236 Warner, Barnes - Co. Ltd. V Santos

10/21/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 014
[No. 4932. November 16, 1909.]
WARNER, BARNES & Co., LIMITED, plaintiff and appellee, vs.

RAMON F. SANTOS, defendant and appellant.
ACTION TO FORECLOSE MORTGAGE ON REAL PROPERTY;

SALE UNDER EXECUTION; CONFIRMATION OF SALE.—The
plaintiff held a mortgage against the property of the defendant. The
action was brought to foreclose said mortgage. A judgment by default
was entered in said cause against the defendant. Later the cause was duly
tried and a judgment entered for the amount due on said mortgage. Later
an execution was issued and the mortgaged property duly sold. Later the
plaintiff presented a motion for the confirmation of the sale of said
property. The defendant then appeared and opposed such confirmation:
Held, That a judicial sale of real estate in an action to foreclose will not
be set aside for inadequacy of price, unless the inadequacy be so great as
to shock the conscience or unless there be additional circumstances
against its fairness.
APPEAL from an order of the Court of First Instance of Albay.

Trent, J.
The f acts are stated in the opinion of the court.
Leoncio and Carlos A. Imperial, for appellant.
Manly & McMahon, for appellee.
447
VOL. 14, NOVEMBER 16, 1909. 447

Warner, Barnes & Co. vs. Santos.
JOHNSON, J.:
From the record it appears that the plaintiff brought an action against
the defendant in the Court of First Instance of the Province of Albay,
on the 18th of August, 1906, for the purpose of foreclosing a
mortgage which he held upon various parcels of land belonging to
the defendant. The defendant was duly notified, and failing to appear
within the time prescribed by law, a judgment by default was
rendered against him on the 14th of September, 1906. Later the
cause was brought on for trial, and after hearing the evidence
adduced during the trial, the lower court rendered a judgment in
www.central.com.ph/sfsreader/session/0000016dee47239ec4f0a83c003600fb002c009e/t/?o=False 1/4
favor of the plaintiff and against the defendant for the sum of
P11,928.77, with interest at the rate of 10 per cent annually, to be
liquidated monthly from the month of June, 1906, and also a
judgment for P1,500 as attorney's fees. The judgment of the lower
court further provided that if the defendant failed to pay the amount
of said judgment on or before the first day of the following term of
court, that an execution might issue against the property covered by
the said mortgage, for the purpose of satisfying the said judgment.
On the 6th day of March, 1908, upon the petition of the plaintiff,
the amount of said judgment not having been paid, the Hon. Grant
Trent, judge of said court, issued an order of execution, directing the
sheriff to sell the property covered by the said mortgage. The
mortgaged property, under said execution, was duly sold on the 10th
day of April, 1908.
On the 14th of April, 1908, the plaintiff presented a motion in the
lower court, asking that the said sale of the mortgaged property be
affirmed.
On the 21st day of April, 1908, the defendant appeared in court
and objected to the confirmation of the sale upon the ground that
there was another person who would pay the sum of P5,500 for the
property sold. The return of the sheriff shows that he sold the
property for the sum of P4,715. The defendant in said motion
requested that the property be put up and sold again. It will be
noticed that
448
448 PHILIPPINE REPORTS ANNOTATED

the defendant appeared and objected to the confirmation of the sale

eleven days after the sale had been consummated, and so far as the
record discloses this was his first appearance during the pendency of
the cause in the lower court.
On the 21st day of April, 1908, after duly considering the
objection made by the defendant, the lower court overruled the said
objection and confirmed the sale of said property.
To this ruling of the lower court the defendant duly excepted and
later presented his bill of exceptions in this court.
In this court the appellant made the following assignments of
error:
First. That the court committed an error in confirming the sale of
the mortgaged property; and
Second. That the lower court committed an error in adjudicating
the said property to the purchaser.
These two assignments of error may be considered as one, to wit:
that the lower court committed an error in confirming the sale of said
mortgaged property.
Sections 254 to 261 of the Code of Procedure in Civil Actions

