G.R. No. L-13281; August 31, 1960
SIARI VALLEY ESTATES, INC., petitioner, vs. FILEMON LUCASAN, ET AL., respondents.

FACTS

A final and executory decision ordered respondent Filemon Lucasan to deliver cattle or pay their value plus damages to petitioner Siari Valley Estates, Inc. To execute the judgment, the sheriff levied on and sold several parcels of Lucasan’s land at public auction to the petitioner on January 14, 1956. After the redemption period expired, the sheriff issued a final certificate of sale on January 26, 1957. The petitioner obtained a writ of possession but failed to take possession, prompting a motion to enforce it. Lucasan opposed, claiming one parcel (Parcel 1) contained a house he extrajudicially constituted as a family home on June 21, 1955, and that the levy and sale of this parcel were invalid. The trial court initially ordered possession granted to the petitioner but later, on August 23, 1957, amended its order, allowing possession of all lands except Parcel 1, declaring the levy and sale of that parcel null and void for non-compliance with legal requirements. The petitioner’s motion for reconsideration was denied, leading to this certiorari petition. Parcel 1 is registered land under Certificate of Title No. OCT-2492 in Lucasan’s name, with a house declared at a substantial value.

ISSUE

1. Whether the levy and subsequent sale of the registered land (Parcel 1) were validly executed.
2. Whether the family home extrajudicially constituted on Parcel 1 is exempt from execution for the debt represented by the money judgment against Lucasan.

RULING

1. On the validity of the levy and sale: The levy and sale of Parcel 1 were null and void. The sheriff’s notice of levy described the property as unregistered land and was registered under Act 3344, failing to include a reference to the certificate of title number and its registration book details as strictly required by Section 14, Rule 39, in relation to Section 7(a), Rule 59, of the Rules of Court for registered lands. This omission rendered the levy legally ineffective to bind the property for execution. Consequently, the sale based on this defective levy was also invalid.
2. On the exemption of the family home: The family home is not exempt from execution in this case. Under Article 243(2) of the new Civil Code, an extrajudicially formed family home is exempt from execution except for debts incurred before its declaration was recorded. The Court ruled that the money judgment against Lucasan, even though pending appeal at the time the family home was constituted, qualifies as a “debt” within the meaning of the article. The purpose of the exception is to prevent debtors from acting in bad faith to defeat creditors’ claims. A debtor in good faith would wait for a final judgment before constituting a family home. Allowing exemption here would enable circumvention of the law to the creditor’s prejudice.
DISPOSITIVE:
The order of the lower court (declaring the levy and sale of Parcel 1 null and void and denying possession of it to the petitioner) is affirmed. The petitioner is not precluded from filing a new petition for execution in strict compliance with the rules. No costs.