THIRD DIVISION
|
GERMAN CAYTON and the
HEIRS OF THE DECEASED SPOUSE CECILIA CAYTON, Petitioners, - versus - ZEONNIX TRADING
CORPORATION; SPOUSES VICENTE MAÑOSCA and Respondents. |
G.R. No. 169541
Present: CARPIO, J.,
Chairperson, CARPIO MORALES,*
VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: October 9,
2009 |
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Before the Court is a petition for review on certiorari assailing the Decision[1]
dated September 27, 2004 and the Resolution[2]
dated September 5, 2005 of the Court of Appeals (CA) in CA-G.R. CV No. 71294.
At the heart of the controversy is a three hundred
fifty-seven (357) square meter residential house and lot located in BF Homes,
Phase III, Sucat, Parañaque, covered by Transfer Certificate of Title (TCT) No.
S-90836 of the Registry of Deeds of Manila in the name of Vicente Mañosca,
married to Lourdes Mañosca (Mañoscas).[3]
On May 24, 1980, the Mañoscas executed a deed of real
estate mortgage over the house and lot as security for the loan of one hundred
fifty thousand pesos (P150,000.00) that they obtained from Family
Savings Bank (FSB). On June 2, 1980, the real estate mortgage was annotated on
TCT No. S-90836.[4]
On July 21, 1981, a levy on attachment was annotated on TCT
No. S-90836 in favor of Zeonnix Trading Corporation (Zeonnix) pursuant to a
writ of preliminary attachment issued by the Court of First Instance of Pasay
City in Civil Case No. 9225-P, a case for recovery of a sum of money, entitled
“Zeonnix Trading Corporation v. Vicente
D. Mañosca, doing business under the name and style of Vic D. Mañosca
Brokerage.” The case was re-raffled to the Regional Trial Court (RTC) of
On September 1, 1981, a Deed of Absolute Sale with
Assumption of Mortgage[6]
was executed between the Mañoscas and the spouses German G. Cayton and Cecilia
R. Cayton (Caytons) over the subject house and lot for the amount of one
hundred sixty thousand pesos (P160,000.00). As part of the
consideration, the Caytons assumed payment to FSB of the real estate mortgage
amortizations on the property. The Caytons also paid the real estate taxes on
the property beginning in 1982.[7]
The Deed of Absolute Sale with Assumption of Mortgage contained the following
stipulations:
2. That the Vendee shall pay Vendors the
sum of ONE HUNDRED SIXTY THOUSAND (P160,000.00) PESOS,
the amount of ONE HUNDRED EIGHTEEN THOUSAND FIVE HUNDRED SIXTY THREE PESOS and
SIXTEEN CENTAVOS (P118,563.16) of which have been paid by the former unto the
latter and the balance of FORTY ONE THOUSAND FOUR HUNDRED THIRTY SIX PESOS and
EIGHTY FOUR CENTAVOS (P41,436.84) to be paid by the
Vendee unto the Vendors within six (6) months in six equal monthly installments
commencing December 7, 1981 and every 7th of the month thereafter
until fully paid, said installments shall be covered by postdated checks of the
Vendee.
3. That as part of the consideration of
this sale, the Vendee agrees to assume as [he] hereby assumes, all the duties
and obligations of the Vendors imposed upon the latter on the Deed of Real
Estate Mortgage executed by the Vendors in favor of Family Savings Bank
denominated as Doc. 388; Page No. 79; Book No. V; Series of 1980 of the
Notarial Registry of Notary Public Fe Tengco Becina; that Vendee’s assumption
of the mortgage obligation shall be limited only to the amortization that will
fall due [in] September 1981 and that all arrears in the amortizations,
penalties and charges that have accrued before said date shall be borne and
paid by the Vendors.
x x x x
7. That Vendors hereby warrant that save to
the restrictions annotated in the Transfer of Title, the said property is free
from any lien and encumbrance and that Vendors undertake to defend title to the
same from whatever claim.[8]
The Caytons failed to register the deed of absolute sale
with assumption of mortgage because the owner’s duplicate copy of TCT No.
