Cometa vs. Court of Appeals

The right of redemption may be exercised beyond the prescribed statutory period where gross inadequacy of the purchase price shocks the conscience and procedural irregularities mark the execution sale, as rules of procedure must yield to substantial justice and equity.

Jose Franco obtained a money judgment against Zacarias Cometa for P57,396.85. To satisfy this judgment, the sheriff levied and sold at public auction two of Cometa's commercial lots in Guadalupe, Makati, to Franco for the exact judgment amount. The lots were conservatively valued at P500,000.00. Cometa and Herco Realty, to whom Cometa had transferred the lots prior to the sale, sought to annul the levy and sale, arguing that the sheriff failed to exhaust personal properties, sold the lots en masse instead of separately, and that the price was grossly inadequate. The annulment case was eventually dismissed for failure to prosecute, resulting in the finality of the levy and sale's validity.

• The Money Judgment and Execution Sale: On July 2, 1976, the Court of First Instance of Rizal awarded Jose Franco P57,396.85 in damages against Zacarias Cometa. The judgment became final on March 9, 1978. A writ of execution was issued, and the sheriff levied three commercial lots owned by Cometa in Guadalupe, Makati. On October 17, 1978, two of the lots were sold at public auction to Franco for P57,396.85. The certificate of sale was registered on January 25, 1980.
• The Annulment Case: On November 17, 1981, Herco Realty filed Civil Case No. 43846 to annul the levy and sale, alleging prior transfer of ownership, the sheriff's failure to exhaust personal properties, the en masse sale of the lots, and gross inadequacy of price (P500,000.00 value sold for P57,396.85).
• The Writ of Possession Dispute: Franco moved for a writ of possession in 1983. The RTC initially granted it but reconsidered, deeming it premature due to the pending annulment case. Franco elevated the matter to the Intermediate Appellate Court (IAC), which granted the writ. In Cometa v. IAC (G.R. No. L-69294), the Supreme Court reversed the IAC, withholding the writ pending resolution of the annulment case. The Court noted that redemption is inconsistent with claiming invalidity but emphasized the gross inadequacy of the price as an equitable concern.
• Dismissal of the Annulment Case and Subsequent Redemption Attempt: The RTC dismissed Civil Case No. 43846 on July 21, 1993, for lack of interest, a dismissal affirmed by the CA and the SC, becoming final on February 26, 1997. Franco again moved for a writ of possession. Cometa's heirs opposed and consigned the redemption price, interest, and taxes on December 4, 1997.
• Lower Court Rulings on Redemption: The RTC granted the writ of possession on June 8, 1998, ruling that filing an annulment suit after the redemption period expired does not suspend the period. The Court of Appeals affirmed, holding that allowing redemption after the finality of the dismissal would revive a lost right.

• Prior Supreme Court Pronouncement: Petitioners argued that Cometa v. IAC had already determined that Cometa retained the right to redeem the properties.
• Settled Jurisprudence on Redemption: Petitioners maintained that, absent the prior pronouncement, settled jurisprudence nonetheless supports their right to redeem.
• Liberal Construction of Redemption Laws: Petitioners asserted that the law resolves all doubts in favor of the right to redeem, warranting a liberal construction in their favor.

• Statutory Period Lapsed: Respondent countered that under Section 30, Rule 39 of the Rules of Court, the right of redemption must be exercised within twelve (12) months from the registration of the certificate of sale, a period that had long expired.
• No Tolling of Expired Period: Respondent argued that questioning the validity of the sale after the redemption period had expired does not suspend the running of the period, as there is nothing left to suspend.
• Prevention of Abuse: Respondent maintained that allowing redemption at this juncture would create a mischievous legal consequence, serving as a device for a party who lost the right of redemption to revive it by filing an action to set aside the sale.

• Right of Redemption: Whether petitioners can still redeem the properties subject of the execution sale despite the lapse of the statutory 12-month redemption period.

• Right of Redemption: The right of redemption was upheld despite the lapse of the statutory period. The strict application of procedural rules was relaxed to serve the demands of substantial justice and equity. Compelling justifications warranted this exception: (1) the gross and patently iniquitous disparity between the judgment debt (P57,396.85) and the value of the prime commercial lots (P500,000.00); (2) the inadequacy of the price was shocking to the conscience, a recognized ground to set aside a judicial sale; (3) procedural irregularities tainted the sale, as the sheriff sold the lots en masse in violation of Section 21, Rule 39 of the Rules of Court; (4) laches and prescription cannot be wielded to defeat justice or perpetrate injustice; and (5) the policy of the law favors the original owner in redemption cases, and petitioners had demonstrated a sincere desire to redeem by consigning the redemption amount.

• Liberal Construction of Right of Redemption — The rule on redemption is liberally construed in favor of the original owner, the policy of the law being to aid rather than defeat the right of redemption. Courts have allowed parties to perfect their right of redemption even beyond the prescribed period under justifiable circumstances.
• Inadequacy of Price in Judicial Sales — Mere inadequacy of price per se will not set aside a judicial sale of real property. However, if the inadequacy is shocking to the conscience, such that the mind revolts at it and a reasonable man would not consent to it, the sale will be set aside.
• Equity vs. Laches and Prescription — While prescription and laches operate as bars in equity, they cannot be applied to defeat justice or perpetrate fraud and injustice. Courts will not be strictly bound by the statute of limitations or laches when doing so would result in manifest wrong or injustice.
• Relaxation of Procedural Rules — Rules of procedure are mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which results in technicalities that frustrate rather than promote substantial justice, must be avoided. A rigid application resulting in a manifest failure or miscarriage of justice justifies disregarding technicalities.

• "We interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed."
• "Technicality, when it deserts its proper office as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from courts."
• "It is the better rule that courts under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result."

• Cometa v. Intermediate Appellate Court, 151 SCRA 563 (1987) — Followed. The Court reiterated its prior observation regarding the gross inadequacy of the price and the inequity of depriving petitioners of their valuable property to satisfy a disproportionately small debt.
• Hermoso v. Court of Appeals, 300 SCRA 516 (1998) — Followed. Cited for the proposition that a law should not be interpreted so as to cause an injustice, and courts must find a balance between the word and the will of the law.
• Director of Lands v. Abarca, 60 Phil. 70 (1934) — Followed. Established that a judicial sale may be set aside where the inadequacy of the price is shocking to the conscience (e.g., land worth P60,000 sold for P867).
• Santiago v. Court of Appeals, 278 SCRA 98 (1997) — Followed. Cited for the doctrine that laches cannot be worked to defeat justice or perpetrate fraud and injustice.

• Section 15, Rule 39, Rules of Court (Execution of money judgments) — Applied to highlight procedural irregularity. It mandates that when there is more property of the judgment debtor than is sufficient to satisfy the judgment within the view of the officer, the officer must levy only on such part of the property as is amply sufficient. The sheriff's immediate levy on real properties without exhausting personal properties was questioned.
• Section 21, Rule 39, Rules of Court (How property sold on execution) — Applied to highlight procedural irregularity. It requires that real property consisting of several known lots must be sold separately. The sale of the lots en masse was a direct violation of this provision.
• Section 30, Rule 39, Rules of Court (Redemption period) — Discussed. Provides the 12-month period for redemption from the date of sale. While the Court acknowledged the period had lapsed, it relaxed the rule's application under the circumstances.

Davide, Jr., C.J., Puno, Kapunan, Pardo, JJ.