Republic of the
Supreme Court
SECOND DIVISION
|
SPOUSES JOSE CHUA and
MARGARITA CHUA, Petitioners, - versus
- THE HONORABLE PEDRO GUTIERREZ, in his capacity as Presiding
Judge of Branch 119, Regional Trial Court, Pasay City, PEDRO A. ABADILLA, in
his capacity as Sheriff IV of Branch 119, Regional Trial Court, Pasay City,
and TAN TEK SING, a.k.a. PETER TAN, Respondents. |
G.R. No. 172316 Present: CARPIO, J., Chairperson, NACHURA, PERALTA, ABAD, and MENDOZA, JJ. Promulgated:
December 8, 2010 |
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D E C I S I O N
PERALTA, J.:
Before this Court is a petition for review on certiorari,[1] under
Rule 45 of the Rules of Court, seeking to set aside the February 7, 2006
Decision[2] and
April 17, 2006 Resolution[3] of the
Court of Appeals (CA), in CA-G.R. SP No. 81382.
The
facts of the case are as follows:
The dispute
involves Townhouse Unit 320, located at Roxas Sea Front Garden, Roxas
Boulevard, Pasay City, which was previously covered by Transfer Certificate of
Title (TCT) No. 127330 in the name of Benito Chua (Benito). Petitioners,
spouses Jose and Margarita Chua, claim that Benito sold the property to them on
P2,800,000.00. Said sale, however, was only registered on
Meanwhile, on
On
On
On
WHEREFORE, judgment is hereby rendered
in favor of plaintiff and against the defendants BENITO NG CHUA, HENRY A. CHENG
and MASTER FOOTWEAR SALES, INC., ordering the said defendants to pay the
plaintiff the sum of P2.6 million, with legal interest thereon from September 3, 1994
until the amount shall have been fully paid; x x x.
x x x x
As
prayed for by movants PHILAM, Jose Chua and Chua Tiu Ning Ning, the Unit 320 of
the Townhouse within Roxas Seaport Garden Compound,
SO ORDERED.[6]
Respondent partially appealed the RTC Decision to the CA in
so far as it excluded Townhouse Unit 320 from attachment. The appeal was
docketed as CA-G.R. CV No. 49959. On
IN LIGHT OF ALL THE FOREGOING, the herein assailed decision is hereby AFFIRMED, but MODIFIED in that:
1. The subject Townhouse Unit 320 covered by TCT No. 134590, which is located within the Roxas Seafront Garden Compound, Aurora III Road, Roxas Boulevard corner Russel Avenue, Pasay City, is hereby made subject to the writ of attachment enforced by the Sheriff of the court a quo on November 18, 1994; x x x.
x x x x
SO
ORDERED.[8]
Aggrieved, petitioners filed a motion for reconsideration,
but the same was denied by the CA in a Resolution[9] dated
Petitioners then appealed the CA Decision to this Court,
where it was docketed as G.R. No. 147339. On
After the denial of petitioners’ appeal by this Court,
respondent then moved for execution against Townhouse Unit 320. The RTC granted
respondent's motion. Notwithstanding, the finality of the CA Decision in
CA-G.R. CV No. 49959, petitioners, however, moved to quash the writ of
execution and notice of levy on the grounds that they are not the judgment
debtors and the property levied upon was already sold to them prior to the
institution of the suit.
On
WHEREFORE, the movant's motion to quash writ of execution and notice of levy and motion to issue temporary restraining order and/or injunction is hereby denied for lack of merit.[11]
Aggrieved,
petitioners filed a Motion for Reconsideration,[12] which
was, however, denied by the RTC in its Order[13] dated
Adamant in excluding Townhouse Unit 320 from execution,
petitioners then filed a petition for certiorari[14] with
the CA assailing the
2006, the CA issued a
Decision denying petitioners’ petition, the dispositive portion of which reads:
WHEREFORE, the petition is DENIED DUE COURSE and DISMISSED.
SO ORDERED.[15]
The CA ruled that a prior registration of a lien creates a
preference and that whatever right over the property petitioners acquired
became subordinate and subject to the duly recorded and annotated attachment
and levy.
Petitioners filed a motion for reconsideration, which was,
however denied by the CA in a Resolution dated
Hence, herein petition, with petitioners raising a lone
issue for this Court's resolution, to wit:
THE HONORABLE COURT OF APPEALS
GRAVELY ERRED IN NOT CONSIDERING THAT THE POWER OF THE COURT IN [THE] EXECUTION
OF JUDGMENT EXTENDS ONLY TO PROPERTIES UNQUESTIONABLY BELONGING TO THE JUDGMENT
DEBTOR.[16]
The petition is not
meritorious.
