Manila
FIRST DIVISION
[ G.R. No. 244681. March 29, 2023 ]
VICENTE C. GO, PETITIONER, VS. COURT OF APPEALS, SHERIFF ANDREW B. ALVIAR, THE REGISTER OF DEEDS OF QUEZON CITY AND SPOUSES RAFAEL M. COLET AND ROSARIO A.Z. COLET, RESPONDENT.
D E C I S I O N
ZALAMEDA, J.:
Before this Court is a Petition for Certiorari (Petition)1 assailing the Resolutions dated 28 February 20182 and 17 December 20183 of the Court of Appeals (CA), in CA-G.R. SP No. 153185, which dismissed the Petition for Annulment of Judgment filed by petitioner Vicente C. Go.
Antecedents
Petitioner filed a Complaint4 against Setcom Inc. (Setcom), Francisco P. Bernardo, Damaso Mauricio, Arlene H. Realce, Ma. Teresa G. Bernardo, Dominador B. Rodriguez and Eduardo C. Govieneche (collectively, defendants) for recovery of sum of money, breach of contract and damages (sum of money case), docketed as Civil Case No. 06-115453 and raffled to Branch 27, Regional Trial Court of the City of Manila (RTC-Manila). Petitioner essentially alleged therein that he invested funds on a contract awarded by the Bangko Sentral ng Pilipinas to Setcom for the supply, delivery, installation, and commissioning of Ultra High Frequency/Very High Frequency (UHF/VHF) Trunking Radio Equipment, including accessories, security kit, licenses, and permits. Petitioner allegedly agreed to obtain a supplier of the needed equipment, loan funds and later, divide the net profits with the defendants. However, defendants allegedly reneged, and obtained another financier.5
On 15 December 2008, the RTC-Manila rendered a Decision6 in petitioner's favor, the dispositive portion of which, states:
WHEREFORE, IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered in favor of the plaintiff and against defendants SETCOM Inc., Francisco P. Bernardo, Damaso Mauricio, Arlene H. Realce, Ma. Teresa G. Bernardo, Dominador B. Rodriguez and Eduardo C. Govieneche, to wit:
(1) Ordering all defendants jointly and severally, to return to plaintiff the amount of One Million Seven Hundred Thousand (P1,700,000.00) Pesos with interest at 12% per annum from April 6, 2006 until fully paid;
(2) Ordering all defendants jointly and severally to pay plaintiff the amount of P100,000.00 as and by way of moral damages;
(3) Ordering all defendants, jointly and severally, to pay plaintiff the amount of P100,000.00 as and by way of attorney's fees.
(4) To pay the costs of the suit.
SO ORDERED.7
After the said Decision became final and executory, the RTC-Manila issued a writ of execution.8 Pursuant to the writ, an execution sale was subsequently conducted on a property located at Dumagat Street, Mira Nila homes, Barangay Pasong Tamo, Tandang Sora, Quezon City, covered by Transfer Certificate of Title No. N-221568 (subject property) and registered under the name of Spouses Francisco and Ma. Teresa Bernardo (Spouses Bernardo) on 15 September 2011. The subject property was sold to petitioner as the highest bidder for the sum of P4 million.9
The Notice of Levy on Execution and Certificate of Sale were duly registered on the 29 April 2011 and 24 November 2011, respectively, on the title of the subject property.10 Petitioner, however, failed to consolidate his title and have a new certificate of title issued under his name.11
On 28 July 2018, petitioner requested the assistance of Sheriff Leober Umaño (Sheriff Umaño) to consolidate his title. He then discovered that Spouses Rafael and Rosario Colet (Spouses Colet) filed a complaint dated 07 March 2013 against him for cancellation of encumbrance, quieting of title, and damages with application for Temporary Restraining Order (TRO) and writ of preliminary injunction (quieting of title case), docketed as Civil Case No. Q-13-72861, before the RTC of Quezon City (RTC-QC) involving the subject property.12 Spouses Colet claimed that they bought the subject property from Spouses Bernardo by virtue of a Deed of Absolute Sale on 09 May 2005. They claimed that simultaneous to the execution of the deed of sale, Spouses Bernardo gave them the owner's duplicate copy of the title, and that they immediately took physical possession of the subject property.13
Spouses Colet did not process and cause the issuance of a new title under their name until 2012, at which point they discovered encumbrances on the subject property reflecting the levy and auction sale in petitioner's favor.14
Since petitioner failed to file an answer after the service of summons, the QC RTC declared him in default, and proceeded to try the case ex-parte.15
Ruling of the RTC
On 29 April 2015, the RTC-QC rendered a Decision16 in the quieting of title case in favor of Spouses Colet, the dispositive portion of which states:
WHEREFORE, premises considered, judgment is rendered ordering the cancellation of the following encumbrances:
"Entry No. 2011014107
Notice of Levy on Execution: Issued by Sheriff Leober P. Umaño, affecting the rights, interest, shares and participation of the registered owner and by virtue of a writ of execution issued by RTC Branch 27, Manila, in Civil Case No. 06-115453, entitled "Vicente C. Go, plaintiff versus Setcom Inc., Francisco P. Bernardo, Damasco Mauricio, Arlene H. Realce, Ma. Tersa G. Bernardo, Dominador Rodriguez and Eduardo C. Govieneche, defendants", dated Feb. 21, 2011"
"Entry No. 2011035598
Certificate of Sale: Pursuant to terms and conditions of the Notice of Levy on Execution herein under Entry No. 2011014107, the Sheriff of Manila, Leober P. Umaño, RTC Branch 27, Manila sold the property in favor of Vicente C. Go, as the highest bidder for the sum of P4,000,000.00. The period of redemption will expire One (1) year from the date of registration of the Certificate of Sale dated November 8, 2011.
