EFFECTIVE PUBLIC AUCTION in the Philippines. Panelist: Justice Japar B. Dimaampao Court of Appeals Manila, Philippines
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1 EFFECTIVE PUBLIC AUCTION in the Philippines Panelist: Justice Japar B. Dimaampao Court of Appeals Manila, Philippines
2 Rule 39, Section 9, Rules of Court WRIT OF EXECUTION of PERSONAL PROPERTY (a) IMMEDIATE PAYMENT ON DEMAND Judgment Obligor shall pay in cash through (a1) Certified bank check payable to judgment obligee or (a2) Other form of payment to judgment obligee If Judgment Obligee or his representative is not present to receive payment, payment shall be made to the Executing Sheriff who shall turn it over to the Clerk of Court which issued the writ or if the same is not practicable, deposit it to a fiduciary account in the nearest government depository bank of the Regional Trial Court of the locality
3 The Clerk of Court arranges the remittance of the deposit to the account of the court that issued the Writ. The Clerk of Court which issued the Writ shall deliver payment to judgment obligee. IN CASE OF EXCESS: return to the judgment obligor In no case shall the executing sheriff demand payment by check payable to him.
4 The Court may order: Rule 39, Section 40, Rules of Court 1. Any property of the judgment obligor, or money due him, not exempt from execution, to be applied to the satisfaction of the judgment; or, 1. Judgment obligor to pay judgment in fixed monthly installments if it appears that his earnings are more than necessary for the support of his family.
5 (b) SATISFACTION BY LEVY (if payment is not fully satisfied): Levy is the act/s whereby the Sheriff sets apart or appropriates a part or whole of the property of the judgment obligor for purposes of prospective execution sale The Sheriff shall levy upon the properties of the judgment obligor of every kind and nature which may be disposed of for value and not otherwise exempt from execution. Judgment obligor has the option to immediately choose which property or part thereof may be levied upon If the judgment obligor does not exercise this option, the Sheriff shall first levy personal properties, if any, then real properties if personal properties are insufficient Sheriff shall sell only a sufficient portion of the real or personal property.
6 (c) GARNISHMENT OF DEBTS AND CREDITS not capable of manual delivery Sheriff may levy on debts due the judgment obligor and other personal property not capable of manual delivery. (The act of appropriation by the Sheriff is known as garnishment.) Q: HOW? A: By serving notice upon the person owing such debts or having the same in his possession or control such credits to which the judgment obligor is entitled. Q: WHAT is the duty of the garnishee? A: Makeawrittenreporttothecourtwithinfive(5)daysfromserviceofthe notice of garnishment stating whether or not the judgment obligor has sufficient funds to satisfy judgment. If not sufficient, garnishee shall report how much funds he holds for the judgment obligor. Q: HOW delivery to the judgment obligee may be made? A: The garnished amount in cash or certified bank check in the name of the judgment obligee shall be delivered directly to him within 10 days from notice on said garnishee requiring notice.
7 WRIT OF EXECUTION of REAL PROPERTY Rule 39 Section 10 (c) (d) The Sheriff shall demand that the person against whom the judgment for delivery or restitution of real property is rendered and all persons claiming rights under him to peaceably vacate the property within three (3) working days and restore possession thereof to the judgment obligee. The court may order a Writ of Possession if the party obliged to deliver possession of the property refuses to peaceably vacate and surrender possession. If the property subject of execution contains improvements constructed or planted by the judgment obligor or his agent, improvements on the real property shall not be destroyed, demolished or removed without special order of the court, issued upon motion of the judgment obligee after due hearing and after he has failed to remove the same within reasonable time fixed by the court
8 RETURN OF WRIT OF EXECUTION Rule 39, Section 14 Writ of Execution shall be returnable to the court issuing it immediately after judgment has been satisfied in part or full Q: What are the effects if judgment is not satisfied in full within 30 days after receipt of writ? A: (1) Sheriff shall report to the court and give reasons therefor; (2) Writ of Execution shall continue in effect during the period within which judgment may be enforced by motion; and, (3) Sheriff shall make a report every 30 days on the proceedings taken thereon until judgment is satisfied in full or its effectivity expires.