The main issue in this case is whether or not a registered
writ of attachment is a superior lien over that of an unregistered deed
of sale. The same is not novel.
Petitioners argue that at the time the property was levied,
the same was already in their names. Petitioners
thus posit that, since they are not the judgment debtors, their property should
not be the subject of execution.
Petitioners’
arguments deserve scant consideration.
Since the subject property is covered by a Torrens Title,
the law applicable is Section 51[17] of
Presidential Decree (PD) No. 1529. Said provision provides:
SEC. 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 Registry 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 the city where the land lies.[18]
The preference given to a duly registered levy on attachment or execution over a prior
unregistered sale is well settled in our jurisdiction. This
is because registration is the operative act that binds or
affects the land insofar as third persons are concerned.[19] It is
upon registration that there is notice to the whole world.[20]
Petitioners cannot escape
the fact that when they registered the Deed of Absolute Sale on
In Valdevieso v. Damalerio,[21] this
Court explained that an attachment is a proceeding in rem and that the right of ownership of an individual over a sale
registered after such attachment is limited and subject to the prior registered
lien, to wit:
The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior sale. This is so because an attachment is a proceeding in rem. It is against the particular property, enforceable against the whole world. The attaching creditor acquires a specific lien on the attached property which nothing can subsequently destroy except the very dissolution of the attachment or levy itself. Such a proceeding, in effect, means that the property attached is an indebted thing and a virtual condemnation of it to pay the owner’s debt. The lien continues until the debt is paid, or sale is had under execution issued on the judgment, or until the judgment is satisfied, or the attachment discharged or vacated in some manner provided by law.
Thus, in the registry,
the attachment in favor of respondents appeared in the nature of a real lien
when petitioner had his purchase recorded. The effect of the notation of said
lien was to subject and subordinate the right of petitioner, as purchaser, to
the lien. Petitioner acquired ownership of the land only from the date of the
recording of his title in the register, and the right of ownership which he
inscribed was not absolute but a limited right, subject to a prior registered
lien of respondents, a right which is preferred and superior to that of
petitioner.[22]
It is doctrinal that a levy on attachment, duly registered,
has preference over a prior unregistered sale and, even if the prior
unregistered sale is subsequently registered before the sale on execution but
after the levy is made, the validity of the execution sale should be upheld
because it retroacts to the date of levy. The priority enjoyed by the levy on
attachment extends, with full force and effect, to the buyer at the auction
sale conducted by virtue of such levy.[23]
The sale between
petitioners and Benito was undoubtedly a valid transaction between them.
However, in view of the prior levy on attachment on the same property,
petitioners took the property subject to the attachment. Petitioners, in buying
registered land, stood exactly in the shoes of their vendor, Benito, and their
title ipso facto became subject to
the incidents or results of the pending litigation[24] between
Benito and respondent.
Petitioners may have been
in good faith when they bought the property from Benito. So also, petitioners
may not have known about the case filed by respondent against Benito and the
resulting grant of a writ of attachment over Townhouse Unit 320. Be that as it
may, this Court is concerned not with actual or personal knowledge, but constructive
notice through registration in the Register of Deeds. Otherwise stated, what this Court should
follow is the annotation (or lack thereof) on the original title on file with
the Register of Deeds, not on the duplicate title in the hands of private
parties.[25]
Furthermore, 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 on notice, it is presumed that the
purchaser has examined every instrument on record affecting the title. Such
presumption is irrefutable and cannot be overcome by any claim of innocence or
good faith.[26]
There is, however, a known exception to the above-mentioned
rules, that is, when a party has knowledge of a prior
existing interest which is unregistered at that time he acquired a right to the
same land, his knowledge of that prior unregistered interest
has the effect of registration as to him.[27]
Knowledge of an unregistered sale is equivalent to registration.[28] Thus, if it can be proven that respondent,
at the time of the institution of the proceedings before the RTC, had knowledge
of the sale between petitioners and Benito, the same would be considered equivalent
to registration as to him. As far as petitioners are concerned, however, other
than their bare allegation that respondent was aware of the sale of the subject
property to them by Benito, the records of the case show no evidentiary proof
that respondent had knowledge of such transaction prior to the institution of
the proceedings before the RTC.
