#10 THIRD DIVISION

G.R. No. 169444, September 17, 2008

PABLITO T. VILLARIN AND P.R. BUILDERS DEVELOPERS &
MANAGERS, INC., Petitioners,
vs.
CORONADO P. MUNASQUE, Respondent.
PONENTE: TINGA, J.

Facts:
On 10 July 2002 , respondent filed a Complaint for collection of
sum of money against petitioners in RTC Makati. On 20 July
2002, before the answer could be filed, the parties entered
into a compromise agreement wherein petitioners
acknowledged their obligation to respondent of P15M, with
monthly interest of P450K. To guarantee payment, all real
estate mortgages executed by petitioners in favor of Intra
Strata were assigned to respondent. The parties jointly moved
for the approval of the compromise agreement, which was
granted on 2 August 2002. Petitioners managed to pay only
P250K. Thus, upon motion, the RTC issued a writ of execution
on 29 October 2002.

On 30 October 2002, deputy sheriff issued notices of levy and

had the same annotated at the back of forty-four TCTs in the
name of petitioners. On 8 November 2002, Deputy Sheriff
issued "Notice of Deputy Sheriff's Sale on Execution" and
complied with the publication requirements. On 13 November
2002, the law firm, collaborating counsel with petitioners
counsel of record, Atty. Salamero, sent a letter complaining of
procedural lapses in the enforcement of the writ of execution
[Section 9 of Rule 39], and overlevy [8 parcels of land is
sufficient].

On 19 November 2002, petitioners moved to recall the notice

of levy and cancel the deputy sheriff's sale. Respondent
opposed contending that the day before the levy, Atty.
Salamero: (1) informed respondents counsel that they did
not have money to pay; (2) agreed to the immediate levy
provided that the auction sale be scheduled earlier than 20
November 2002. On 7 January 2003, the RTC Judge Dumayas
denied the motion. Thus, on 16 January 2003, Deputy Sheriff
conducted an auction sale. On 30 January 2003, petitioners
filed an omnibus motion to reconsider the RTC Order, to
declare null and void and recall the notice of levy, and the
auction sale. Judge Duamayas inhibited.

On 12 June 2003, the RTC Judge Pimentel declared null and

void the sheriff's sale and set aside the RTC 7 January 20113
Order. Respondent appealed to CA which, on 31 March 2005,
reversed Judge Pimentel, affirmed RTC 07 January 2003 Order,
and upheld the validity of the auction sale ruling that
petitioners, through Atty. Salamero and Santos, admitted to
respondent's counsel that they had no sufficient funds to pay;
and that they agreed that levy may proceed as long as the sale
would not be held earlier than 20 November 2002. Hence, the
present petition for review under Rule 45.

Issues:
1. Whether the failure of the deputy sheriff to first demand of
the judgment obligor payment of the judgment debt before
levying the judgment obligor's real properties without
allowing him to exercise his option to choose which of his
properties may be levied upon, and without first levying on
his personal properties, constitute a fatal procedural defect
resulting in the nullity of the levy and the subsequent
execution sale [this is the subject of petitioners letter of 13
November 2002]. [NO]
2. Whether or not there was overlevy of properties. [NO]

Ruling:

Petition is Denied. CA Affirmed.

Parties Arguments:
In the present petition, petitioners contend that Deputy
Sheriff Mendoza failed to comply with the provisions of Section
9, Rule 39 of the Rules of Court in implementing the writ of
execution. In levying on the 44 parcels of land, he allegedly
failed to (a) first make a personal demand on petitioners for
the immediate payment of the full amount stated in the writ of
execution and all lawful fees and (b) give petitioners the
option to immediately choose which property or part thereof
sufficient to satisfy the judgment may be levied upon.[32] They
argue that the admissions made by Atty. Salamero and Santos
do not amount to a waiver of their right to prior demand for
payment of the full amount of the judgment, noting that
Deputy Sheriff Mendoza should have made the demand for
payment on petitioners themselves in order to verify the
admissions made by said persons.[33]

Petitioners add that the letter of 13 November 2002 also does

not constitute a waiver or an automatic correction of the
procedural defects in the execution of the writ since
petitioners wrote the letter precisely to exercise their right to
choose the properties to be levied upon. They merely sought
to save whatever rights they still had, they explain.[34]

