Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 192813 January 18, 2012
VASHDEO GAGOOMAL, Petitioner,
vs.
SPOUSES RAMON AND NATIVIDAD VILLACORTA, Respondents.
D E C I S I O N
PERLAS-BERNABE, J.:
Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the Decision1 of the Court of Appeals ("CA") dated March 8, 2010 in CA-G.R. SP No. 109004, as well as the Resolution2 dated July 7, 2010 denying the motion for reconsideration thereof. The dispositive portion of the assailed Decision reads:
"WHEREFORE, premises considered, the petition is GRANTED. The assailed Orders dated August 5, 2008 and March 20, 2009 issued by Hon. Danilo S. Cruz of the Regional Trial Court, Branch 152, Pasig City are hereby REVERSED and SET ASIDE and another one entered, the Motion to Quash Writ of Possession filed by spouses Ramon and Natividad Villacorta in Civil Case No. 67381 is GRANTED. ACCORDINGLY, the Writ of Possession issued in Civil Case No. 67381 is ordered QUASHED.
SO ORDERED."
The Facts
Albert Zeñarosa ("Zeñarosa") was the registered owner of a parcel of land located in Ayala Alabang Village, Alabang, Muntinlupa City, covered by Transfer Certificate of Title (TCT) No. 170213. He mortgaged the same in favor of BPI Family Savings Bank ("BPI") which was duly annotated on the title on June 7, 1990.
Subsequently, Zeñarosa obtained a loan in the amount of $300,000.00 from RAM Holdings Corporation ("RAM"), secured by a second mortgage3 over the property and a Promissory Note4 . The parties likewise executed a Memorandum of Agreement5 ("MOA") dated March 2, 1995 whereby Zeñarosa, through an Irrevocable Special Power of Attorney, authorized RAM, among others, to sell the subject property in case of his failure to pay.
Zeñarosa failed to settle his obligations prompting RAM to file a Complaint6 for collection of sum of money with damages against him and BPI before the RTC of Pasig City, Branch 152, docketed as Civil Case No. 67381. RAM also caused the annotation of a notice of lis pendens on TCT No. 170213 on June 11, 1999.
Pending Civil Case No. 67381, Zeñarosa failed to pay his obligation to BPI resulting in the foreclosure of the subject property. The certificate of sale was annotated on TCT No. 170213 on March 24, 2000.
Meanwhile, RAM sold its rights and interests over the subject property to New Summit International, Inc., represented by its President, Vashdeo Gagoomal, herein petitioner. The assignment was annotated on TCT No. 170213 on October 16, 2000.
On August 29, 2002, one Luis P. Lorenzo, Jr. ("Lorenzo") filed a complaint for recovery of sum of money with application for a writ of preliminary attachment against Zeñarosa before the RTC of Makati City, Branch 64, docketed as Civil Case No. 02-1038. A writ of preliminary attachment was issued on September 20, 2002, pursuant to which the Branch Sheriff of Makati City attached the subject property. The lien was annotated on TCT No. 170213 on September 30, 2002.
On the other hand, Zeñarosa redeemed the foreclosed property from BPI on March 23, 2003.1âwphi1 Thereafter, he sold the property to a certain Patricia A. Tan ("Tan") in whose favor TCT No. 102067 was issued on April 4, 2003. The annotations of the notice of lis pendens in Civil Case No. 67381, as well as the notice of levy on attachment in Civil Case No. 02-1038, were carried over to her title.
In the meantime, in Civil Case No. 02-1038, Lorenzo obtained a favorable decision which had become final and executory. A notice of levy and execution on the subject attached property was issued and annotated on the title. On January 15, 2004, the property was sold at public auction to
Lorenzo for ₱9,034,166.00 and the Certificate of Sale was annotated on TCT No. 10206 on January 30, 2004, giving Zeñarosa until January 29, 2005 within which to redeem the property.
Subsequently, or on April 30, 2004, the RTC rendered judgment in favor of RAM in Civil Case No. 67381 for sum of money.8 Pending Zeñarosa's appeal to the CA, docketed as CA-G.R. CV No. 84523, RAM filed a motion for execution pending appeal, which was granted.9 On December 14, 2004, the property subject of notice of lis pendens was sold at public auction to petitioner, the successor-in-interest of RAM, for ₱19,793,500.00.10 The certificate of sale was annotated on Tan's TCT No. 10206 on December 17, 2004.
