G.R. No. 123290 August 15, 1997
AURORA DE LEON, petitioner, vs. COURT OF APPEALS, and CITIBANK, N.A. (Manila Branch), INTEGRATED CREDIT & CORPORATE SERVICES COMPANY, ET AL., respondents.

FACTS

Petitioner Aurora de Leon was granted a credit line by respondent Citibank. She overdrew from the line, leading Citibank to file a complaint for recovery of the amounts and to obtain a writ of attachment over her real properties covered by TCT Nos. 3723 to 3731. The parties entered into a Compromise Agreement, which was approved by the court. Petitioner failed to comply, prompting Citibank to seek execution. The attached properties were sold at public auction to respondent Integrated Credit and Corporate Services (ICCS). Prior to the auction, petitioner had executed a Deed of Absolute Sale over the same properties in favor of Amicus Construction and Development Corporation, after the mortgagees (Choa and Bediones, who were also officers of Amicus) cancelled their mortgage. Petitioner later filed a complaint to annul that deed of sale. After the redemption period lapsed and a Final Deed of Sale was issued to ICCS, petitioner filed a separate action to annul the certificate of sale from the execution. This case was consolidated with the original collection case. The trial court (MADAYAG court) ruled that petitioner was no longer a real party in interest as she had sold the properties to Amicus before the execution sale, and ordered the issuance of a writ of possession in favor of Ovation, which had purchased the lots from ICCS. The Court of Appeals denied petitioner’s certiorari petition.

ISSUE

May a judgment debtor dispute the validity of the execution sale of properties belonging to him at the time of the attachment thereof but which were later sold by him in favor of a third person?

RULING

No. The Supreme Court dismissed the petition. The Court held that petitioner was not a real party in interest to question the execution sale. A real party in interest is one who would be benefited or injured by the judgment, or is entitled to the avails of the suit. At the time of the execution sale and the filing of the action to annul it, petitioner had already sold the properties to Amicus. By virtue of that sale, she transferred all her rights and interests to Amicus as her successor-in-interest. Consequently, the right to redeem the properties or to question irregularities in the execution sale resided with Amicus, not with petitioner. The Court further noted petitioner’s conduct, including her failure to object to the sale promptly, her delivery of bouncing checks, and her failure to redeem the properties, which indicated a strategy to delay justice. The trial court correctly issued the writ of possession in favor of the purchaser’s successor.