THIRD DIVISION

[G.R. No. 141256. July 15, 2005.]

ESTANISLAO PADILLA, JR. , petitioner, vs . PHILIPPINE PRODUCERS'

COOPERATIVE MARKETING ASSOCIATION, INC. , respondent.

Reyes V. Alejano for petitioner.

Adoniram Pamplona for respondent.

SYLLABUS
1. CIVIL LAW; REGISTRATION; PETITIONER'S RELIANCE ON SECTION 6, RULE
39 OF THE 1997 REVISED RULES OF CIVIL PROCEDURE IS MISPLACED; THE FACT OF
LEVY AND SALE CONSTITUTES EXECUTION, AND NOT THE ACTION FOR THE ISSUANCE
OF A NEW TITLE. — Petitioner Padilla's reliance on Section 6 of Rule 39 of the 1997
Revised Rules of Civil Procedure is misplaced. The fact of levy and sale constitutes
execution, and not the action for the issuance of a new title. Here, because the levy and
sale of the properties took place in June and July of 1990, respectively, or less than a year
after the decision became nal and executory, the respondent clearly exercised its rights in
timely fashion. In addition, petitioner himself admits his failure to redeem the properties
within the one-year period by adopting the facts stated in the Court of Appeals' decision.
There is thus no doubt he had been divested of his ownership of the contested lots.
2. ID.; ID.; PROPERTY REGISTRATION DECREE (P.D. 1529); RESPONDENT'S
PROPER RECOURSE OF ACTION IS A SEPARATE CADASTRAL ACTION INITIATED VIA A
PETITION IN COURT UNDER SECTION 107 OF P.D. 1529. — Petitioner is correct in
assailing as improper respondent's ling of a mere motion for the cancellation of the old
TCTs and the issuance of new ones as a result of petitioner's refusal to surrender his
owner's duplicate TCTs. Indeed, this called for a separate cadastral action initiated via
petition under Section 107 of PD 1529, formerly Section 111 of Act 496. Respondent
alleges that it resorted to ling the contested motion because it could not obtain new
certi cates of title, considering that petitioner refused to surrender his owner's duplicate
TCTs. This contention is incorrect. The proper course of action was to le a petition in
court, rather than merely move, for the issuance of new titles. This was the procedure
followed in Blanca or by Sarmiento Trading which was in more or less the same situation
as the respondent in this case.
3. ID.; ID.; ID.; P.D. 1529 OR THE "PROPERTY REGISTRATION DECREE" IS THE
LAW ON THE MATTER AND RESPONDENT SHOULD HAVE FOLLOWED IT; REASONS
BEHIND THE LAW. — It is clear that PD 1529 provides the solution to respondent's
quandary. The reasons behind the law make a lot of sense; it provides due process to a
registered landowner (in this case the petitioner) and prevents the fraudulent or mistaken
conveyance of land, the value of which may exceed the judgment obligation. Petitioner
contends that only his interest in the subject lots, and not that of his wife who was not a
party to the suit, should have been subjected to execution, and he should have had the
opportunity to prove as much. While we certainly will not condone any attempt by
petitioner to frustrate the ends of justice — the only way to describe his refusal to
surrender his owner's duplicates of the certi cates of title despite the nal and executory
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 judgment against him — respondent, on the other hand, cannot simply disregard proper
procedure for the issuance to it of new certi cates of title. There was a law on the matter
and respondent should have followed it. In any event, respondent can still le the proper
petition with the cadastral court for the issuance of new titles in its name.

DECISION

CORONA , J : p

In implementing the involuntary transfer of title of real property levied and sold on
execution, is it enough for the executing party to le a motion with the court which
rendered judgment, or does he need to file a separate action with the Regional Trial Court?
This is a petition for review on certiorari 1 from a decision of the Court of Appeals in
CA-G.R. CV No. 53085, 2 and its resolution denying reconsideration, 3 both of which
affirmed the orders of the Regional Trial Court of Bacolod City, Branch 51. 4
The undisputed facts of the case follow. 5
Petitioner and his wife are the registered owners of the following real properties: Lot
Nos. 2904-A (covered by TCT No. T-36090), 2312-C-5 (covered by TCT No. T-3849), and
2654 (covered by TCT No. T-8053), all situated in Bago City.
Respondent is a marketing cooperative which had a money claim against petitioner.
ISCaDH

