G.R. No. 17709 ; June 20, 1922
FAUSTINO LICHAUCO, plaintiff-appellee, vs. GREGORIO OLEGARIO and DALMACIO OLEGARIO, defendants-appellants.

FACTS

Faustino Lichauco obtained a final judgment against Gregorio Olegario. To satisfy the judgment, Gregorio’s real properties were sold at public auction, with Lichauco as the highest bidder. On the same day as the auction, Gregorio sold his right of redemption over the properties to his cousin, Dalmacio Olegario. Lichauco’s judgment was not fully satisfied, so the sheriff proceeded to sell Gregorio’s right of redemption at another auction, where Lichauco again was the highest bidder. However, this second sale could not be registered because the sale from Gregorio to Dalmacio was already recorded. Lichauco filed an action to have the transfer of the right of redemption declared fraudulent and void, offering to accept the right of redemption in full satisfaction of the remaining judgment balance.

ISSUE

1. Whether an execution debtor can sell his right of redemption.
2. Whether an execution creditor, after purchasing the property at auction, can have another execution levied on the same judgment to reach the debtor’s right of redemption.
3. Whether the execution creditor has the right to question the debtor’s transfer of the right of redemption.

RULING

1. Yes. An execution debtor is legally authorized to sell his right of redemption, as established under the Code of Civil Procedure.
2. No. An execution creditor who purchases property at an auction under his own judgment is not entitled to have another execution issued on the same judgment to levy upon the debtor’s right of redemption over the same property. To allow this would nullify the right of redemption, which is established by law for reasons of public policy. The law does not permit a judgment creditor to effectively annul this right.
3. No. Since the plaintiff was not legally entitled to levy upon the right of redemption under the same judgment, the alienation of that right by the debtor could not legally affect or damage the plaintiff. Therefore, the plaintiff has no right of action to question the transfer, regardless of whether it was fraudulent or not.
The Supreme Court reversed the lower court’s judgment. The period for exercising the right of redemption, interrupted by these proceedings, was ordered to continue for one year from notification of this decision, deducting the time between the auction sale and the filing of the complaint.