Enforcement of Civil Case Judgment in the Philippines Justice Mar Del Castillo

Transcription

1 Enforcement of Civil Case Judgment in the Philippines Justice Mar Del Castillo Good morning, fellow delegates and participants, sà-wàt-dee. As the theme of our conference is all about the enforcement of a judgment in a civil case, the first thing that entered my mind is a saying that aptly fits someone who lost a case in court and is ordered to pay a judgment amount. The only man who sticks closer to you in adversity than a friend is a creditor. My presentation today shall be a brief overview of the Philippines judicial process in executing a final judgment rendered by the court. The rules on execution and satisfaction of judgment in civil cases are provided in Rule 39 of the Rules of Court of the Philippines. It is widely acclaimed that execution is the fruit and the end of the suit and aptly called the life of the law. A judgment if left unexecuted would be nothing but an empty victory for the prevailing party. Execution is a judicial process wherein a writ is issued to an officer, usually the sheriff, authorizing and requiring him to execute the judgment of the court. Execution of the judgments may be granted under either of two aspects: First, as a matter of right. Execution becomes a matter of right for the prevailing party when the period to appeal has expired and no appeal has been duly perfected. Under this situation, it becomes the mandatory or ministerial duty of the court to issue, on motion of the prevailing party, a writ of execution to enforce the judgment which has already attained finality. No prior hearing on the motion is necessary. Second, at the discretion of the court. This is an instance where the court may issue the writ even before the judgment has become executory, that is before the lapse of the period to appeal. This is what we call execution pending appeal or discretionary execution. The grant of the writ under this situation must be firmly grounded upon good reasons to be stated in a special order. For instance, when the judgment obligors were exhausting their resources and have no other property to answer for their obligation as stated in the judgment. In case the judgment was executed while the case was on appeal and the appealed judgment was reversed, the court, on motion, may issue orders of restitution or reparation of damages as equity and justice may warrant under the circumstances. An appeal duly perfected will generally stay the execution of a judgment. Our rules recognize certain judgments which are decreed to be immediately executory, as judgments in action for injunction, receivership, accounting and support which shall not be stayed by an appeal taken unless otherwise ordered by the trial court.

2 - 2 - In our jurisdiction, the manner of execution and satisfaction of judgment is as follows: A) If the execution be against the property of the judgment obligor, to satisfy the judgment, with interest, out of the real or personal property of such judgment obligor; B) If it be against real or personal property in the hands of personal representatives, heirs, devisees, legatees, tenants or trustees of the judgment obligor, to satisfy the judgment with interest, out of such property; C) If it be for the sale of real or personal property, to sell such property, describing it and apply the proceeds in conformity with the judgment, the material parts of which shall be recited in the writ of execution; D) If it be for the delivery of the possession of real or personal property, to deliver the possession of the same, describing it, to the party entitled thereto and to satisfy any costs, damages, rents or profits covered by the judgment out of the personal property of the person against whom it was rendered and if sufficient personal property cannot be found, then out of the real property; E) In all cases, the writ of execution shall specifically state the amount of the interest, costs, damages, rents or profits due as of the date of the issuance of the writ, aside from the principal obligation under the judgment. Final judgment may be satisfied from any kind of property of the judgment obligor, not exempt from execution. In the case of judgment for money, the execution shall be carried out by demanding from the judgment obligor the immediate payment to the judgment obligee the full amount stated in the writ of execution. The payment by the judgment obligor shall be in cash, or certified bank check payable to the judgment obligee. In case there is an excess of payment, the excess shall be returned to the judgment obligor. Another manner of executing a money judgment is by means of levy and garnishment of debts and credits due to the judgment obligor. The levy on execution of a judgment consists in the act or acts by which an officer sets apart or appropriates for the purpose of satisfying the command of the writ, a part or the whole of the judgment debtor s property. A lawful levy on execution is essential for the validity of an execution sale. Without a valid levy, the sale is void. Where the judgment obligor cannot satisfy all or part of the obligation in any of the forms allowed for payment, the procedure in the enforcement of execution of a money judgment by levy is as follows:

3 - 3-1) The sheriff shall levy upon the properties of the judgment obligor of every kind and nature which may be disposed for value and not otherwise exempt from execution, giving the latter the option to choose which property or part thereof should be levied upon if sufficient to satisfy the judgment. 2) If the judgment obligor fails to make a choice, the sheriff shall just levy on the personal properties if any, and then on the real properties if the personal properties are insufficient to answer for the judgment. 3) The sheriff must sell only the property so levied or such part of the property as is amply sufficient to satisfy the judgment and lawful fees. The moment the property of the judgment obligor is levied upon, the judgment obligee acquires a lien over all the rights, title and interest which the former may have over the levied property at the time of the levy. The lien in favor of the judgment obligee is always subject to whatever liens or encumbrances the levied property may bear at the time of the levy. Garnishment is the process of attaching money or goods due a defendant in the hands of a third party. It is effected by the sheriff by levying on debts due the judgment obligee and other credits, including bank deposits, financial interest, royalties, commissions and other personal property not capable of manual delivery in the possession or control of third parties. The levy shall be made by serving notice upon the person called the garnishee, owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. Just like the levy on execution, the garnishment shall cover only such amount as will satisfy the judgment and all lawful fees. In our jurisdiction, not all the properties of the judgment obligor of whatever kind and nature are subject to execution for the satisfaction of a judgment rendered in a civil case. There are some properties which are exempt from execution such as but not limited to the following: (a) The judgment obligor s family home as provided by law, or the homestead in which he resides, and land necessarily used in connection therewith; (b) Ordinary tools and implements personally used by him in his trade, employment, or livelihood; (c) The professional libraries and equipment of judges, lawyers, physicians, pharmacists, dentists, engineers, and other professionals not exceeding three hundred thousand pesos in value; and, (d) The right to receive legal support, or money or property obtained as such support, or any pension or gratuity from the Government.