On April 24, 1987 respondent led a civil case against petitioner for collection of a
sum of money in the Regional Trial Court of Bacolod City. 6 Despite receipt of summons on
May 8 1987, petitioner (then defendant) opted not to le an answer. 7 On March 3, 1988,
respondent (then plaintiff) moved to have petitioner-defendant declared in default, which
the trial court granted on April 15, 1988. 8 Respondent presented its evidence on October
9, 1989. 9 On November 28, 1989, the trial court rendered a decision in respondent's favor.
1 0 Petitioner was furnished a copy of this decision by mail on November 29, 1989 but,
because of his failure to claim it, the copy was returned. 1 1
On May 31, 1990, the Court issued a writ of execution. On June 4, 1990, the three
lots (Lot 2904-A, Lot 2312-C-5 and Lot 2654), all of the Bago Cadastre and registered in
petitioner's name, were levied by virtue of that writ. On July 1990, sheriff Renato T. Arimas
auctioned off the lots to satisfy the judgment, with respondent as the only bidder. On July
10, 1990, ex-officio provincial sheriff and clerk of court Antonio Arbis executed a
certi cate of sale in favor of respondent. On August 13, 1990, the certi cate of sale was
recorded in the Register of Deeds. 1 2
When petitioner failed to exercise his right of redemption within the 12-month
period allowed by law, the court, on motion of respondent, ordered on February 5, 1992 the
issuance of a writ of possession for the sheriff to cause the delivery of the physical
possession of the properties in favor of respondent. 1 3
On May 17, 1995, respondent led a motion to direct the Register of Deeds to issue
new titles over the properties in its name, alleging that the Register of Deeds (RD) of Bago
City would not issue new titles (in respondent's name) unless the owner's copies were rst
surrendered to him. Respondent countered that such surrender was impossible because
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 this was an involuntary sale and the owner's copies were with petitioner. 1 4
On July 3, 1995, the trial court issued an order granting the motion. In a subsequent
order dated August 8, 1995, it denied petitioner's motion for reconsideration. Petitioner
appealed. Four years later, the Court of Appeals rendered the assailed decision a rming
the order of the trial court.
Petitioner contends that respondent's motion for the RD to cancel the existing
certi cates of title and issue new ones in its name was in fact a real action and that the
motion was procedurally in rm because respondent did not furnish him a copy. 1 5 He also
claims that under Section 6 of Rule 39 of the 1997 Rules of Civil Procedure, the execution
of the judgment was barred by prescription, given that the motion was led more than 5
years after the writ of execution was issued on March 23, 1990. 1 6 He also argues that
respondent failed to follow the correct procedure for the cancellation of a certi cate of
title and the issuance of a new one, which is contained in Section 107 of PD 1529. 1 7
In its comment, 1 8 respondent claims that the motion dated May 15, 1995 to direct
the RD to issue new certi cates of title was but a continuation of the series of events that
began with the decision in its favor on November 28, 1989, and from there, the auction of
the properties and the issuance of a certificate of sale in 1990.
The two principal issues for consideration are:
(1) whether or not respondent's right to have new titles issued in its
name is now barred by prescription and
(2) whether or not the motion in question is the proper remedy for
cancelling petitioner's certificates of title and new ones issued in its
name. cAaDCE

On the rst issue, we rule that the respondent's right to petition the court for the
issuance of new certificates of title has not yet prescribed.
I n Heirs of Blanca or vs. Court of Appeals, 1 9 Sarmiento Trading Corporation,
predecessor-in-interest of the private respondent Greater Manila Equipment Marketing
Corporation, secured a writ of execution in 1968 by virtue of which it levied real property
belonging to petitioners' predecessor-in-interest, Blanca or. When the property was
auctioned, Sarmiento Trading bid successfully and, in 1970, after the lapse of the one-year
redemption period, consolidated its ownership over the lot.
Sarmiento Trading then led a petition with the Court of First Instance to order the
cancellation of Blanca or's title and the issuance of a new one in its name. In 1972,
Sarmiento Trading sold the lot to private respondent which, at the time, went by the name
Sarmiento Distributors Corporation.
In 1988, the Deputy Register of Deeds of Iloilo wrote to Blanca or requesting him to
surrender his owner's duplicate copy of the TCT. Blanca or did not comply and the RD
refused to issue a new title. On May 25, 1989, private respondent led a petition in the
Regional Trial Court praying that the petitioners be ordered to surrender the owner's
duplicate copy of the title. The petitioners refused, claiming that respondent's cause of
action had already prescribed. Ruling otherwise, we stated:
It is settled that execution is enforced by the fact of levy and
sale. The result of such execution sale — with Sarmiento Trading Corporation as
the highest bidder — was that title to Lot No. 22 of TCT No. 14749 vested
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 immediately in the purchaser subject only to the judgment debtor's right to
repurchase. Therefore, upon Sarmiento Trading Corporation's purchase
of Lot No. 22 covered by TCT No. 14749 at the auction sale, private
respondent's successor-in-interest had acquired a right over said title.