This Court is mindful of one of the arguments raised by
petitioners in the proceedings below which was that they derived their right
over the property from Philippine American Life Insurance (PHILAM). Petitioners argue that prior to the annotation
of the attachment lien in favor of respondent, the subject property was
already mortgaged to PHILAM. Thus, petitioners theorize that the mortgage lien
in favor of PHILAM is superior to the attachment lien in favor of
respondent.[29]
The same is without merit.
Petitioners claim in their narration of facts that after the
execution of the Deed of Absolute Sale on
In Biñan Steel Corporation v. Court of Appeals,[32] this
Court ruled that the approval of the mortgagee is essential for the perfection
of a sale with assumption of mortgage, to wit:
The Garcias claim they acquired the subject property by means of a
deed of sale with assumption of mortgage dated
In sales with assumption of mortgage, the assumption of mortgage is a condition precedent to the seller’s consent and, therefore, without approval of the mortgagee, the sale is not perfected.[33]
Applied to the case at
bar, it is undisputed that the release of the mortgage only occurred on
Lastly, this Court notes of the finality of the CA Decision
in CA-G.R. CV No. 49959, granting
respondent's partial appeal to have Townhouse Unit 320 subject to attachment.
The finality of said decision is a necessary consequence of this Court's denial
of petitioners' appeal in G.R. No. 147339. This Court may have disposed of
petitioners' appeal via a minute resolution, but it is settled that when a minute resolution denies or dismisses a
petition for failure to comply with formal and substantive requirements, the
challenged decision, together with its findings of fact and
legal conclusions, are deemed sustained.[34] Petitioners
once came to this Court asking for the
exclusion of the subject
property from attachment, it would certainly be iniquitous to allow them to
raise the same issue all over again a second time.
Withal, while this Court sympathizes with petitioners’
plight, law and jurisprudence support respondent's case. It bears to stress
that a levy on attachment, duly registered, has preference over a prior
unregistered sale and, even if the prior unregistered sale is subsequently
registered before the sale on execution but after the levy is made, the
validity of the execution sale should be upheld because it retroacts to the
date of levy. At any rate, petitioners, however, are not without recourse, as
they may seek reimbursement from Benito.
WHEREFORE, premises considered, the petition is DENIED. The February 7, 2006 Decision and
SO ORDERED.
DIOSDADO M. PERALTA
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
ANTONIO EDUARDO B. NACHURA ROBERTO
A. ABAD
Associate Justice Associate Justice
JOSE CATRAL
Associate Justice
ATTESTATION
I attest 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
Associate Justice
Second
Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, 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.
RENATO
C. CORONA
Chief
Justice
[1] Rollo, pp. 14-19.
[2] Penned by Associate Justice Roberto A. Barrios, with Associate Justices Mario L. Guariña III and Santiago Javier Ranada concurring; id. at 94-100.
[3]
[4] Rollo, pp. 63-64.
[5]
[6]
[7] Penned by Associate Justice Candido V. Rivera, with Associate Justices Quirino D. Abad Santos, Jr. and Bernardo Ll. Salas, concurring; id. at 77-85.
[8]
[9] Rollo, p. 87.
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17] The Property Registration Decree.
[18] (Emphasis supplied).
[19] Egao v. Court of Appeals, G.R.
No. 79787,
[20] Calalang
v. Register of Deeds, G.R.
No. 76265,
[21] 492 Phil. 51 (2005).
[22]
[23] First Integrated Bonding & Insurance Co., Inc. v. Court of Appeals, 329 Phil. 950, 970-971 (1996).
[24] Voluntad v. Spouses Dizon, 372 Phil. 82, 92 (1999).
[25] See Biñan Steel Corporation v. Court of Appeals,
439 Phil. 688, 701-702 (2002).
[26]
[27] Ruiz, Sr. v. Court of Appeals, 414 Phil. 311, 323 (2001).
[28] Winkleman v. Veluz, 43 Phil. 604, 608 (1922).
[29] Rollo, p. 34.
[30]
[31]
[32] Supra note 25.
[33]
[34] Complaint of Mr. Aurelio Indencia
Arrienda against SC Justices Puno, Kapunan, Pardo, Ynares-Santiago, et al., A.M. No. 03-11-30-SC, June 9, 2005, 460
SCRA 1, 14, citing Tan v. Nitafan,
231 SCRA 129 (1994).