On January 29, 2005, in view of Zeñarosa's failure to redeem the property from Lorenzo, the title over the subject property was consolidated in the latter's name. A writ of possession was issued in favor of Lorenzo, who subsequently sold the property to Natividad Villacorta, one of the respondents herein, for ₱6,000,000.00. Immediately after purchasing the property, respondents took possession thereof.
Meanwhile, Zeñarosa's appeal in CA-G.R. CV No. 84523 was dismissed, and the decision in favor of RAM became final and executory on October 7, 2005. With a sale annotated in its favor, and without Zeñarosa exercising his right of redemption, a final Deed of Sale was issued in favor of petitioner, the successor-in-interest of RAM, on December 14, 2005. By virtue of a writ of possession11 issued by the RTC on February 1, 2007 in Civil Case No. 67381, petitioner divested the respondents of possession of the disputed property.
The foregoing developments prompted the respondents to file a Motion to Quash Writ of Possession12 in Civil Case No. 67381 before the RTC of Pasig City, Branch 152, on March 20, 2007. They also filed a case for quieting of title and recovery of possession before the RTC of Muntinlupa City, Branch 276, docketed as Civil Case No. 08-011.
On August 5, 2008, the RTC of Pasig City, Branch 152, issued an Order13 in Civil Case No. 67381 denying respondents' Motion to Quash Writ of Possession. It also directed the Registry of Deeds of Muntinlupa City to issue a new transfer certificate of title in the name of petitioner Vashdeo Gagoomal. The motion for reconsideration14 thereof was similarly denied.15
Aggrieved, the respondents filed a petition for certiorari with prayer for injunctive relief16 before the CA, ascribing grave abuse of discretion on the part of the RTC in directing the "transfer of title over the subject property" to petitioner; in denying their motion to quash the writ of possession; and in refusing to restore to them the possession of the subject property.
In its assailed Decision, the CA granted respondents' petition, ratiocinating as follows:
"Records show that spouses Villacorta derived their rights in the subject property from their predecessor-in-interest, Lorenzo, who purchased the same in a sale on execution on January 15, 2004. The title to the subject property was consolidated in favor of Lorenzo on January 29, 2005 and said annotation was reflected on the certificate of title. Gagoomal, on his part, maintains that he has a superior right over Lorenzo because his predecessor-in-interest, Ram, was able to cause the annotation of lis pendens ahead of Lorenzo's writ of attachment.
The fact that the notice of lis pendens regarding to [sic] Civil Case No. 67381 was annotated ahead of the attachment of the subject property in Civil Case No. 02-1038 is of no moment. Hence, We agree with spouses Villacorta that Gagoomal did not acquire any title to the property since what he purchased during the public auction on October 14, 2004 was only the remaining right of redemption of Zeñarosa.
x x x x x x x x x
In the present case, the annotation of Ram of the lis pendens was improper because the case filed by Ram against Zeñarosa was purely a personal action. Civil Case No. 67381, entitled Ram Holdings Corporation vs. Albert Zeñarosa, et. al., is for Collection of Sum of Money with Damages. It has been held that the doctrine of lis pendens has no application to a proceeding in which the only object sought is the recovery of a money judgment, though the title or right of possession to property may be affected. It is essential that the property be directly affected, as where the relief sought in the action or suit includes the recovery of possession, or the enforcement of a lien, or an adjudication between conflicting claims of title, possession, or right of possession to specific property, or requiring its transfer or sale [citation omitted]"17
Essentially, the CA concluded that the RTC committed grave abuse of discretion when it ordered the Register of Deeds to transfer to petitioner the title and possession of the subject property notwithstanding unrebutted evidence that Zeñarosa, the judgment debtor in Civil Case No. 67381, was no longer its owner and had only the remaining right of redemption at the time the property was sold at public auction to petitioner on December 14, 2004.
Corollary thereto, the CA held that the power of the RTC to execute its judgment extends only to property belonging to the judgment debtor in Civil Case No. 67381, Zeñarosa in this case, and did not include the respondents. The CA likewise refused to give merit to petitioner's contentions that the respondents can no longer ask for the modification or abrogation of the decision of the RTC which had already attained finality, and that since the writ of possession had already been implemented, then it can no longer be quashed.
The Issues
Hence, this petition advancing the following issues for Our resolution, to wit:
"I.