4 - 4 - All sales of property pursuant to an execution must be made at public auction and to the highest bidder with prior written notice to the public and to the judgment obligor. Sometimes a person other than the judgment obligor asserts a claim of ownership or some possessory rights over the property subject of the sale, serving an affidavit of his title thereto to the sheriff and the judgment obligee. This is called a third-party claim. In situations like this, the sheriff shall not be bound to keep the property unless the judgment obligee files a bond duly approved by the court, equivalent to or not less than the value of the property levied on. In case of denial of the third-party claim or the sale proceeded by reason of the bond, the remedy of the third-party claimant is to file before a competent court, a separate reinvindicatory action against the judgment obligee or the purchaser of the property after the public auction sale. There are moments when the highest bidder fails to pay the amount of his bid. This is what we call unlawful intervention in execution proceedings. When this arises, the sheriff may resell the property to another highest bidder without incurring any responsibility for any loss occasioned thereby. A purchaser of personal property capable of manual delivery who has paid the amount of his bid is entitled to immediate possession of the property purchased and, if desired, a certificate of sale can be executed and delivered to him that day. The sale of such property conveys to the purchaser all the rights which the judgment obligor has in such property on the day of the levy on execution or attachment. If the personal property subject of the execution sale is not capable of manual delivery, the sheriff conducting the auction must execute and deliver to the purchaser a certificate of sale conveying to the purchaser all the rights which the judgment obligor has in the property at the time the execution or attachment was levied. Regarding the sale of real property, the sheriff must deliver to the purchaser a certificate of sale. The certificate must be registered in the registry of deeds of the place where the property is situated. Take note that there is a difference between the delivery of the certificate of sale of real property when the sale is made and the deed of sale executed by the sheriff at the expiration of the period of redemption. The certificate of sale serves merely as a memorial of the fact of sale to the purchaser named in the certificate as the buyer. It does not operate as an absolute transfer of the property as to possession much less ownership of the same. The deed of sale executed by the sheriff after the expiration of the period of redemption on the other hand, is the effective conveyance of the property purchased which entitles the purchaser to possession over the same. The registration of the certificate of sale before the concerned Registry of Deeds is essential for the validity of the sale. Where it is not registered, the period of redemption

5 - 5 - does not commence to run, for the period is to be counted not from the date of the sale but from the time of registration of the sale in the Registry of Deeds. Our rules of procedures do not provide a right of redemption where the property sold at a judicial sale is personal property. A right of redemption may be exercised only when the property sold is real property. The time for redemption depends on whether the person exercising the right of redemption is the judgment obligor or his successor-in-interest or a redemptioner. If he is the judgment obligor, he has one year from the date of the registration of the certificate of sale within which to redeem. If he is a redemptioner however, the period to redeem depends on whether he is a first or a subsequent redemptioner. If he is a first redemptioner, he has one year to redeem and if he is a subsequent redemptioner, he has 60 days from the last redemption. Our rule provides that if no redemption is made within one year from the date of registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property. Where the purchaser of real property or his successor-in-interest fails to recover possession of the property, he may file a motion in the same action or in a separate action, to recover from the judgment obligee the amount paid by him with interest, at the judicial sale. Where the judgment obligee s efforts to execute on the properties of the judgment obligor remains unsatisfied in whole or in part, our rules provide ample supplemental remedies to protect his rights against the property of the judgment obligor. The Court which rendered the judgment shall issue an order for the judgment obligor to appear before it or before a duly appointed commissioner and to be interrogated concerning his property and income. Similar orders may also be issued requiring the appearance of any person, corporation or other judicial entity alleged to have property belonging to the judgment obligor or is indebted to him, for interrogation concerning the same. The judgment obligee may also apply to the court, the appointment of a receiver of the property of the judgment obligor and also to forbid a transfer or other disposition of his property not exempt from execution. When a judgment is satisfied as shown from the return of the writ of execution or upon the filing of an admission to the satisfaction of the judgment by the judgment obligee or by his counsel, an entry acknowledging or certifying such fact should be made in the court docket by the clerk of court. Considering the Philippine judiciary s commitment to the rule of law, the Philippines Civil Procedure covering execution of judgments, domestically - speaking, is a comprehensive one. While we don t claim it to be perfect, the ultimate goal of these rules is to ensure that a judgment shall not end up being illusory. Currently, efforts are

6 - 6 - being made to update and amend the current rules in order to keep up and remain responsive with the fast-paced and dynamic world we are in. P.G. Wodehouse, an English author, once wrote: The ideas of debtor and creditor as to what constitutes a good time never coincide. And, in reply to him, I say: That s why we have enforcement of actions. Thank you and have a good day! REFERENCES: 1) Rule 39 of the Rules of Court of the Philippines 2) Remedial Law Compendium Vol. One by Florenz D. Regalado, Senior Associate Justice (Ret.), Supreme Court of the Philippines 3) Rules of Court in the Philippines with notes and comments by Ruperto G. Martin