S-90836 was in the possession of FSB in view of the loan of the Mañoscas
wherein the property was used as security.[9]
Meanwhile, on February 3, 1984, a Decision[10]
was rendered by the RTC in Civil Case No. 2173, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered sentencing defendant
Vicente D. Mañosca, doing business under the name and style “Vic D. Mañosca
Brokerage” to pay plaintiff [Zeonnix] the amount of P167,037.00, with interest thereon at the rate of 12% per
annum from May 12, 1981, until fully paid.
Defendant
is likewise ordered to pay plaintiff the amount of P20,000.00 as and for attorney’s fees and the costs of suit.
SO
ORDERED.[11]
Subsequently, the Caytons defaulted in the payment to FSB
of the monthly amortizations, and the property was extrajudicially foreclosed.
On April 23, 1984, the property was sold at public auction. The Caytons were
declared as the highest bidder, in the amount of ninety-five thousand pesos (P95,000.00).
A Certificate of Sale[12]
was issued by the Ex-Officio Sheriff, and the same was annotated on TCT No.
S-90836 on April 25, 1984.[13]
On April 15, 1985, the Caytons filed before the RTC of
Makati a civil case for quieting of title and/or removal/prevention of cloud on
title against Zeonnix. The case was docketed as Civil Case No. 10316.[14]
The Caytons claimed that, with the execution of the deed of absolute sale with
assumption of mortgage, all the rights, interests and participation over the
property had been transferred to them by the Mañoscas, including the right of
redemption. Thus, Zeonnix had no more right of redemption to speak of.[15]
On April 17, 1985, the Caytons filed an amended complaint,
in which they impleaded the Mañoscas and the then Clerk of Court and the Senior
Deputy Sheriff of
On April 18, 1985, Zeonnix, as judgment creditor of the
Mañoscas in Civil Case No. 2173, offered to redeem the property by tendering to
the Clerk of Court of the RTC of Makati one hundred six thousand four hundred
pesos (P106,400.00) through Manager’s Check No. DV008913 dated April 15,
1985. The amount tendered represented the purchase price of the property and
interest that had accrued thereon.[17]
On May 7, 1985, the Caytons filed a supplemental complaint
in which they alleged that assuming that Zeonnix had the right of redemption,
still the amount it tendered was insufficient to effect a valid redemption
because it failed to include the amount of real estate taxes paid by them,
amounting to two thousand one hundred seventy-five pesos (P2,175.00).[18]
On June 4, 1985, Zeonnix tendered to the Clerk of Court of
Makati the additional amount of P2,175.00 to cover the real estate taxes
paid by the Caytons. The latter, however, maintained that the tender of the
deficiency amount representing the real estate taxes did not cure the defect
because the payment was done beyond the period of redemption, which lapsed on
April 26, 1985.[19]
On March 20, 2001, the RTC rendered a Decision in Civil
Case No. 10316, the dispositive portion of which reads:
WHEREFORE,
in view of the foregoing, the Court hereby renders judgment in favor of the
plaintiffs [Caytons] and against the defendant [Zeonnix], holding that:
1)
defendant Zeonnix Trading
Corporation has no right of redemption over the property in question as against
the plaintiffs [Caytons];
2)
plaintiffs [Caytons] are the legitimate
owners of the property in question.
SO
ORDERED.[20]
Zeonnix filed an appeal with the CA, assigning the
following errors of the trial court: (1) the RTC erred in considering the
Caytons as owner-bidders in the foreclosure sale of the property and not as
ordinary bidders or buyers; (2) the RTC erred in ruling that Zeonnix was not
entitled to redeem the property, which was foreclosed by FSB; (3) the RTC erred
in not finding that Zeonnix had a superior or better right, by virtue of the
prior attachment/lien on the subject property, than the Caytons who were
negligent in buying it despite the recorded or existing attachment lien thereon
by Zeonnix; (4) the RTC erred in ruling that the deed of sale with assumption
of mortgage was not spurious or fictitious in character; and (5) the RTC erred
in not ruling that Zeonnix was entitled to damages and attorney’s fees.[21]
On September 27, 2004, the CA rendered a Decision,[22]
the fallo of which reads:
WHEREFORE, the appeal [is] GRANTED and the appealed Decision is REVERSED and SET ASIDE. In its place judgment is rendered dismissing the complaint,
and ordering the ex-officio Sheriff of Makati to accept and receipt for the
redemption price paid and to issue the corresponding certificate and other
papers of redemption to Zeonnix.