RESPONDENTS DO NOT HAVE A RIGHTFUL CLAIM TO THE PROPERTY.
II.
RESPONDENTS HAD NO BASIS TO ASK FOR THE QUASHAL OF THE WRIT OF POSSESSION.
III.
THE PASIG REGIONAL TRIAL COURT CAN RULE ON TRANSFER OF TITLE.
IV.
PETITIONER'S RIGHTS ARE SUPERIOR TO THAT OF RESPONDENT'S.
V.
THE HONORABLE COURT OF APPEALS' DECISION OVERSTEPPED ISSUES."18
The Ruling of the Court
The petition is bereft of merit.
A writ of possession is an order by which the sheriff is commanded to place a person in possession of a real or personal property. We clarified in the case of Motos v. Real Bank (A Thrift Bank), Inc.19 that a writ of possession may be issued under any of the following instances: (a) land registration proceedings under Section 17 of Act No. 49620 ; (b) judicial foreclosure, provided the debtor is in possession of the mortgaged realty and no third person, not a party to the foreclosure suit, had intervened; and (c) extrajudicial foreclosure of a real estate mortgage under Section 7 of Act No. 3135 as amended by Act No. 411821 .
Corollary thereto, Section 33, Rule 39 of the Rules of Court provides:
"SEC. 33. Deed and possession to be given at expiration of redemption period; by whom executed or given. - If no redemption be made within one (1) year from the date of the registration of the certificate of sale, the purchaser is entitled to a conveyance and possession of the property; or, if so redeemed whenever sixty (60) days have elapsed and no other redemption has been made, and notice thereof given, and the time for redemption has expired, the last redemptioner is entitled to the conveyance and possession; but in all cases the judgment obligor shall have the entire period of one (1) year from the date of the registration of the sale to redeem the property. The deed shall be executed by the officer making the sale or by his successor in office, and in the latter case shall have the same validity as though the officer making the sale had continued in office and executed it.
Upon the expiration of the right of redemption, the purchaser or redemptioner shall be substituted to and acquire all the rights, title, interest and claim of the judgment obligor to the property as of the time of the levy. The possession of the property shall be given to the purchaser or last redemptioner by the same officer unless a third party is actually holding the property adversely to the judgment obligor."
In this case, the writ of possession was issued and executed in favor of petitioner under the foregoing provision. However, a punctilious review of the records will show that its grant and enforcement against the subject property, over which the respondents – third parties to Civil Case No. 67381 – claim an adverse interest, are devoid of legal basis.
It is a basic principle of law that money judgments are enforceable only against property incontrovertibly belonging to the judgment debtor, and if property belonging to any third person is mistakenly levied upon to answer for another man’s indebtedness, such person has all the right to challenge the levy through any of the remedies provided for under the Rules of Court. Section 1622 , Rule 39 thereof specifically provides that a third person may avail himself of the remedies of either terceria, to determine whether the sheriff has rightly or wrongly taken hold of the property not belonging to the judgment debtor or obligor, or an independent "separate action" to vindicate their claim of ownership and/or possession over the foreclosed property.23 However, "a person other than the judgment debtor who claims ownership or right over the levied properties is not precluded from taking other legal remedies to prosecute his claim".24
In the present case, respondents filed a motion to quash the writ of possession substantiating their preferential rights over the subject property which they had purchased from Lorenzo. As earlier stated, Lorenzo, in Civil Case No. 02-1038, caused the annotation of a writ of preliminary attachment on September 30, 2002 and thereafter, a notice of levy and execution, finally acquiring the property in a public auction sale on January 30, 2004. Similarly, respondents have instituted a separate civil action for quieting of title and recovery of property before the RTC of Muntinlupa City, Branch 276, docketed as Civil Case No. 08-011.
Petitioner's argument that he acquired a superior right over the subject property by virtue of the earlier annotation of a notice of lis pendens on June 11, 1999 by his predecessor-in-interest RAM on the same title cannot be given credence.
Section 14, Rule 13 of the Rules of Court provides:
"Sec. 14. Notice of lis pendens. - In an action affecting the title or the right of possession of real property, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in the office of the registry of deeds of the province in which the property is situated a notice of the pendency of the action. Said notice shall contain the names of the parties and the object of the action or defense, and a description of the property in that province affected thereby. Only from the time of filing such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against the parties designated by their real names.