provide the method of foreclosing a mortgage upon real estate or the
interest thereon.
Section 256 provides for trial and judgment in such actions.
Section 257 provides for the sale of the mortgaged property in case
the lower court renders a judgment ordering the sale. After the sale
has been made by the sheriff, under the provisions of said last-
named section, it is necessary to secure a decree of the court
confirming such sale.. Said section also provides that "should the
court decline to confirm the sale for good cause shown, and should
set it aside, it shall order a resale in accordance with law." The lower
court, in accordance with this provision has a right to confirm or to
refuse to confirm the sale for good cause shown, and the single
question presented in this court is whether or not the objection of the
defendant to the confirmation of the sale constituted a sufficient
cause for refusing to confirm such sale.
449
VOL. 14, NOVEMBER 16, 1909. 449

The basis of the objection of the defendant in the lower court was
that he was able to obtain from another person about P800 more than
the sheriff received from the person to whom he sold said property.
This person was not discovered by the defendant until ten or twelve
days after the sale took place. No objection is made by the defendant
that the sale was not duly advertised or that there was any collusion
on the part of the sheriff or the other parties interested in the sale. It
is the duty of the court, of course, in the sale of property under the
conditions of the present case, to obtain as much money for the
judgment debtor out of his property as it is possible, This duty on the
part of the court, however, does not justify negligent delay in an
attempt to protect his rights on the part of the said judgment debtor.
In the present case the defendant made no attempt to defend his
rights until some days after judgment, execution, and sale. The
Supreme Court of the United States has held in numerous decisions,
that a sale under foreclosure proceedings would not be set aside
upon the ground that the sheriff did not receive as much money as he
might have received, providing all of the proceedings were valid and
regular, unless the sale was made for a sum grossly inadequate in
comparison with the real value of the property.
A judicial sale of real estate will not be set aside for inadequacy
of price unless the inadequacy be so great as to shock the conscience
or unless there be additional circumstances against its fairness.
(Graffam et al. 'vs. Burgess, 117 U. S., 180; Schroeder vs. Young,
161 U. S., 334; Livingston vs. Byrne, 11 Johnson (N. Y.), 555;
Eberhardt vs. Gilchrist, 11 N. J. Equity, 167; Montague vs. Dawes,

14 Allen (Mass.), 369; Drinan vs. Nichols, 115 Mass., 353.)
While mere inadequacy of price under judicial sales has rarely
been held sufficient to justify the setting aside of a judicial sale of
property, courts will not be slow to seize upon this or other
circumstances impeaching the fairness of the transaction as cause for
vacating such judicial sales,
450
450 PHILIPPINE REPORTS ANNOTATED

United States vs. Paguirigan.
especially if the inadequacy be so gross as to shock the conscience.

(Schroeder vs. Young, 161 U. S., 334; Byers vs. Surget, 19 Howard,
303; Pacific Railroad Company vs Ketchum, 101 U. S., 289.)
We are of the opinion and so hold that the judgment of the lower
court should be affirmed with costs. So ordered.
Arellano, C. J., Torres, and Moreland, JJ., concur.
Order affirmed.
————
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10/21/2019 PHILIPPINE REPORTS ANNOTATED VOLUME 014

[No. 4932. November 16, 1909.]

WARNER, BARNES & Co., LIMITED, plaintiff and appellee, vs.

ACTION TO FORECLOSE MORTGAGE ON REAL PROPERTY;

APPEAL from an order of the Court of First Instance of Albay.

VOL. 14, NOVEMBER 16, 1909. 447

448 PHILIPPINE REPORTS ANNOTATED

the defendant appeared and objected to the conﬁrmation of the sale

Sections 254 to 261 of the Code of Procedure in Civil Actions

VOL. 14, NOVEMBER 16, 1909. 449

Eberhardt vs. Gilchrist, 11 N. J. Equity, 167; Montague vs. Dawes,

450 PHILIPPINE REPORTS ANNOTATED

especially if the inadequacy be so gross as to shock the conscience.

Arellano, C. J., Torres, and Moreland, JJ., concur.

© Copyright 2019 Central Book Supply, Inc. All rights reserved.

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