SO
ORDERED.[23]
In reversing the decision of the trial court, the
CA ratiocinated that:
The
levy on attachment was duly annotated and registered in the title of the
property on July 21, 1981[,] while the deed of sale with assumption of mortgage
was executed on September 1, 1981. The registration of the levy created a
constructive notice to the whole world and served to protect the interest of
Zeonnix. The Caytons therefore could not raise their mere childlike reliance on
the real estate agent to justify their ignorance of the recorded levy for they
should have checked the title with the Register of Deeds (tsn Oct. 3, 1986, p.
28). The Caytons did not even cause the registration of the deed of sale with
assumption of mortgage. Notable too are the payments of the monthly
amortizations by the Caytons with FSB wherein the bank in its receipts simply
acknowledged payments in the following manner: “Paid by Cecilia Cayton for the account of Vicente Mañosca” x x x.
This means that the bank while it received payments from the Caytons, however
it did not fully recognize them as the new owners.[24]
The Caytons filed a motion for reconsideration. However,
the CA denied the same in a Resolution[25]
dated September 5, 2005.
Hence, this petition.
The Caytons submitted the following grounds in support of
the petition:
I
THE COURT OF APPEALS ERRED IN RULING THAT PETITIONER GERMAN
CAYTON AND DECEASED SPOUSE ARE NOT SUCCESSORS-IN-INTEREST WHO HAVE PREFERENTIAL
RIGHT OVER THE SUBJECT PROPERTY THAN A REDEMPTIONER WHOSE RIGHT TO CLAIM AROSE
FROM A MONEY JUDGMENT.
II
THE COURT OF APPEALS ERRED IN RULING THAT THE PAYMENT OF
THE INSUFFICIENT REDEMPTION PRICE BY ZEONNIX AS REDEMPTIONER DID NOT RESULT IN
ITS FAILURE TO PERFECT ITS RIGHT OF REDEMPTION OVER THE SUBJECT PROPERTY.[26]
The petition is without merit and must be denied.
I
Section 27, Rule 39 of the Rules of Court provides:
Sec. 27. Who may redeem real
property so sold.
Real property sold as provided in
the last preceding section, or any part thereof sold separately, may be redeemed
in the manner hereinafter provided, by the following persons:
(a) The judgment obligor, or his
successor in interest in the whole or any part of the property;
(b) A creditor having a lien by
virtue of an attachment, judgment or mortgage on the property sold, or on some
part thereof, subsequent to the lien under which the property was sold. Such
redeeming creditor is termed a redemptioner.
Right of redemption is the prerogative to reacquire a
mortgaged property after registration of the foreclosure sale. It exists only
in the case of the extrajudicial foreclosure of the mortgage. No such right is
recognized in a judicial foreclosure unless the mortgagee is a bank.[27]
An attaching creditor acquires the right to redeem the debtor’s attached property
subsequently foreclosed extra-judicially by a third party.
The “successor-in-interest” of a
judgment debtor includes one to whom the debtor has transferred his statutory
right of redemption; one to whom the debtor has conveyed his interest in the property
for the purpose of redemption; one who succeeds to the interest of the debtor
by operation of law; one or more joint debtors who were joint owners of the
property sold; or his spouse or heirs.[28]
A “redemptioner,” on the other hand, is
a creditor with a lien subsequent to the judgment which was the basis of the
execution sale. If the lien of the creditor is prior to the judgment under
which the property was sold, he is not a redemptioner and, therefore, cannot
redeem because his interests in his lien are fully protected, since any
purchase at public auction of said property takes the same subject to such
prior lien which he has to satisfy. Unlike the judgment debtor, a redemptioner
must prove his right to redeem by producing the documents called for by Section
30, Rule 39[29] of
the Rules of Court.[30]
In the instant case, the Caytons aver that as
successor-in-interest of the Mañoscas by virtue of the deed of absolute sale
with assumption of mortgage, they have a better right than Zeonnix to redeem
the property. This stance deserves scant consideration.
