G.R. No. L-34317 and L-34335. September 30, 1974.
HON. WALFRIDO DE LOS ANGELES, et al. vs. COURT OF APPEALS, PETRA FARIN and BENJAMIN FARIN; and MARCELO STEEL CORPORATION, et al. vs. PETRA FARIN, et al.

FACTS

These consolidated cases involve a second motion for reconsideration of the Supreme Court’s November 25, 1973 decision. The controversy stemmed from a foreclosure sale conducted by the sheriff concerning a property mortgaged by respondents Petra and Benjamin Farin to petitioner Marcelo Steel Corporation. The Farins had filed a complaint in the Court of First Instance to enjoin the foreclosure sale, and the trial court initially issued a status quo order. However, this order was subsequently lifted. Upon the lifting of the order, the sheriff proceeded with the foreclosure sale. The Farins challenged the validity of this sale.
The Court of Appeals made factual findings on the matter. The petitioners, including the judge, the sheriff, and Marcelo Steel Corporation, elevated the case to the Supreme Court, arguing that the appellate court’s decision should be reversed. The core dispute revolves around whether the foreclosure sale was validly conducted after the lifting of the trial court’s interim order and whether the property was considered in custodia legis due to the pending litigation.

ISSUE

The principal issue is whether the Supreme Court’s prior decision, which upheld the validity of the foreclosure sale, should be reconsidered based on the movants’ contention that it disregarded the factual findings of the Court of Appeals and that the property was in custodia legis.

RULING

The Supreme Court denied the second motion for reconsideration. The Court held that its decision did not disregard the factual findings of the Court of Appeals but was, in fact, squarely based upon them. Upon review of those facts, the Court found no irregularity in the sheriff’s conduct. The sheriff merely performed his ministerial duty under Act No. 3135 , as amended, to conduct the foreclosure sale once the trial court’s status quo order was lifted.
The Court explicitly rejected the argument that the property was in custodia legis. It ruled that the action to enjoin the foreclosure was a personal action (in personam) and did not bring the property itself under the court’s jurisdiction. The status quo order was merely a directive enforceable through contempt powers, not an attachment that placed the property in legal custody. Furthermore, the pendency of an appeal by the Farins from the trial court’s decision did not automatically bar the foreclosure sale. The Court reiterated the doctrine from De Garcia vs. San Jose that it is ministerial for a court to issue a writ of possession in favor of the purchaser at a foreclosure sale. The mortgagor’s sole remedy is to challenge the sale’s validity by a petition to set it aside, filed within thirty days after the purchaser takes possession, following the summary procedure under the Land Registration Act. Since the Farins did not avail themselves of this specific remedy, the sale and the consequent writ of possession in favor of Marcelo Steel Corporation must be upheld. The motion was denied for lack of merit.