G.R. No. 156364 September 3, 2007
JACOBUS BERNHARD HULST, petitioner, vs. PR BUILDERS, INC., respondent.

FACTS

Petitioner Jacobus Bernhard Hulst and his spouse entered into a Contract to Sell with respondent PR Builders, Inc. for a residential unit. Upon respondent’s failure to complete the project, the spouses filed a complaint with the HLURB, which ruled in their favor, ordering rescission and payment of damages. After the spouses divorced, petitioner alone pursued the case. Following an unsatisfied writ of execution on personal properties, the HLURB Arbiter issued an Alias Writ. The sheriff levied on 15 parcels of land owned by the respondent. Respondent filed an Urgent Motion to Quash the Writ of Levy, arguing overlevy as the properties’ alleged aggregate value vastly exceeded the judgment award. Despite this pending motion and an objection raised at the time of auction, the sheriff proceeded with the sale, selling all properties to a single bidder for a sum that satisfied the judgment debt.
On the very afternoon of the auction sale, the sheriff received an order from the HLURB Arbiter to suspend the proceedings. Months later, the HLURB Arbiter and Director issued an Order setting aside the levy and sale. They found the disparity between the claimed market value (over P83 million) and the sheriff’s valuation (around P6 million) to be so egregious as to warrant intervention, noting the timely objection and the single bidder. The Court of Appeals affirmed this order, prompting petitioner’s appeal to the Supreme Court.

ISSUE

Whether the Court of Appeals erred in affirming the HLURB’s order setting aside the execution sale of respondent’s real properties.

RULING

No, the Court of Appeals did not err. The Supreme Court affirmed the decision, upholding the HLURB’s authority to control the execution of its judgments and prevent abuse. The legal logic centers on the principle that while mere inadequacy of price is generally insufficient to void an execution sale, a grossly inadequate price coupled with other irregularities can justify judicial intervention. Here, the shocking disparity in valuation—P83 million versus P6 million—was deemed sufficient to “shock the conscience,” a recognized exception to the general rule.
Critically, the sale was conducted despite a timely filed motion to quash the levy and an objection raised at the auction, indicating procedural irregularities. The sheriff’s failure to properly ascertain the property’s value before levy, as required by the Rules of Court to ensure the levy is not grossly disproportionate to the judgment, rendered the levy and subsequent sale voidable. The HLURB acted within its discretion to set aside the sale to prevent a manifest injustice, as the respondent’s right to property was prejudiced by an execution process tainted by the sheriff’s failure to exercise proper diligence and by the gross inadequacy of the price obtained. The execution of a judgment must not be oppressive, and the HLURB correctly intervened to correct the abuse in the enforcement process.