Right reason, wrong timing

The family home is a sacred symbol of family love and is the repository of cherished memories that last during one’s lifetime. Hence it is exempt from execution. But this case of the spouses Cely and Celso is an exception.

This case involved a parcel of land in a suburban subdivision purchased by Cely and Celso while they were still cohabiting before their marriage. It was covered by TCT No. T-76.725 registered in the name of Cely. A house was later constructed on the land which the spouses thereafter occupied as their family home after they got married in January 1987.

Sometime in September 1988, Cely obtained a loan from Ernie in the amount of P100,000 which was secured by a mortgage over the subject property. As payment, Cely issued a check payable to Ernie. But the check bounced upon presentment for payment on maturity date because the account was already closed. Ernie’s demand for payment of said check however remained unheeded.

So Ernie filed a complaint for violation of the bouncing checks law (BP22) against the spouses. On Oct. 21, 1992, the Regional Trial Court rendered a decision acquitting Cely and Celso but ordering them to pay Ernie the amount of P100,000 with legal interest thereon from date of demand until fully paid.

On March 15, 1993, a writ of execution was issued and the sheriff levied upon the subject property. On March 9, 1994 the subject property was sold at public auction with Ernie emerging as the highest bidder. So a corresponding certificate of sale was issued in his favor. Then on March 24, 1995, a Final Deed of Sale was issued in favor of Ernie upon failure of Cely and Celso to redeem the property. As a consequence, a new TCT (T-76 725) was issued in the name of Ernie.

Then about 4 years later, when Ernie filed a complaint for ejectment to get possession of the property, the spouses claimed for the first time that they cannot be ejected from it because they are still the owners of the property since it was their family home which was exempt from execution. Hence, they claimed that the Sheriff’s auction sale of said property was a nullity. Were the spouses correct?

The rule is that family homes constructed before the effectivity of the Family Code (FC) on August 3, 1988, must be constituted either judicially or extra-judicially as a family home before they could be exempted. If they were not so constituted before the FC’s effectivity, but were existing thereafter, they are still considered family homes by operation of law and are prospectively entitled to exemption from execution.

Here the subject property became a family residence of the couple in January 1987, and there is no showing that it was judicially or extra-judicially constituted as such. Even then, when the FC took effect in August 3, 1988, it became a family home by operation of law and was prospectively exempt from execution.

But in this connection, the rule is that the family home’s exemption must be set up and proved to the Sheriff before the sale of the property at public auction. In this case the couple did not claim or prove that subject property was exempt from execution, They remained silent when the Sheriff levied on the property then sold it at public auction. They did not even redeem it and allowed the issuance of a new title in Ernie’s favor. It was only after 4 years from the auction sale, when Ernie was ejecting them that they claimed it as their family home. Their negligence or omission estopped them from claiming exemption (Oliva De Mesa vs. Acero, Jr. G.R. 185064, January 16, 2012, 663 SCRA, 40).

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