondents failed to notify him of the auction sale and did not provide copies of the auction proceedings.
  • The total judgment debts were P17,150, while the properties were sold for P45,000, indicating an excess of P27,850 that should have been returned to him.
  • The clerk of court violated Section 17, Rule 39 of the Rules of Court by remitting the amount of P34,975 to Norkis instead of returning the excess to him.

Respondents' Arguments:

  • The respondents claimed that the auction sale complied with the rules, asserting that notices were posted in conspicuous places and served to the complainant.
  • They argued that the Jalbuenas were aware of the auction sale but refused to acknowledge receipt of the notices.
  • The respondents maintained that the proceeds from the auction sale were properly accounted for and that they did not benefit personally from the transactions.

Court's Decision and Legal Reasoning:

The court found that the respondents failed to adhere to the procedural requirements set forth in Sections 15 and 17 of Rule 39 of the Rules of Court. Specifically, the court noted that the excess proceeds from the sale of the properties should have been returned to the complainant rather than being remitted to the third-party claimant, Norkis. The court emphasized that the purpose of levying on the property is to satisfy the judgment, and any excess must be delivered to the judgment debtor unless otherwise directed by the court.

While the court acknowledged that the respondents had not personally profited from the auction sales and that they had accounted for the proceeds, it still held them administratively liable for their failure to follow the proper procedures. The court imposed a fine of P1,000 on each respondent and issued a stern warning against future violations.

Significant Legal Principles Established:

  • The execution of money judgments must strictly adhere to the procedural rules outlined in the Rules of Court, particularly regarding the treatment of excess proceeds from the sale of levied properties.
  • The rights of third-party claimants must be balanced with the rights of judgment debtors, and any excess proceeds from an auction sale must be returned to the judgment debtor unless otherwise ordered by the court.