JACOBUS BERNHARD HULST v. PR BUILDERS INC. (G.R. No.

156364) FACTS: The Petitioner and his spouse, both Dutch Nationals, entered into a Contract to Sell with PR Builders, Inc. to purchase a 210-sq m residential unit in the respondent's townhouse project in Batanagas. When PR Builder's failed to comply with their verbal promise to complete the project, the spouses Hulst filed a complaint for recession of contract with interest, damages and attorney's fees before the Housing and Land Regulatory Board (HLURB), which then was granted. A Writ of Execution was then addressed to the Ex-Officio Sheriff of the RTC of Tanauan, Batangas, but upon the complaint of the respondent, the levy was set aside, leaving only the respondent's personal properties to be levied first. The Sheriff set a public auction of the said levied properties, however, the respondent filed a motion to quash Writ of levy on the ground that the sheriff made an over levy since the aggregate appraised value of the properties at P6,500 per sq m is P83,616,000. Instead of resolving the objection of the respondent's regarding the auction, the Sheriff proceeded with the auction since there was no restraining order from the HLURB. The 15 parcels of land was then awarded to Holly Properties Realty at a bid of P5,450,653. On the same day, the Sheriff remitted the legal fees and submitted to contracts of sale to HLURB, however, he then received orders to suspend proceedings on the auction for the reason that the market value of the properties was not fair. There was disparity between the appraised value and the value made by the petitioner and the Sheriff, which should've been looked into by the Sheriff before making the sale. While an inadequacy in price is not a ground to annul such sale, the court is justified to such intervention where the price shocks the conscience. ISSUE: 1. Whether or not the Sheriff erred in the value that was attached to the properties during the auction and as well as disregarding the objection made by the respondent's? 2. Whether or not the market value of the said property was inadequate? 2. Whether or not the spouses Hulst's request for damages is actionable? HELD: 1. No. According to the Rules of Court, the value of the property levied is not required to be exactly the same as the judgment debt. In the levy of property, the Sheriff does not determine the exact valuation of the levied property. The Sheriff is left to his own judgment. He should be allowed a reasonable margin between the value of the property levied upon and the amount of the execution; the fact that the Sheriff levies upon a little more than is necessary to satisfy the execution does not render his actions improper. In the absence of a restraining order, no error can be imputed to the Sheriff in proceeding with the auction sale despite the pending motion to quash the levy filed by the respondents with the HLURB. Sheriffs, as officers charged with the task of the enforcement and/or implementation of judgments, must act with considerable dispatch so as not to unduly delay the administration of justice. It is not within the jurisdiction of the Sheriff to consider and resolve respondent's objection to the continuation of the conduct of the auction sale. The Sheriff has no authority, on his own, to suspend the auction sale. His duty being ministerial, he has no discretion to postpone the conduct of the auction sale. 2. No. The HLURB Arbiter and Director had no sufficient factual basis to determine the value of the levied property. The Appraisal report, that was submitted, was based on the projected value of the townhouse project after it shall have been fully developed,

that is, on the assumption that the residential units appraised had already been built. Since it is undisputed that the townhouse project did not push through, the projected value did not become a reality. Thus, the appraisal value cannot be equated with the fair market value. 3. No. Under Article 12, Sec.7 of the 1987 Constitution, foreign nationals, the spouses Hulst, are disqualified form owning real property. However, under article 1414 of the Civil Code, one who repudiates the agreement and demands his money before the illegal act has taken place is entitled to recover. Petitioner is therefore entitled to recover what he has paid, although the basis of his claim for rescission, which was granted by the HLURB, was not the fact that he is not allowed to acquire private land under the Philippine Constitution. But petitioner is entitled to the recovery only of the amount of P3,187,500.00, representing the purchase price paid to respondent. No damages may be recovered on the basis of a void contract; being nonexistent, the agreement produces no juridical tie between the parties involved. Further, petitioner is not entitled to actual as well as interests thereon, moral and exemplary damages and attorney's fees.