Petitioners also question the Court of Appeals' finding that the

44 parcels of land were sold separately as required by law, on
the ground that it has no factual or evidentiary basis. The
minutes of the auction sale on which the Court of Appeals
based its finding do not even contain the individual description
of the properties sold but only an enumeration of the titles
covering each property, with the bid price for each parcel of
land left blank but later filled in by handwriting only, indicating
that the 44 parcels were sold in bulk and not separately.[35]

Finally, petitioners allege that the Court of Appeals erred in

disregarding the documents they presented which show the
fair market value of the properties levied by Deputy Sheriff
Mendoza. The documents supposedly show that the fair
market value of the properties levied upon is
P1,187,212,000.00 or far greater than the judgment debt of
P15 million. Thus, they claim that an overlevy was perpetrated
by failure to comply with the provisions of Section 9, Rule
39.[36]

In his comment, respondent agrees with the Court of Appeals

that in assenting, through their counsel, to the auction sale
scheduled after 20 November 2002, petitioners waived the
requirement of demand for immediate payment, and that
through their letter of 13 November 2002, they indicated their
choice of the specific properties to be levied upon and this also
unwittingly cured the procedural lapses in the enforcement of
the writ.[37]

As to petitioners' allegations that the levied properties were

sold in bulk, not individually, and that the appellate court
disregarded evidence proving the market value of the
properties levied upon, respondent asserts that such
allegations are primarily questions of fact which are improper
in such a petition as the present one; besides, official
documents such as the minutes of auction sale and the
certificate of sale on execution, show that the properties were
sold individually. Moreover, the market value of the properties
was indicated by the RTC in the Order of 7 January 2003,
based on tax declarations he submitted for evaluation,
respondent adds.

On 25 January 2006, petitioners filed their Reply[38] essentially

reiterating the arguments in their petition.

The validity of both the levy made by Deputy Sheriff Mendoza

on petitioners' 44 parcels of land and the subsequent auction
sale proceedings is put in question in this case. The main issue
may be couched as follows: whether the failure of the deputy
sheriff to first demand of the judgment obligor payment of the
judgment debt before levying the judgment obligor's real
properties without allowing him to exercise his option to
choose which of his properties may be levied upon, and
without first levying on his personal properties, constitute a
fatal procedural defect resulting in the nullity of the levy and
the subsequent execution sale. The other issue is whether the
Court of Appeals committed "grave abuse of discretion" in
failing to consider petitioners' evidence on the fair market
value of the levied properties.

The petition should be denied.

Section 9, Rule 39 of the Rules of Court provides the

procedure in the enforcement of a money judgment. It reads:

SEC. 9. Execution of judgments for money, how enforced. --(a)

Immediate payment on demand.--The officer shall enforce an execution
of a judgment for money by demanding from the judgment obligor the
immediate payment of the full amount stated in the writ of execution and
all lawful fees. The judgment obligor shall pay in cash, certified bank
check payable to the judgment obligee, or any other form of payment
acceptable to the latter, the amount of the judgment debt under proper
receipt directly to the judgment obligee or his authorized representative
if present at the time of payment. The lawful fees shall be handed under
proper receipt to the executing sheriff who shall turn over the said
amount within the same day to the clerk of court of the court that issued
the writ.

xxxx

(b) Satisfaction by levy.--If the judgment obligor cannot pay all or part of
the obligation in cash, certified bank check or other mode of payment
acceptable to the judgment obligee, the officer shall levy upon the
properties of the judgment obligor of every kind and nature whatsoever
which may be disposed of for value and not otherwise exempt from
execution giving the latter the option to immediately choose which
property or part thereof may be levied upon, sufficient to satisfy the
judgment. If the judgment obligor does not exercise the option, the
officer shall first levy on the personal properties, if any, and then on the
real properties if the personal properties are insufficient to answer for
the judgment.

The sheriff shall sell only a sufficient portion of the personal or real
property of the judgment obligor which has been levied upon.

When there is more property of the judgment obligor than is sufficient to

satisfy the judgment and lawful fees, he must sell only so much of the
personal or real property as is sufficient to satisfy the judgment and
lawful fees.

