Evangelista vs. La Proveedora, Inc.

Where a judgment debtor dies before actual levy of execution on his property, the judgment for money may no longer be enforced by execution but must instead be filed as a claim against the decedent's estate in the settlement proceedings. The cut-off date is the date of actual levy: if death occurs after levy, the levied property may be sold; if before, the money judgment must be presented as a claim against the estate, though it need no longer be proved, the judgment itself being conclusive.

La Proveedora, Inc. was the plaintiff in Civil Case No. 2516 of the Court of First Instance of Pampanga, Branch II (Guagua), a collection suit against Manuel Abad Santos for unpaid rentals. Santos was the judgment debtor whose estate became the subject of intestate proceedings in Special Proceeding No. A-40 before the CFI of Pampanga, Branch II (Angeles City). Petitioner Hollanda A. S. Evangelista was appointed special administratrix of Santos's estate and brought this certiorari petition to annul the execution proceedings conducted against Santos's properties after his death.

La Proveedora, Inc. filed Civil Case No. 2516 against Manuel Abad Santos in the Court of First Instance of Pampanga, Branch II (Guagua), seeking collection of unpaid rentals. On August 23, 1969, the court rendered judgment ordering Santos to pay La Proveedora ₱18,000 representing the unpaid difference in rent from February 1957 to January 1965, plus ₱2,000 as attorney's fees, with legal interest from the date of judgment and costs.

On June 2, 1970, Santos died in Angeles City. No levy of execution had been made on any of his properties at the time of his death. Thereafter, on September 30, 1970, the respondent court issued a writ of execution. Pursuant to that writ, respondent Provincial Sheriff levied on a parcel of land and the house situated thereon, both owned by Santos and covered by Transfer Certificate of Title No. 22937-M of the land records of Angeles City. The auction sale was scheduled for November 23, 1970.

In the meantime, an intestate proceeding for the settlement of Santos's estate was filed in the CFI of Pampanga, Branch II (Angeles City), docketed as Special Proceeding No. A-40. On November 23, 1970, petitioner Hollanda A. S. Evangelista was appointed special administratrix of the intestate estate. Even prior to her appointment, on November 11, 1970, she had been notified of the writ of execution and the scheduled auction sale. She informed the respondent Provincial Sheriff of the judgment debtor's death and demanded that he desist from proceeding with the sale. She followed this with an urgent motion in court to recall the writ of execution, but the motion was denied and the sale was carried out, with La Proveedora, Inc. emerging as the highest bidder. None of the respondents filed an answer to the certiorari petition before the Supreme Court.

• Nullity of Execution After Death: Petitioner contended that the writ of execution and all proceedings conducted pursuant thereto were null and void because the judgment debtor, Manuel Abad Santos, had died before any levy was effected on his properties, requiring the money judgment to be filed as a claim against his estate in the settlement proceedings.
• Demand to Desist: Petitioner had notified the respondent Provincial Sheriff of Santos's death and demanded that the sheriff desist from proceeding with the auction sale, and thereafter moved the court to recall the writ of execution, but both efforts were rebuffed.

• Validity of Execution After Death of Judgment Debtor: Whether a writ of execution may validly issue and be enforced against the properties of a judgment debtor who died before actual levy of execution was made on such properties.

• Validity of Execution After Death of Judgment Debtor: No. The writ of execution and all proceedings conducted pursuant thereto, including the auction sale, were null and void because the judgment debtor's death preceded the actual levy, requiring the money judgment to be presented as a claim against the estate in the settlement proceedings under Section 5, Rule 86 of the Rules of Court.

• Validity of Execution After Death of Judgment Debtor: Section 7(c) of Rule 39 authorizes the sale of property levied upon for the satisfaction of a judgment only where the judgment debtor dies "after execution is actually levied upon any of his property." The operative cut-off date is therefore the date of actual levy. If the judgment debtor dies after levy, the levied property may be sold and the officer must account to the executor or administrator for any surplus. If the judgment debtor dies before levy, as in this case, the money judgment must be presented as a claim against the estate in the settlement proceedings under Section 5 of Rule 86. While the judgment itself remains conclusive and need no longer be proved, the judgment creditor must share the estate with other creditors, subject only to such preferences as the law provides. Because Santos died on June 2, 1970, and the levy occurred only on or after September 30, 1970, the execution and subsequent auction sale were without legal basis and therefore null and void.

• Cut-off Date for Execution Upon Death of Judgment Debtor — The decisive date for determining whether execution may proceed against a judgment debtor's property is the date of actual levy. Under Section 7(c) of Rule 39, if the judgment debtor dies after execution is actually levied upon any of his property, the levied property may be sold for the satisfaction of the judgment, and the officer must account to the executor or administrator for any surplus. If the judgment debtor dies before levy, the money judgment must be filed as a claim against the estate in the settlement proceedings under Section 5 of Rule 86. The judgment remains conclusive and need not be separately proved, but the judgment creditor shares the estate with other creditors, subject only to statutory preferences. In this case, because Santos died before any levy was effected, the sheriff's auction sale was null and void.

• "In other words, the cut-off date is the date of actual levy of execution. If the judgment debtor dies after such levy, the property levied upon may be sold; if before, the money judgment must be presented as a claim against the estate, although of course the same need no longer be proved, the judgment itself being conclusive." — This passage articulates the controlling rule distinguishing valid execution after levy from the requirement to file a claim against the estate when death precedes levy.

• "Since in this case the death of the deceased Manuel Abad Santos preceded the levy of execution on his properties, the judgment against him should be presented as a claim against his estate, and the sale at auction carried out by the sheriff is null and void." — This is the ratio decidendi applying the cut-off rule to the facts, establishing the nullity of the sheriff's sale.

• Section 7(c), Rule 39, Rules of Court — Governs execution in case of death of a party. Provides that where the judgment debtor dies after execution is actually levied upon any of his property, the same may be sold for the satisfaction of the judgment, and the officer making the sale shall account to the corresponding executor or administrator for any surplus. Applied to determine that because Santos died before levy, this provision did not authorize the sale.
• Section 5, Rule 86, Rules of Court — Requires that a judgment for money against the decedent must be filed with the court in the proceeding for the settlement of the estate. Applied as the proper remedy when the judgment debtor dies before levy: the money judgment must be presented as a claim against the estate, though it need no longer be proved, the judgment being conclusive.

Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo, Villamor, and Makasiar, JJ., concurred.