The notice of lis pendens hereinabove mentioned may be cancelled only upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded." [emphasis ours]
The filing of a notice of lis pendens has a dual effect: (1) to keep the property subject matter of the litigation within the power of the court until the entry of the final judgment in order to prevent the defeat of the final judgment by successive alienations; and (2) to bind a purchaser, bona fide or otherwise, of the property subject of the litigation to the judgment that the court will subsequently promulgate.25
Relative thereto, a notice of lis pendens is proper in the following actions and their concomitant proceedings:
"(a) an action to recover possession of real estate;
(b) an action to quiet title thereto;
(c) an action to remove clouds thereon;
(d) an action for partition; and
(e) any other proceedings of any kind in Court directly affecting the title to the land or the use or occupation thereof or the buildings thereon."26
Thus, a notice of lis pendens is only valid and effective when it affects title over or right of possession of a real property.
In this case, it cannot be denied that Civil Case No. 67381, which RAM, predecessor-in-interest of petitioner, instituted against Zeñarosa was for collection of sum of money with damages – a purely personal action. Hence, the notice of lis pendens in favor of RAM annotated on the cancelled TCT No. 170213 and carried over to Tan's TCT No. 10206 conferred upon it no rights over the subject property and, as a necessary consequence, upon petitioner, its successor-in-interest.
To be sure, in Atlantic Erectors, Inc. v. Herbal Cove Realty Corporation27 , We have previously explained that the doctrine of lis pendens has no application to a proceeding in which the only object sought is the recovery of a money judgment, though the title or right of possession to property be incidentally affected. It is essential that the property be directly affected such as when the relief sought in the action or suit includes the recovery of possession, or the enforcement of a lien, or an adjudication between conflicting claims of title, possession, or the right of possession to specific property, or requiring its transfer or sale. Even if a party initially avails of a notice of lis pendens upon the filing of a case in court, such notice is rendered nugatory if the case turns out to be a purely personal action. In such event, the notice of lis pendens becomes functus officio.
Accordingly, petitioner has not created a superior right over the subject property as against respondents by reason of the prior annotation in 1999 of the notice of lis pendens by his predecessor RAM. Hence, the subsequent levy on execution on October 14, 2004 arising from the final money judgment in favor of petitioner cannot prevail over the earlier annotated attachment made by Lorenzo on September 30, 2002 and its subsequent notice of levy on execution and sale of the property to respondents on January 30, 2004, who then took possession. On October 14, 2004, what petitioner merely levied upon on execution was the remaining redemption rights of Zeñarosa until January 29, 2005 which period expired without any redemption having been made. Consequently, the writ of possession issued as a result of a wrongful execution was not proper and cannot be enforced against the respondents who are third parties in possession of and claiming an adverse interest on the property in controversy.
It bears to stress that the court issuing the writ of execution may enforce its authority only over properties or rights of the judgment debtor, and the sheriff acts properly only when he subjects to execution property undeniably belonging to the judgment debtor. Should the sheriff levy upon the assets of a third person in which the judgment debtor has not even the remotest interest, then he is acting beyond the limits of his authority. A judgment can only be executed or issued against a party to the action, not against one who has not yet had his day in court.28
Neither can We affirm petitioner's contention that in seeking the quashal of the writ of possession, the respondents were, in effect, asking the RTC to abrogate its decision, which had already attained finality. As correctly observed29 by the CA, the quashal of a writ of possession does not have the effect of modifying or abrogating the judgment of the RTC. "The settled rule is that a judgment which has acquired finality becomes immutable and unalterable, and hence may no longer be modified in any respect except only to correct clerical errors or mistakes – all the issues between the parties being deemed resolved and laid to rest."30 To reiterate, however, the court's power with regard to execution of judgments extends only to properties irrefutably belonging to the judgment debtor, which does not obtain in this case.
Therefore, petitioner's contention that the writ of possession had already been enforced and can no longer be quashed deserves scant consideration. Unquestionably, the RTC has a general supervisory control over the entire execution process, and such authority carries with it the right to determine every question which may be invariably involved in the execution.31 Respondents invoked this supervisory power when they sought the quashal of the writ of possession.
Finally, considering the circumstances of this case, We cannot uphold the RTC's directive to transfer the title over the subject property from respondents to petitioner, for utter lack of legal basis. To emphasize, apart from the motion to quash the writ of possession, respondents have instituted a case for quieting of title and recovery of possession before the RTC of Muntinlupa City, docketed as Civil Case No. 08-011.