Indeed, they are successors in interest of the
Mañoscas. However, their supposed title
or right over the property is unregistered and, as such, the same cannot affect
third persons. This is because it is registration that is the operative act to
convey or affect the land insofar as third persons are concerned. A deed,
mortgage, lease, or other voluntary instrument, except a will, purporting to
convey or affect conveyance involving registered land, shall not take effect as
a conveyance or bind the land but shall operate only as a contract between the
parties and as evidence of authority of the Register of Deeds to make
registration.[31]
The unregistered sale of the house and lot to the Caytons
by the Mañoscas cannot prejudice the right of redemption granted by law in
favor of Zeonnix. The levy on attachment of Zeonnix on the subject property was
duly recorded on TCT No. S-90836. Thus, the levy on attachment created a
constructive notice to all persons from the time of such registration.[32]
The record is notice to the entire world. All persons are charged with the
knowledge of what it contains. All persons dealing with the land so recorded,
or any portion of it, must be charged with notice of whatever it contains. The
purchaser is charged with notice of every fact shown by the record and is
presumed to know every fact which the record discloses.[33]
When a conveyance has been properly recorded, such record is
constructive notice of its contents and all interests, legal and equitable,
included therein. Under the rule of notice, it is presumed that the purchaser
has examined every instrument of record affecting the title. Such presumption
is irrefutable. He is charged with notice of every fact shown by the record and
is presumed to know every fact which an examination of the record would have
disclosed. This presumption may not be overcome by proof of innocence or good
faith. Otherwise, the very purpose and object of the law requiring a record
would be destroyed. Such presumption may not be defeated by proof of want of
knowledge of what the record contains, any more than one may be permitted to
show that he was ignorant of the provisions of the law. The rule that all
persons must take notice of the facts that the public record contains is a rule
of law. The rule must be absolute. Any variation would lead to endless
confusion and useless litigation.[34]
Zeonnix has acquired by operation of law the right of
redemption over the foreclosed properties. By virtue of the RTC decision in
Civil Case No. 2173, it had the right to redeem the property. This is pursuant
to Section 6 of Act No. 3135,[35]
as amended by Act No. 4118, which provides:
SECTION
6. In all cases in which an extrajudicial sale is made under
the special power hereinbefore referred to, the debtor, his successors in
interest or any judicial creditor or judgment creditor of said debtor, or any
person having a lien on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the same at any time within
the term of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred and sixty-four to
four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so
far as these are not inconsistent with the provisions of this Act.
The writ of attachment entitled the attaching creditor to
exercise the right to redeem the foreclosed properties. A writ of attachment
that has been levied on real property or any interest therein belonging to the
judgment debtor creates a lien which nothing can destroy but its dissolution.[36]
II
Section 28, Rule 39 of the Rules of Court provides for the
manner of payment in redemption:
Section 28. Time and manner of, and
amounts payable on, successive redemptions; notice to be given and filed.
The judgment obligor, or
redemptioner, may redeem the property from the purchaser, at any time within
one (1) year from the date of the registration of the certificate of sale, by
paying the purchaser the amount of his purchase, with one per centum per month
interest thereon in addition, up to the time of redemption, together with the
amount of any assessments or taxes which the purchaser may have paid thereon
after purchase, and interest on such last named amount at the same rate; and if
the purchaser be also a creditor having a prior lien to that of the
redemptioner, other than the judgment under which such purchase was made, the
amount of such lien, with interest.
