De Leon v Salvador

Doctrine: PRICE ON FORCED SALES DISTINGUISHED FROM PRICE ON ORDINARY SALES In ordinary sales, by reasons of equity, a transaction may be invalidated on the ground of inadequacy of price. In forced sales, as when a sale is made at a public auction, the owner has the right to redeem. When there is a right to redeem, inadequacy of price is immaterial because judgment debtor can better acquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained from the auction sale.

De Leon v. Salvador GR No L-30871, 28 December 1970 Teehankee, J.:

Facts: Eusebio Bernabe’s (judgment debtor) properties were garnished and sold in an auction sale to satisfy a judgment in a civil case for damages, ordered by the court of Judge Fernando Cruz, in favor of Enrique De Leon. The highest bidder for the total sum of P30,194.00 was Aurora de Leon, sister of judgment creditor and herein petitioner. Bernabe was given a redemption period of 1 year commencing from the time of the auction sale, however, instead of redeeming his properties, he filed a case to annul the auction sale on the ground of gross inadequacy of price and for the ordering of a new auction sale. He claimed that his properties, taken together, can cost around P400,000.00. This second case was assigned to the court of Judge Serafin Salvador who issued a writ of injunction against respondents and summarily granted the motions of Bernabe. Hence, Aurora files this case questioning the jurisdiction of Judge Salvador to issue such orders. Issue: 1. Can the auction sale be annulled on the ground of inadequacy of price? Held: NO. In ordinary sales, by reasons of equity, a transaction may be invalidated on the ground of inadequacy of price. In forced sales, as when a sale is made at a public auction, the owner has the right to redeem. When there is a right to redeem, inadequacy of price is immaterial because judgment debtor can better acquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained from the auction sale.