In sum, We find that the RTC erred in implementing the writ of execution against the subject property which does not irrefutably belong to Zeñarosa, the judgment debtor in Civil Case No. 67381. Hence, the writ of possession issued relative thereto was likewise improper and must necessarily be quashed, as correctly ruled by the CA. Accordingly, since the respondents were unduly deprived of possession of the subject property, they must be immediately restored into its possession, without prejudice to the result of Civil Case No. 08-011.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice
WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice |
ROBERTO A. ABAD
Associate Justice |
JOSE C. MENDOZA
Associate Justice
A T T E S T A T I O N
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.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson, Third Division
C E R T I F I C A T I O N
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
Footnotes
1 Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices Mariflor P. Punzalan Castillo and Elihu A. Ybañez, concurring; rollo, pp. 50-63.
2 Id., pp. 66-67.
3 Id., Annex "C", pp. 69-75.
4 Id., Annex "D", pp. 77-78.
5 Id., Annex "E", pp. 80-83.
6 Id., Annex "F", pp. 85-94.
7 Id., Annex "G", pp. 127-131.
8 Id., Annex "H", Decision dated April 30, 2004, pp. 133-138.
9 Id., Annex "I", pp. 140-141.
10 Id., Annex "J", pp. 143-144.
11 Id., Annex "N", pp. 159-160.
12 Id., Annex "O", pp. 162-172.
13 Id., Annex "P", pp. 178-191.
14 Id., Annex "Q", pp. 193-201.
15 Id., Annex "R", p. 205.
16 Id., Annex "S", pp. 207-238.
17 Supra note 1, at p. 57, paragraphs 1-4.
18 Rollo, Petition, pp. 20-21.
19 G.R. No. 171386, July 17, 2009, 593 SCRA 216, 224.
20 The Land Registration Act, approved on November 6, 1902.
21 Fernandez v. Espinoza, G.R. No. 156421, April 14, 2008, 551 SCRA 136, 144-145.
22 "Sec. 16. Proceedings where property claimed by third person.
If the property levied on is claimed by any person other than the judgment obligor or his agent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves the same upon the officer making the levy and a copy thereof upon the judgment obligee, the officer shall not be bound to keep the property, unless such judgment obligee, on demand of the officer, files a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied on. In case of disagreement as to such value, the same shall be determined by the court issuing the writ of execution. No claim for damages for the taking or keeping of the property may be enforced against the bond unless the action therefor is filed within one hundred twenty (120) days from the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the property, to any third-party claimant if such bond is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separate action, or prevent the judgment obligee from claiming damages in the same or a separate action against a third-party claimant who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or any officer duly representing it, the filing of such bond shall not be required, and in case the sheriff or levying officer is sued for damages as a result of the levy, he shall be represented by the Solicitor General and if held liable therefor, the actual damages adjudged by the court shall be paid by the National Treasurer out of such funds as may be appropriated for the purpose."
23 Gomez v. Sta. Ines, G.R. No. 132537, October 14, 2005, 473 SCRA 25, 38.
24 Yupangco Cotton Mills, Inc. v. Court of Appeals, et. al., G.R. No. 126322, January 16, 2002, 373 SCRA 451, 459.
25 Spouses Conrado and Ma. Corona Romero v. Court of Appeals, G.R. No. 142406 May 16, 2005, 458 SCRA 483, 493.
26 Id., citing Magdalena Homeowners Association, Inc. v. Court of Appeals, G.R. No. 60323, April 17, 1990, 184 SCRA 325, 330.
27 G.R. No. 148568, March 20, 2003, 399 SCRA 409, 419-420.
28 Naguit v. Court of Appeals, G.R. No. 137675, December 5, 2000, 347 SCRA 60, 67.
29 Supra note 1, at p. 60, paragraph 3.
30 Johnson & Johnson (Phils.), Inc. v. Court of Appeals, G.R. No. 102692, September 23, 1996, 262 SCRA 298, 309.
31 Kukan International Corporation v. Hon. Amor Reyes, G.R. No. 182729, September 29, 2010, 631 SCRA 596, 608, citing Carpio v. Doroja, G.R. No. 84516, December 5, 1989, 180 SCRA 1,7.
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