Real property, stocks, shares, debts, credits, and other personal property,
or any interest in either real or personal property, may be levied upon in
like manner and with like effect as under a writ of attachment.

xxxx

Based on the foregoing, the sheriff is required to first demand

of the judgment obligor the immediate payment of the full
amount stated in the writ of execution before a levy can be
made. The sheriff shall demand such payment either in cash,
certified bank check or any other mode of payment acceptable
to the judgment obligee. If the judgment obligor cannot pay
by these methods immediately or at once, he can exercise his
option to choose which of his properties can be levied upon. If
he does not exercise this option immediately or when he is
absent or cannot be located, he waives such right, and the
sheriff can now first levy his personal properties, if any, and
then the real properties if the personal properties are
insufficient to answer for the judgment.[39]

Subsection (a) of Section 9, Rule 39 was taken from Section

15, Rule 39 of the 1964 Rules of Court which provided that
execution of money judgments is enforced by "levying on all
the property, real and personal of every name and nature
whatsoever, and which may be disposed of for value, of the
judgment debtor not exempt from execution, or on a sufficient
amount of such property, if there be sufficient, and selling the
same, and paying to the judgment creditor, or his attorney, so
much of the proceeds as will satisfy the judgment." The former
rule directed the execution of a money judgment against the
property of the judgment debtor.[40]

The present rule now requires the sheriff to first make a

demand for payment, and it prescribes the procedure for and
the manner of payment as well as the immediate turnover of
the payment by the sheriff to the clerk of court. Levy as a
mode of satisfying the judgment may be done only if the
judgment obligor cannot pay all or part of the obligation in
cash, certified bank check, or other mode of payment
acceptable to the judgment obligee.[41]

The issue of improper levy was raised in Seven Brothers

Shipping Corp. v. Oriental Assurance Corp.[42] In that case,
Seven Brothers was ordered to pay Oriental Assurance P8
million plus interest at the legal rate from the date of filing of
the complaint until full payment. When the sheriff enforced
the writ of execution by levying on the vessels of the shipping
company, it moved to quash the writ and to lift the levy. The
RTC granted the motion. Oriental Assurance assailed the RTC
decision through a petition for certiorari which the Court of
Appeals granted. Thus, the writ of execution and the levy on
the vessels were reinstated. Thereafter, Seven Brothers filed
with this Court a petition for review contending, among others,
that the levy was improper since the sheriff had not demanded
payment of the judgment debt in cash before levying on its
vessels.

In denying the petition, the Court noted that the decision

finding Seven Brothers liable to Oriental Assurance had
already become final and executory and that entry of
judgment had already issued. It also found untenable Seven
Brothers' claim of improper levy, citing Torres v. Cabling[43]
where the Court held that "a sheriff is not required to give the
judgment debtor some time to raise cash [since] if time be
given, the property may be placed in danger of being lost or
absconded." Based on the evidence presented, Seven
Brothers' existing assets were found to be insufficient to
satisfy the final judgment against it, and the sheriff was thus
deemed justified in recognizing that Seven Brothers was in no
position to pay its obligation in cash and in immediately
levying on the vessels that would sail beyond the reach of
Philippine courts and law enforcers if the levy was not made.
In so ruling, the Court recognized that while it is desirable that
the Rules be conscientiously observed, in meritorious cases
they should be interpreted liberally to help secure and not
frustrate justice.[44]

In the case at bar, it is not disputed that Deputy Sheriff

Mendoza failed to first demand of petitioners the immediate
payment in cash of the full amount stated in the writ of
execution. However, it is also extant in the records that
petitioners never disputed the admissions of their counsel,
Atty. Salamero, that they had no funds to pay even a month's
interest and that they agreed to the levy so long as the auction
sale would not be set earlier than 20 November 2002. The
admissions provide reasonable basis for the deputy sheriff to
forego prior demand on petitioners for payment in cash and
proceed to levy on the properties right away. Atty. Salamero,
as petitioners' counsel and representative, is expected to
know all the matters related to the case, including the last
stage of execution and the state of financial affairs of her
clients. Since petitioners had also already agreed to the levy
on their real properties, it would be pointless to require the
deputy sheriff to demand immediate payment in cash. For the
same reason, it would be an empty exercise to expect the
deputy sheriff to first levy on their personal properties.