9 PUBLIC AUCTION (Judicial Sale Proper)
10 1. Posting of Notice 2. Written Notice of Sale 3. Public Auction Sale Procedure 4. Procedure in Case of Excess of Deficiency 5. Adjournment of Sale 6. Proceedings Where Property is Claimed by a Third Person 7. Remedies After Expiration of Redemption Period
11 I. POSTING OF NOTICE A) Posting of Notice B) Where C) How long Personal Property in 3 public places preferably in conspicuous areas of municipality of city hall post office and public market in the municipality/city where sale is to take place Perishable reasonable time depending on: (a) character and, (b) condition of the property not less than 5 days Not Perishable Real Property in 3 public places preferably in conspicuous areas of municipality or city hall post office and public market in the municipality/city where city is to take place 20 days Written notice of sale given to judgment obligor 3 days before sale Additional Requirement Sec 15 (c) Rules of Court 1. Notice of Sale of Property which must describe property to be sold and where property is to be sold 2. If PhP 50, or more publication of notice once (1x) a week for two consecutive weeks in one newspaper of general circulation selected by raffle, whether in English, Filipino or major regional language published, edited and circulated
12 II. WRITTEN NOTICE OF SALE A) To Whom B) When Judgment Obligor Personal Property 3 days before sale Exception: Perishable property = notice may be given at any time before sale Judgment Obligor 3 days before sale Real Property C) How (Mode) same as personal service of pleadings D) What must the notice of sale contain (D1) Place (D2) Date and Exact Time of Sale Rule: agreed upon by the parties Exception: if no agreement, where the property is located Not earlier than 9 am not later than 2 pm Rule: agreed upon by the parties Exception: if no agreement, Office of the Clerk of Court of the Regional Trial Court/Metropolitan Trial Court which issued the Writ or as designated by the appellate court Not earlier than 9 am and not later than 2 pm
13 II. WRITTEN NOTICE OF SALE Personal Property Real Property BEFORE scheduled date of sale, judgment obligor can stop execution by paying the judgment obligee BEFORE scheduled date of sale, Judgment obligor can stop execution by paying judgment obligee NON-COMPLIANCE OF NOTICE REQUIREMENT Sheriff selling without complying with notice requirement is liable for punitive damages in the amount of PhP 5, (approx USD )
14 A) How B) To Whom C) When III. PUBLIC AUCTION SALE Personal Property Through public auction (1) must be sold within the view of those attending (2) in such parcels as are likely to bring the highest price Highest bidder At the exact date and time fixed in the notice Real Property Through public auction Highest bidder At the exact date and time fixed in the notice
15 III. PUBLIC AUCTION SALE Personal Property CONDUCT OF SALE Section 19, Rule 39 Rules of Court Real Property CONDUCT OF SALE Section 19, Rule 39 Rules of Court When such property consists of several known lots, judgment obligor may direct the ORDER in which personal property shall be sold Prohibition: Sheriff conducting the sale and his deputies cannot become purchaser or be interested directly or indirectly in any purchase at such sale. When sale of real property consisting of several known lots, they must be sold separately; When a portion of property is being claimed by a third person, he may require it to be sold separately. Prohibition: Sheriff conducting the sale and his deputies cannot become purchaser or be interested directly or indirectly in any purchase at such sale. IN CASE OF NON-PAYMENT BY HIGHEST BIDDER Section 20, 21 Officer may again resell property to the highest bidder and Sheriff is not responsible for any loss occasioned thereby IN CASE OF NON-PAYMENT BY HIGHEST BIDDER Officer may again resell property to the highest bidder and Sheriff is not responsible for any loss occasioned thereby Penalty against non-paying highest bidder: may be ordered to pay the amount of loss with costs and may punish him for contempt if he disobeys the order If judgment obligee purchases the property and there is no third-party claim, he need not pay the amount of the bid if it does not exceed the amount of his judgment. If there is, he shall pay only the excess