Property so redeemed may again be
redeemed within sixty (60) days after the last redemption upon payment of the
sum paid on the last redemption, with two per centum thereon in addition, and
the amount of any assessments or taxes which the last redemptioner may have
paid thereon after redemption by him, with interest on such last-named amount,
and in addition, the amount of any liens held by said last redemptioner prior
to his own, with interest. The property may be again, and as often as a
redemptioner is so disposed, redeemed from any previous redemptioner within
sixty (60) days after the last redemption, on paying the sum paid on the last
previous redemption, with two per centum thereon in addition, and the amounts
of any assessments or taxes which the last previous redemptioner paid after the
redemption thereon, with interest thereon, and the amount of any liens held by
the last redemptioner prior to his own, with interest.
Written notice of any redemption must
be given to the officer who made the sale and a duplicate filed with the
registry of deeds of the place, and if any assessments or taxes are paid by the
redemptioner or if he has or acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner be given to the officer
and filed with the registry of deeds; if such notice be not filed, the property
may be redeemed without paying such assessments, taxes, or liens.
Accordingly, to constitute valid redemption, the amount
tendered must comply with the following requirements: (1) it should constitute
the full amount paid by the purchaser; (2) with one percent per month interest
on the purchase price in addition, up to the time of redemption; (3) together
with the amount of any assessments or taxes which the purchaser may have paid
thereon after purchase; (4) interest on the taxes paid by the purchaser at the
rate of one percent per month, up to the time of the redemption; and (5) if
the purchaser be also a creditor having a prior lien to that of the
redemptioner, other than the judgment under which such purchase was made, the
amount of such other lien, with interest.
In exercising the right of redemption, the tender of
payment must be for the full amount of the purchase price. Otherwise, to allow
payment by installments would be to allow the indefinite extension of the
redemption period.[37]
The amount tendered by Zeonnix may be considered sufficient
for purposes of redemption, although it failed to include the amount of taxes
paid by the Caytons. The payment of the full amount of the purchase price and
interest thereon should be deemed as substantial compliance, considering that
Zeonnix immediately paid the amount of taxes when apprised of the deficiency.
In Estanislao, Jr. v.
Court of Appeals,[38]
the Court relaxed its rules on the redemptioner’s failure to pay the taxes paid
by the purchaser. The Court ruled in this wise, viz.:
There are
additional amounts to be made in order to effect a valid redemption required by
law, but, as respondent Hi-Yield Realty, Inc. failed to comply with certain
requirements, petitioners' failure to pay these additional amounts may be
considered excused. As provided in Rule 39, §30 of the 1964 Rules of Court, the
redemptioner must also pay the assessment or taxes paid by the purchaser.
However, the latter must give notice to the officer who conducted the sale of
the assessments or taxes paid by him and file the same with the Registry of Deeds.
x x x.
x x x x
Petitioners
were not furnished by respondent Hi-Yield Realty, Inc. such statement of
account. Neither was such statement filed with the Registry of Deeds.
Respondent Hi-Yield Realty, Inc. claimed that a statement of account (Exh. 8-C
and Exh. 8-D) was furnished the office of Atty. Basco, the notary public who
had conducted the sale, as received by Elizabeth Roque, an employee therein.
However, Atty. Basco denied having received the statement. Petitioners were
therefore justified in not paying any assessments or taxes which respondent
Hi-Yield Realty, Inc. may have paid.[39]
Likewise, in Rosales
v. Yboa,[40]
the Court ruled that the failure to pay the delinquent real estate taxes on the
property will not render the redemption void. This is in consonance with the
policy of the law to aid rather than to defeat the right of redemption. The
pertinent portion of the decision reads:
In
fine, We hold that the failure of the mortgagor Pedro Oliverio to tender the
amount of P745.47 representing the delinquent real estate taxes of the
subject property, the registration fee of P3.00 and the interest thereon
of P0.04, the Sheriff's Commission in the sum of P99.82, and the
deficiency interest on the purchase price of the subject property, will not
render the redemption in question null and void, it having been established
that he has substantially complied with the requirements of the law to effect a
valid redemption, with his tender of payment of the purchase price and the
interest thereon within twelve (12) months from the date of the registration of
the sale. This ruling is in obedience of the policy of the law to aid rather
than to defeat the right of redemption.