Furthermore, while petitioners, in their 13 November 2002

letter, complained of procedural defects in the enforcement of
the writ, they at the same time also actually "exercise[d] their
right to choose which properties may be levied upon in
satisfaction of their aforesaid obligation."[45] It should be
noted that nowhere in the letter did they offer payment of
their obligation in cash. They did not even allege any
willingness and ability to do so. They also did not offer
personal properties that may be subject of levy. What they
offered were 8 parcels of land, the value of which, so they
alleged, would satisfy the obligation. With the offer,
petitioners then requested that the appropriate corrections in
the notice of levy be made, presumably to limit the levy to said
parcels of land and to effect cancellation of the levy on the
remaining parcels. The request is evidenced by petitioners'
subsequent motion to recall the notice of levy, specifically
seeking that the notice of levy of Deputy Sheriff Mendoza be
cancelled and a new one issued effecting a levy only on the
aforementioned 8 parcels of land.

By such acts, petitioners may be said to have overlooked the

procedural lapses, acceded to the execution by levy, and
effectively exercised their right to choose which of their
properties may be levied on. That the 13 November 2002
letter is an exercise of this right is shown by this explicit
averment in the motion to recall the notice of levy, thus:

5. To protect and preserve their rights under the circumstances, on 13

November 2002, [petitioners] wrote a letter x x x formally exercising
their right to choose which properties may be levied upon in accordance
with the terms of the Writ of Execution issued by this Honorable Court. In
the said letter, [petitioners] had identified a pool of assets, consisting of
real properties, from which pool of assets, levy may be made upon such
properties whose combined total aggregate value would satisfactorily
cover and satisfy plaintiff's principal claim of Fifteen Million Pesos x x x.[46]
[Emphasis supplied]

We thus conclude that Deputy Sheriff Mendoza's failure to

demand immediate payment in cash did not nullify the levy on
petitioners' real properties.

We now go to the question of overlevy of the properties.

The 8 parcels of land indicated in the 13 November 2002 letter

are actually among the 44 parcels of land levied upon by
Deputy Sheriff Mendoza. Petitioners claim that these 8 parcels
of land already had a total fair market value of
P155,726,000.00, enough to satisfy their judgment debt, and
that there was an overlevy when all 44 parcels of land were
levied upon. Related to the claim of overlevy is the ascribed
"grave abuse of discretion"[47] on the part of the Court of
Appeals for its failure to consider the evidence presented by
petitioners showing the fair market value of the levied
properties.

The question of whether there was indeed an overlevy of

properties is one that is essentially factual in nature, as it goes
into the determination of the fair market value of the
properties levied upon and the consideration of the amount of
real property levied. An exercise like this does not involve the
application of discretion as it invites rather an evaluation of
the evidentiary record which is not proper in a petition for
review on certiorari. Matters of proof and evidence are beyond
the power of this Court to review under a Rule 45 petition,
except in the presence of some meritorious circumstances,[48]
none of which is availing in this case.

The allegation of overlevy was first raised in petitioners'

motion to recall the notice of levy and to cancel the scheduled
auction sale of the levied properties. Under Section 3, Rule 15
of the Rules of Court, a motion should state the relief sought to
be obtained and the grounds upon which it is based, and if
required by the Rules or necessary to prove the facts alleged
therein, must be accompanied by supporting affidavits and
other papers. In the motion to recall the notice of levy, the
claim of overlevy was not backed up by any supporting papers.
The only papers submitted to the trial court consisted of
attachments or annexes of petitioners' reply to respondent's
opposition, not of the motion to recall the notice of levy itself.
Even then, said papers consisted of mere photocopies of the
following: two appraisal reports by a property consultant
firm,[49] a Maybank memorandum dated 17 June 2002 and a
safekeeping agreement which showed that the properties
were used by petitioners as collateral for loan transactions.[50]
Where the subject of inquiry is the contents of the photocopies
submitted by petitioners, the original documents themselves
should be presented.[51] The photocopies are secondary
evidence which are admissible only when the original
documents are unavailable, as when they had been lost or
destroyed or cannot otherwise be produced in court.[52] As
mere photocopies and not originals, and where it had not been
demonstrated that the originals are no longer available, they
are not admissible to prove the true market value of the
properties.