16 EXCESS IV. IN CASE OF EXCESS OR DEFICIENCY Personal Property Section19Rule39 Excess of property or proceeds shall be delivered to the judgment obligor or his authorized representative Section 19 Rule 39 Real Property Excess of property or proceeds shall be delivered to the judgment obligor or his authorized representative DEFICIENCY Section36Rule39 If judgment remains unsatisfied in whole or in part, the judgment obligee, at any timeafterreturnofwritofexecutionis made, is entitled to an order from the court to require judgment obligor to appear concerning his property and income at a specified time and place before the court which issued the judgment or before a commissioner. Proceedings may be had for the application of property and income of the judgment obligor towards the satisfaction of judgment. Limitation: Judgment obligor is not required to appear before court or commissioner outside province or city where he resides or is found. Section36Rule39 If judgment remains unsatisfied in whole or in part, the judgment obligee, at any time after return of writ of execution is made, is entitled to an order from the court to require judgment obligor to appear concerning his property and income at a specified time and place before the court which issued the judgment or before a commissioner. Proceedings may be had for the application of property and income of the judgment obligor towards the satisfaction of judgment. Limitation: Judgment obligor not required to appear before court or commissioner outside province or city which he resides or is found.
17 V. ADJOURNMENT OF SALE Personal Property Real Property Section 25 Rule 39 Rules of Court WHAT must be delivered to purchaser? The Sheriff making the sale must execute and deliver to the purchaser a CERTIFICATE OF SALE (Section 24, Rule 39 Rules of Court). Effect of issuance: Conveys to purchaser all rights which the judgment obligor had in such property as of the date of the levy on execution or preliminary attachment. Upon sale of real property, the Sheriff must give to the purchaser certificate of sale containing the following: 1. Description of property sold; 2. Price paid for each distinct lot/parcel; 3. Whole price paid by him; and, 4. Statement that right of redemption expires one (1) year from the date of registration of Certificate of Sale. Additional Requirement: Certificate must be registered in the registry of deeds of the place where property is located Purpose of registration: Unless registered, period of redemption does not begin to run.
18 VI. PROCEEDINGS WHERE A PROPERTY IS CLAIMED BY THIRD PERSON Personal Property Real Property Section 16 Rule 39 Rules of Court Section 16 Rule 39 Rules of Court Situation contemplated: If a third person makes an affidavit of his title adverse to the judgment obligor stating his grounds of his right or title and serves it to the Sheriff making the levy and to judgment obligee Effect: Sheriff shall not be bound to keep the property unless the judgment obligee, on demand of the Sheriff, files a bond approved by the court to idemnify the 3 rd party complainant (sum must not be less than the value of the property levied). No claim for damages for taking or keeping of the property may be enforced against the bond unless action is filed within 120 days from filing of the bond. Situation contemplated: If a third person makes an affidavit of his title adverse to the judgment obligor stating his grounds of his right or title and serves it to the Sheriff making the levy and to judgment obligee Effect: Sheriff shall not be bound to keep the property unless the judgment obligee, on demand of the Sheriff, files a bond approved by the court to idemnify the 3 rd party complainant (sum must not be less than the value of the property levied). No claim for damages for taking or keeping of the property may be enforced against the bond unless action is filed within 120 days from filing of the bond.
19 VII. REMEDIES AFTER REDEMPTION PERIOD LAPSES Personal Property Real Property -NONE - (1) Revival on judgment (Section 34 Rule 39) by motion in the same action if purchaser of real property sold on execution fails to recover possession or is evicted therefrom on account of: (a) irregularities in the proceedings of sale; (b) judgment has been reversed or set aside; (c) property is exempt from execution; and, (d) third party has vindicated his claim to the property Effect: Same force and effect as an original judgment (1) Separate action to recover To recover from judgment obligee the amount paid at the judicial sale NOTE: It is not the Certificate of Sale but the Deed of Sale executed by the Sheriff at the expiration of the period of redemption which is constitutes as effective conveyance of property.
20 Thank you and God Bless!!!
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