Jose E. Honrado vs. Court of Appeals

G.R. No. 166333. November 25, 2005.*



In 1997, Premium Agro-Vet Products, Inc. (Premium) filed a complaint for sum of money against Jose Honrado, who was doing business  for failure to pay veterinary products purchased on credit amounting to P240,765.00. For failure of Honrado, as well as his counsel, to appear at the pre-trial conference, he was declared in default. Premium filed a writ of execution for the sale of property in public auction which was later sold to the private respondent. The corresponding Certificate of Sale was issued and annotated at the dorsal portion of the title.

It turned out that the parcel of land is a family home in which Honrado later filed a Motion to Declare Properties Exempt from Execution under Article 155 of the Family Code. He alleged property is exempt from execution because it is a family home which had been constituted as such before he incurred his indebtedness with Premium. He also alleged that he and his family had no other real property except the land which was levied upon and sold on execution. Premium opposed the motion on the ground that said claim has been mooted by the lapse of the redemption period.


Whether or not the family home is exempt from execution


While it is true that the family home is exempt from execution or forced sale under Article 153 of the Family Code, such claim for exemption should be set up and proved to the Sheriff before the sale of the property at public auction, failure to do so would estopped the party from later claiming the exemption. Petitioner previously failed to appear in the pre-trial conference, failed to submit his appellant’s and raised the issue of exemption almost a year from the auction sale.

 Although there is no prescribed period within which to claim the exemption, the rule is, nevertheless, well-settled that the right of exemption is a personal privilege granted to the judgment debtor and as such, it must be claimed not by the sheriff, but by the debtor himself at the time of the levy or within a reasonable period thereafter; “In the absence of express provision it has variously held that claim (for exemption) must be made at the time of the levy if the debtor is present, that it must be made within a reasonable time, or promptly, or before the creditor has taken any step involving further costs, or before advertisement of sale, or at any time before sale, or within a reasonable time before the sale, or before the sale has commenced, but as to the last there is contrary authority.” In the light of the facts above summarized, it is self-evident that appellants did not assert their claim of exemption within a reasonable time. Certainly, reasonable time, for purposes of the law on exemption, does not mean a time after the expiration of the one-year period provided for in Section 30 of Rule 39 of the Rules of Court for judgment debtors to redeem the property sold on execution, otherwise it would render nugatory final bills of sale on execution and defeat the very purpose of execution—to put an end to litigation. We said before, and We repeat it now, that litigation must end and terminate sometime and somewhere, and it is essential to an effective administration of justice that, once a judgment has become final, the winning party be not, through a mere subterfuge, deprived of the fruits of the verdict. We now rule that claims for exemption from execution of properties under Section 12 of Rule 39 of the Rules of Court must be presented before its sale on execution by the sheriff.