The appraisal reports valued the properties at the total

amount of P912,428,000.00. However, the appraisal reports
do not clearly identify, through lot numbers and TCT numbers,
the properties they cover; instead, the properties are broadly
described as "land [area in square meters] located at
Barangay Quiling, Talisay, Batangas."[53] Thus, the general
conclusion that the properties covered by the appraisal
reports include the subject properties cannot really be
determined from the appraisal reports alone. In fact, in their
reply to respondent's opposition, petitioners clarified that the
first appraisal report dated 21 February 2001 covers a piece of
property that is actually not among the properties levied upon
by the deputy sheriff and sold at public auction.[54]

The first appraisal report indicates that the report was based
on, among others, a photocopy of the TCT of the property, but
the TCT was not appended to the report submitted to the court
for evaluation. What was instead attached is the Maybank
memorandum which supposedly evidenced approval of an
application for a domestic letter of credit secured with a P47
million real estate mortgage over the property covered by TCT
No. T-89827. Petitioners claim that the first appraisal report
described and appraised the property covered by TCT No.
T-89827.[55] It should nonetheless be noted that the property
covered by TCT No. T-89827 is not one of the properties levied
upon by the deputy sheriff or sold at the auction sale.

The valuation in the first appraisal report is confirmed by the

second appraisal report dated 31 May 2002, petitioners claim,
since the second report also covers properties located in the
same area. However, like the other appraisal report, the
identification of the particular properties covered by the
second appraisal report cannot be determined. The second
report stated that the valuation is premised on the assumption
that the property as pinpointed to the appraisers is the one
described in the titles and plans furnished them. However, no
such titles or plans are attached to the report which even
acknowledged that the assumptions arrived at were made in
the absence of an updated relocation survey and cadastral
map from the assessor's office of Talisay, Batangas.[56]

Furthermore, it was not demonstrated in either appraisal

report that the assumptions on which the valuations were
premised--i.e., that the barangay road fronting the properties
would be developed all the way up to Tagaytay-Calamba Road
leading to the Palace in the Sky, and that the Tagaytay
Highlands Drive actually bounds the property as claimed by
Villarin--were substantiated.

The safekeeping agreement dated 6 March 2001 provided that

16 of petitioner Villarin's properties in Barangay Quiling,
Talisay, Batangas, which are among those levied upon by the
deputy sheriff, would be used as security and collateral for the
loan of US$75 million obtained from an international financing
corporation. The 16 properties supposedly have an appraised
value of P745,615,000.00, equivalent to twenty percent (20%)
of the loan value, or US$15 million. However, aside from the
declared values in the document, no other supporting
document to establish the fair market value of these
properties was given. It is not even certain if the loan
agreement subject of the safekeeping agreement pushed
through.

Moreover, the records show that the original loan of P15

million was secured by a real estate mortgage[57] over a
47,241-square meter parcel of land and improvements
thereon in Barangay San Jose, Tagaytay City covered by TCT
No. T-89829, as well as a guarantee payment bond[58] of P15
million issued by Intra Strata and a mortgage redemption
insurance for P16 million.[59] For one thing, the real estate
mortgage securing the P15 million loan does not indicate the
value of the property mortgaged. And for another, it appears
that the parties themselves did not deem the mortgage as
sufficient security. There were additional securities provided
by the guarantee payment bond and mortgage redemption
insurance.

The records also show that in the compromise agreement

subsequently entered into by petitioners, respondent and
Intra Strata, the indebtedness of P15 million plus all interests
due was secured by all the mortgages executed over
petitioners' real properties in favor of Intra Strata.[60] Said real
properties allegedly refer to the 8 parcels of land indicated in
the 13 November 2002 letter.[61] However, nothing in the
record corroborates this claim. There is no proof that the
properties referred to in paragraph (c) of the compromise
agreement are the same 8 parcels of land mentioned in the
letter. Proof of these mortgages and other relevant documents
was not even offered.

The burden is on petitioners to prove their claim of overlevy

but the evidence they presented is woefully insufficient.
Consequently, they failed to overcome the burden of proof.

As to petitioners' allegation that the Court of Appeals erred in

not finding that the 44 parcels of land were sold in bulk and not
separately or individually as required by law, the minutes of
auction sale and certificate of sale on execution would show
otherwise. These official documents indicate that the
properties were sold individually. We agree with the Court of
Appeals that the legal presumption that official duty has been
regularly performed applies especially when petitioners who
were duly represented during the auction sale neither
objected to the sale nor claimed immediately thereafter that
the properties were sold in bulk.

To stress anew, following the review yardstick in a Rule 45

petition which is reversible error, the Court of Appeals
emerges faultless in disregarding petitioners' evidence. Even if
the measure of review is "grave abuse of discretion" as
petitioners unknowingly insist, the appellate court should be
sustained still.