Jamero, Gari R 18 November 2018

Civil Procedure (Monday, 4:30pm-9:30pm)

1. Section 27, Rule 39 of the Rules of Court provide for the persons who may exercise the
right of redemption within the period allowed which include: (a) the judgment obligor,
or his successor-in-interest in the whole or any part of the property; (b) a creditor
having a lien by virtue of an attachment, judgment or mortgage on the property sold, or
on some part thereof, subsequent to the lien under which the property was sold. Such
redeeming creditor is termed as redemptioner.

This was discussed in the case of Sio Tat King v Lim (GR 185407, 22 June 2015) where the
Court held that petitioner was an assignee of the judgment obligor’s right of
redemption, and exercised the same within the period. However, the eviction of the
purchaser may not be effected as the same would run counter to Section 33, Rule 39 of
the Rules of Court which states that where there is a third party actually holding the
property adversely to the judgment obligor, the possession of the property shall not be
given to the purchaser or last redemptioner.

The judgment obligor and other persons allowed by the Rules to exercise the right of
redemption (including redemptioner) may avail of the same within the period allowed;
Spouses Teves v Integrated Credit & Corporate Services Co., (GR 216714, 4 April 2018)
reiterated the period where the Court held that It is thus settled that the buyer in a
foreclosure sale becomes the absolute owner of the property purchased if it is not
redeemed during the period of one year after the registration of the sale, as provided
for in Section 28, Rule 39 of the Rules of Court. As such, he is entitled to the possession
of the said property and can demand it at any time following the consolidation of
ownership in his name and the issuance to him of a new transfer certificate of title. The
buyer can in fact demand possession of the land even during the redemption period
except that he has to post a bond in accordance with Section 7 of Act No. 3135, as
amended. No such bond is required after the redemption period if the property is not
redeemed. Possession of the land then becomes an absolute right of the
purchaser as confirmed owner. Upon proper application and proof of title, the issuance
of the writ of possession becomes a ministerial duty of the court.

By the foregoing, ownership of the property is transferred to the buyer during the
execution sale but may be redeemed within one year from the sale by the judgment
obligor and the persons provided for in Section 27, Rule 39 of the Rules of Court. Under
Section 32 of the same Rule, during the period for redemption, where the property is
held by a tenant, the rents, earnings, income from the property shall belong to the
judgment obligor. Section 28, of the same Rule provides for the manner of redemption
and the amount to be paid by the redemptioner or the judgment obligor, which is the
purchase price with 1 percent monthly interest until the time of redemption, and any
assessment or tax paid by the purchaser with interest in the same rate. Property
redeemed within the one-year period by a redemptioner may be further redeemed
 within sixty (60) days from the time of redemption through the payment of the sums in
the previous redemption plus interest rates which shall be at two percent. Redemption
by the judgment obligor follows the same manner as that of redemptioners but the
property may no longer be redeemed further, as ownership has reverted to its original
owner.

In Gomeco Metal Corporation v Court of Appeals (GR 202531, 17 August 2016), the Court
held that The commencement of the one-year redemption period is of critical
importance, not only to the judgment debtor or a redemptioner, but even more so to
the successful purchaser in the execution sale. This is because, under the rules, it is only
after the lapse of such one-year period with no valid redemption having been effected,
that a successful purchaser acquires absolute ownership over the real property he
purchased in the execution sale and becomes entitled to a final deed of sale.

2. In Siy v Tomlin (GR 205998, 24 April 2017), the Court held that in a complaint for
replevin, the claimant must convincingly show that he is either the owner or clearly
entitled to the possession of the object sought to be recovered, and that the defendant,
who is in actual or legal possession thereof, wrongfully detains the same. Since his
agent was able to sell the subject vehicle to Chua, petitioner thus ceased to be the
owner thereof. Nor is he entitled to the possession of the vehicle; together with his
ownership, petitioner lost his right of possession over the vehicle. His argument that
respondent is a buyer in bad faith, when the latter nonetheless proceeded with the
purchase and registration of the vehicle on March 7, 2011, despite having been apprised
of petitioner's earlier November, 2010 "Failed to Return Vehicle" report filed with the
PNP-HPG, is unavailing. Petitioner had no right to file said report, as he was no longer
the owner of the vehicle at the time; indeed, his right of action is only against his agent,
for collection of the proceeds of the sale.

Subsection C, Section 1, Rule 57 of the Rules of Court require that for a writ of
preliminary attachment to be granted in an action to recover property, the taking,
detainment, or conversion of the subject property was unjust or fraudulently carried
out. Further, the property must have been concealed, removed, or disposed of, to
prevent the applicant from recovering it. The taking contemplated in Rule 60 is not
unjust or fraudulent but is wrongful, therefore fraud is not a necessary element in order
for replevin to be granted. Furthermore, the reason for the detention must be
intimated by the applicant but does not require that said detention is effected through
concealment, removal, or disposal of the property or any part thereof, as was held in
Spouses Limso v Philippine National Bank (GR 158622, 27 January 2016).