The right acquired by the purchaser at an execution sale is inchoate and

does not become absolute until after the expiration of the redemption period
without the right of redemption having been exercised. But inchoate though it be,
it is like any other right, entitled to protection and must be respected until
extinguished by redemption. Gaudencio Blanca or was not able to redeem
his property after the expiration of the redemption period, which was 12
months after the entry or annotation of the certi cate of sale made on
the back of TCT No. 14749. Consequently, he had been, divested of all
his rights to the property. (emphasis ours)

In this case, the rule being invoked by petitioner 2 0 states:

SEC. 6. Execution by motion or by independent action. — A nal and
executory judgment or order may be executed on motion within ve (5) years
from the date of its entry. After the lapse of such time, and before it is barred by
the statute of limitations, a judgment may be enforced by action. The revived
judgment may also be enforced by motion within ve (5) years from the date of
its entry and thereafter by action before it is barred by the statute of limitations.

As should be evident from Blancaflor, petitioner Padilla's reliance on Section 6 of

Rule 39 of the 1997 Revised Rules of Civil Procedure is misplaced. The fact of levy and sale
constitutes execution, and not the action for the issuance of a new title. Here, because the
levy and sale of the properties took place in June and July of 1990, respectively, or less
than a year after the decision became nal and executory, the respondent clearly exercised
its rights in timely fashion.
In addition, petitioner himself admits his failure to redeem the properties within the
one-year period by adopting the facts stated in the Court of Appeals' decision. 2 1 There is
thus no doubt he had been divested of his ownership of the contested lots.
Respondent's position hinges on petitioner's failure to redeem the properties 12
months after the certi cate of sale was recorded in the Register of Deeds on August 13,
1990. There is no uncertainty about respondent's having become the new lawful owner of
the lots in question by virtue of the levy and the execution sale.
On the other hand, the issue of whether to acquire new titles by mere motion or
through a separate petition is an entirely different matter.
Petitioner is correct in assailing as improper respondent's ling of a mere motion
for the cancellation of the old TCTs and the issuance of new ones as a result of petitioner's
refusal to surrender his owner's duplicate TCTs.
Indeed, this called for a separate cadastral action initiated via petition.
Section 107 of PD 1529, 2 2 formerly Section 111 of Act 496, 2 3 provides:
Sec. 107. Surrender of withheld duplicate certi cates . — Where it is
necessary to issue a new certi cate of title pursuant to any involuntary
instrument which divests the title of the registered owner against his consent or
where a voluntary instrument cannot be registered by reason of the refusal or
failure of the holder to surrender the owner's duplicate certi cate of title, the party
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 in interest may le a petition in court to compel the surrender of the same to the
Register of Deeds. The court, after hearing, may order the registered owner or any
person withholding the duplicate certi cate to surrender the same, and direct the
entry of a new certi cate or memorandum upon such surrender. If the person
withholding the duplicate certi cate is not amenable to the process of the court,
or if for any reason the outstanding owner's duplicate certi cate cannot be
delivered, the court may order the annulment of the same as well as the issuance
of a new certi cate of title in lieu thereof. Such new certi cate and all duplicates
thereof shall contain a memorandum of the annulment of the outstanding
duplicate. aHTEIA

Respondent alleges that it resorted to ling the contested motion because it could
not obtain new certi cates of title, considering that petitioner refused to surrender his
owner's duplicate TCTs. This contention is incorrect. The proper course of action was to
le a petition in court, rather than merely move, for the issuance of new titles. This was the
procedure followed in Blancaflor by Sarmiento Trading which was in more or less the
same situation as the respondent in this case: 2 4
Petitioners' reliance on prescription and laches is unavailing in this
instance. It was proper for Sarmiento Trading Corporation to le a
petition with the Court of First Instance of Iloilo, acting as a cadastral
c o u r t , for the cancellation of TCT No. 14749 in the name of Gaudencio
Blanca or and the issuance of another in its name. This is a procedure provided
for under Section 78 of Act No. 496 and Section 75 of PD No. 1529. . .