WHEREFORE, in
light of the foregoing, the Decision dated September 27, 2004 and the
Resolution dated September 5, 2005 of the Court of Appeals in CA-G.R. CV No.
71294 are hereby AFFIRMED. Costs
against petitioners.
SO ORDERED.
ANTONIO
EDUARDO B. NACHURA
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Acting Chief
Justice
Chairperson
|
CONCHITA CARPIO MORALES Associate
Justice |
PRESBITERO J. VELASCO, JR. Associate
Justice |
DIOSDADO M. PERALTA
Associate
Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, I
certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
ANTONIO
T. CARPIO
Acting
Chief Justice
* Additional member in lieu of Associate Justice Minita V. Chico-Nazario per Special Order No. 720 dated October 5, 2009.
[1] Penned
by Associate Justice Roberto A. Barrios, with Associate Justices Amelita G.
Tolentino and Vicente S. E. Veloso, concurring; rollo, pp. 8-19.
[2]
[3]
[4] Rollo, p. 125.
[5]
[6] RTC
Records, Vol. III, pp. 726-728.
[7] Rollo, p. 124.
[8] RTC
Records, Vol. III, pp. 727-728.
[9] Rollo, p. 126.
[10] Penned by
Judge Ansberto P. Paredes, Regional Trial Court,
[11]
[12] RTC
Records, Vol. I, p. 91.
[13] Rollo, pp. 10, 127.
[14]
[15]
[16]
[17]
[18] Rollo, p. 127.
[19]
[20]
[21]
[22] Supra
note 1.
[23]
[24]
[25] Supra
note 2.
[26] Rollo, p. 34.
[27] Huerta
Alba Resort, Inc. v. Court of Appeals, G.R. No. 128567, September 1,
2000, 339 SCRA 534.
[28] Magno v. Viola and Sotto, 61 Phil. 80
(1934).
[29] Sec. 30. Proof required of redemptioner. — A redemptioner must produce to the officer, or person from whom he seeks to redeem, and serve with his notice to the officer a copy of the judgment or final order under which he claims the right to redeem, certified by the clerk of the court wherein the judgment or final order is entered; or, if he redeems upon a mortgage or other lien, a memorandum of the record thereof, certified by the registrar of deeds; or an original or certified copy of any assignment necessary to establish his claim; and an affidavit executed by him or his agent, showing the amount then actually due on the lien.
[30] Regalado,
Florenz D., Remedial Law Compendium, Vol. I, 8th Revised Edition
(2002).
[31] Presidential
Decree No. 1529.
SECTION
51. Conveyance and other dealings by
registered owner. — An owner of registered land may convey, mortgage, lease,
charge or otherwise deal with the same in accordance with existing laws. He may
use such forms of deeds, mortgages, leases or other voluntary instruments as
are sufficient in law. But no deed, mortgage, lease, or other voluntary
instrument, except a will purporting to convey or affect registered land shall
take effect as a conveyance or bind the land, but shall operate only as a
contract between the parties and as evidence of authority to the Register of
Deeds to make registration.
The act of
registration shall be the operative act to convey or affect the land insofar as
third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the
province or city where the land lies.
[32] Presidential
Decree No. 1529.
SECTION
52. Constructive notice upon
registration. — Every conveyance, mortgage, lease, lien, attachment, order,
judgment, instrument or entry affecting registered land shall, if registered,
filed or entered in the office of the Register of Deeds for the province or
city where the land to which it relates lies, be constructive notice to all
persons from the time of such registering, filing or entering.
[33] Garcia v. Court of Appeals, G.R. Nos.
L-48971 & 49011, January 22, 1980, 95 SCRA 380, 389.
[34]
[35] AN ACT TO
REGULATE THE
[36] Consolidated Bank and Trust Corporation
(Solidbank) v. Intermediate Appellate Court, G.R. No. L-73976, May 29,
1987, 150 SCRA 591.
[37] Estanislao, Jr. v. Court of Appeals,
G.R. No. 143687, July 31, 2001, 362 SCRA 229.
[38]
[39]
[40] G.R. No.
L-42282, February 28, 1983, 120 SCRA 869, 877.