The Court held in Malayan Insurance Company v Alibudbud (GR 209011, 20 April 2016)
that Replevin is an action whereby the owner or person entitled to repossession of
goods or chattels may recover those goods or chattels from one who has wrongfully
distrained or taken, or who wrongfully detains such goods or chattels. It is designed to
 permit one having right to possession to recover property in specie from one who has
wrongfully taken or detained the property. The term may refer either to the action
itself, for the recovery of personalty, or to the provisional remedy traditionally
associated with it, by which possession of the property may be obtained by the plaintiff
and retained during the pendency of the action. In the same case, the trial court
granted a writ of preliminary attachment in the action for replevin. In attaching the
subject property, the Court shows the distinction between the two.

3. There is improper or irregular issuance or enforcement of the writ of preliminary

attachment where the action in which the application is filed does not fall within the
purview of the exclusive list set forth in Section 1, Rule 57 of the Rules of Court or the
element of fraud is not established by the applicant.

In the case of Excellent Quality Apparel, Inc v Visayan Surety & Insurance Corporation (GR
212025, 1 July 2015), the Court held that The party applying for the order of attachment
must thereafter give a bond executed to the adverse party in the amount fixed by the
court in its order granting the issuance of the writ. The purpose of an attachment bond
is to answer for all costs and damages which the adverse party may sustain by reason of
the attachment if the court finally rules that the applicant is not entitled to the writ.

In Phil-Air Conditioning Center v RCJ Lines (GR 193821, 23 November 2015), the Court
held that to merit an award of actual damages arising from a wrongful attachment, the
attachment defendant must prove, with the best evidence obtainable, the fact of loss
or injury suffered and the amount thereof. Such loss or injury must be of the kind which
is not only capable of proof but must actually be proved with a reasonable degree of
certainty. As to its amount, the same must be measurable based on specific facts, and
not on guesswork or speculation.

The Court held in Development Bank of the Philippines v Judge Carpio (GR 195450, 1
February 2017) that to recover damages on a replevin bond (or on a bond for
preliminary attachment, injunction or receivership), it is necessary (1) that the
defendant-claimant has secured a favorable judgment in the main action, meaning that
the plaintiff has no cause of action and was not, therefore, entitled to the provisional
remedy of replevin; (2) that the application for damages, showing claimant's right
thereto and the amount thereof, be 􀁄led in the same action before trial or before appeal
is perfected or before the judgment becomes executory; (3) that due notice be given to
the other party and his surety or sureties, notice to the principal not being sufficient;
and (4) that there should be a proper hearing and the award for damages should be
included in the final judgment.

4. The bond required to be given by the applicant in preliminary attachment, preliminary

injunction/preliminary mandatory injunction, and receivership are for the purpose of
securing the costs which may be adjudged to the adverse party and all damages that he
may sustain by reason of the granting of provisional remedy prayed for, if the court
shall finally adjudge that the applicant was not entitled there to. The value of the bond
shall be determined by the court.

This was explained by the Court in the case of Excellent Quality Apparel, Inc v Visayan
Surety & Insurance Corporation (GR 212025, 1 July 2015), which discussed that any
application for damages arising from the improper, irregular or excessive attachment
shall be governed by Section 20, Rule 57, which provides:

Sec. 20. Claim for damages on account of improper, irregular or

excessive attachment. An application for damages on account of improper, irregular or
excessive attachment must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due notice to the attaching party and his
surety or sureties, setting forth the facts showing his right to damages and the amount
thereof. Such damages may be awarded only after proper hearing and shall be included
in the judgment on the main case. If the judgment of the appellate court be favorable to
the party against whom the attachment was issued, he must claim damages sustained
during the pendency of the appeal by filing an application in the appellate court, with
notice to the party in whose favor the attachment was issued or his surety or sureties,
before the judgment of the appellate court becomes executory. The appellate court
may allow the application to be heard and decided by the trial court. Nothing herein
contained shall prevent the party against whom the attachment was issued from
recovering in the same action the damages awarded to him from any property of the
attaching party not exempt from execution should the bond or deposit given by the
latter be insufficient or fail to fully satisfy the award.

Further, the current provision of Section 20, Rule 57 of the 1997 Rules of Civil Procedure
covers application for damages against improper attachment, preliminary injunction,
receivership, and replevin.

In the same case, the Court cited the requisites under Section 20, Rule 57 in order to
claim damages against the bond, as follows: (1) the application for damages must be
filed in the same case where the bond was issued; (2) such application for damages
must be filed before the entry of judgment; and (3) after hearing with notice to the
surety.

The Court held in Development Bank of the Philippines v Judge Carpio (GR 195450, 1
February 2017) that to avoid multiplicity of suits, all incidents arising from the same
controversy must be settled in the same court having jurisdiction of the main action.
Thus, the application for damages must be 􀁄led in the court which took cognizance of
the case, with due notice to the other parties.

Section 2, Rule 60 of the Rules of Court provide that the applicant for replevin must give
a bond, executed to the adverse party in double the value of the property for the return
of the property to the adverse party if such return be adjudged, and for the payment to
the adverse party of such sum as he may recover from the applicant in the action.

The bonds given in applications for preliminary injunction/preliminary mandatory

injunction may also be on the ground of insufficiency of the application; whereas for
receivership, where appointment was obtained without sufficient cause, as was held in
Phil-Air Conditioning Center v RCJ Lines (GR 193821, 23 November 2015).