Section 78 of Act 496 reads:

Sec. 78. Upon the expiration of the time, if any allowed by law for
redemption after registered land has been sold on any execution, or taken or sold
for the enforcement of any lien of any description, the person claiming under the
execution or under any deed or other instrument made in the course of the
proceedings to levy such execution or enforce any lien, may petition the court for
the entry of a new certi cate to him, and the application may be granted:
Provided, however, That every new certi cate entered under this section shall
contain a memorandum of the nature of the proceeding on which it is based:
Provided, further, That at any time prior to the entry of a new certi cate the
registered owner may pursue all his lawful remedies to impeach or annul
proceedings under execution or to enforce liens of any description.

Section 75 of PD 1529 provides:

Sec. 75. Application for new certi cate upon expiration of redemption
period. — Upon the expiration of the time, if any, allowed by law for redemption
after the registered land has been sold on execution, or taken or sold for the
enforcement of a lien of any description, except a mortgage lien, the purchaser at
such sale or anyone claiming under him may petition the court for the entry of a
new certificate to him.

Before the entry of a new certi cate of title, the registered owner may
pursue all legal and equitable remedies to impeach or annul such proceedings.

It is clear that PD 1529 provides the solution to respondent's quandary. The reasons
behind the law make a lot of sense; it provides due process to a registered landowner (in
this case the petitioner) and prevents the fraudulent or mistaken conveyance of land, the
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 value of which may exceed the judgment obligation. Petitioner contends that only his
interest in the subject lots, and not that of his wife who was not a party to the suit, should
have been subjected to execution, and he should have had the opportunity to prove as
much. CHTAIc

While we certainly will not condone any attempt by petitioner to frustrate the ends of
justice — the only way to describe his refusal to surrender his owner's duplicates of the
certi cates of title despite the nal and executory judgment against him — respondent, on
the other hand, cannot simply disregard proper procedure for the issuance to it of new
certificates of title. There was a law on the matter and respondent should have followed it.
In any event, respondent can still le the proper petition with the cadastral court for
the issuance of new titles in its name.
WHEREFORE, the instant petition is hereby GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 53085 is hereby REVERSED. The order of the Regional Trial
Court of Bacolod City ordering the Register of Deeds of Bago City to issue new certi cates
of title in favor of respondent is ANULLED. TDCaSE

Panganiban, Sandoval-Gutierrez, Carpio Morales and Garcia, JJ., concur.

Footnotes
1. Under Rule 45 of the Rules of Court.

2. CA Decision dated March 15, 1999 in CA-G.R. CV No. 53085, penned by Associate
Justice Artemon D. Luna and concurred in by Associate Justices Delilah Vidallon-
Magtolis and Rodrigo V. Cosico of the Second Division, Rollo, pp. 26-34.
3. CA Resolution dated November 19, 1999 (affirming the March 15, 1999 CA Decision) in
CAG.R. CV No. 53085, penned by Associate Justice Artemon D. Luna and concurred in by
Associate Justices Delilah Vidallon-Magtolis and Rodrigo V. Cosico of the Second
Division, Rollo, pp. 37.

4. Orders dated July 3, 1995 and August 8, 1995 penned by Judge Ramon B. Posadas of
the Regional Trial Court of Bacolod City, Branch 51, Rollo, pp. 67-70.

5. Rollo, pp. 27-28, 68-69.

6. Docketed as Civil Case No. 4427, Rollo, pp. 67-70.
7. Id., p. 68.
8. Id., p. 68.
9. Id., p. 107.
10. Id., p. 68.
11. Id., p. 107.
12. Id., p. 68.
13. Id., p. 68.
14. Id., pp. 39-40.

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 15. Id., p. 11.
16. Id., pp. 15-17. The motion was filed on May 17,1995.
17. Id., pp. 18-19.
18. Id., pp. 90-95.
19. 364 Phil. 454 (1999).
20. Section 6, Rule 39 of the 1997 Revised Rules of Civil Procedure.

21. Rollo, p. 12.

22. Amending and Codifying the Laws Relative to Registration of Property and for Other
Purposes.
23. The Land Registration Act.
24. Supra, p. 463.

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