It is made of record that the capital gains and Doc. Stamp Tax subject to the above annotated Cert. of Sale have not yet been paid pursuant to BIR Revenue Regulations no. 4-99 dated March 9, 1999.1aшphi1"
Annotated on Transfer of Certificate of Title No. N-221568.
SO ORDERED.17
Pursuant to the said Decision, the encumbrances in petitioner's favor were cancelled. Petitioner filed a Motion for Reconsideration and to Admit Attached Answer with Compulsory Counterclaim18 dated 22 August 2017 assailing the RTC-QC's Decision, which the latter denied in an Order19 dated 25 September 2017.
Petitioner filed a Petition for Annulment of Judgment20 with the Court of Appeals, claiming that the RTC-QC did not have any jurisdiction to interfere with the execution of the decision of the RTC-Manila in the sum of money case, since the RTC-QC is a co-equal and coordinate court. He likewise claimed that the encumbrances in his favor enjoy preference over the unregistered sale of the subject property to Spouses Colet. Petitioner further claimed that he was denied due process since he was not personally served summons. He argued that the RTC-QC erred in ordering the service of summons by publication on the supposed reason that personal service of summons cannot be made.21
Ruling of the CA
On 28 February 2018, the CA dismissed the petition for being procedurally and substantially defective.22
The CA noted that petitioner failed to attach supporting documents required under Section 4, Rule 47 of the Rules of Court. The appellate court also found unsubstantiated petitioner's claim that there was improper service of summons. It noted that petitioner failed to present evidence of the summons and court orders granting service by publication. Further, the appellate court noted that there was a discrepancy in petitioner's addresses. In his Answer, he alleged that he is "a resident of No. 25 Natividad Almeda-Lopez Street (formerly Concepcion Street), Barangay 659-A, Zone 71, Ermita District, Manila and not of Gotesco Tower A, 1129 Judge Natividad Lopez Street, Ermita Manila." However, in the petition for annulment, it was stated that petitioner resides at 1129 Judge Natividad Lopez Street, Ermita Manila."23
The CA also denied petitioner's motion for reconsideration.24
Hence this Petition. According to petitioner, the CA erred when it failed to rule that the RTC-QC did not acquire jurisdiction over his person for improper service of summons. He also contends that his interest on the subject property enjoys preference over the Spouses Colet's prior unregistered sale.25
Issue
This Court is tasked to determine whether the CA erred in dismissing the Petition for Annulment.
Ruling of the Court
Summons is a procedural tool. It is a writ by which the defendant is notified that an action was brought against him or her.26 As an implement of due process, proper service of summons to a party is essential to render a judgment valid.27 Violation of due process is a jurisdictional defect. Hence, proper service of summons is imperative.28
Jurisdiction over the parties is required regardless of the type of action — whether the action is in personam, in rem, or quasi in rem. In actions quasi in rem, such as the case at bar, jurisdiction over the person of the defendant is not a prerequisite to confer jurisdiction on the court provided that the court acquires jurisdiction over the res. Nonetheless, summons must be served upon the defendant in order to satisfy the due process requirements.29
Personal service of summons is the preferred mode of service of summons. Generally, summons must be served personally upon the defendant or respondent wherever he or she may be found. If the defendant or respondent refuses to receive the summons, it shall be tendered to him or her.30
The Rules of Court provide for alternative methods for service of summons. However, Our procedural rules also impose various requirements before resort to these alternative methods can validly be made. Summons may be served by substituted service only for justifiable causes and if the defendant or respondent cannot be served within reasonable time. Substituted service is effected "(a) by leaving copies of the summons at the defendant's residence with some person of suitable age and discretion then residing therein, or (b) by leaving the copies at defendant's office or regular place of business with some competent person in charge thereof."
Service of summons by publication in a newspaper of general circulation is allowed when the defendant or respondent is designated as an unknown owner or if his or her whereabouts are "unknown and cannot be ascertained by diligent inquiry." It may only be effected after unsuccessful attempts to serve the summons personally, and after diligent inquiry as to the defendant's or respondent's whereabouts.31
Lack or defective service of summons may likewise be cured by waiver, as when the defendant voluntary appears and implicitly recognizes the court's jurisdiction over his or her person by demanding affirmative relief.32
Before summons by publication may be allowed, the following requirements must be satisfied: 1) there must be a written motion for leave of court to effect service of summons by publication, supported by affidavit of the plaintiff or some person on his behalf, setting forth the grounds for the application; and 2) there must be diligent efforts exerted by the sheriff in ascertaining the whereabouts of the defendant.33
In Titan Dragon Properties Corp. v. Veloso-Galenzoga,34 this Court explained that the diligence requirement under Section 14, Rule 14 of the Rules means that there must be prior resort to personal service under Section 7 and substituted service under Section 8 of the same Rule, and proof that these modes were ineffective before summons by publication may be allowed. Thus, in line with such requirement, this Court clarified that the sheriff must be resourceful, persevering, canny, and diligent in serving the process on the defendant. There must be several attempts by the sheriff to personally serve the summons within a reasonable period, which means at least three tries, preferably on at least two different dates. There must likewise be an explanation why such efforts were unsuccessful. It is only then that impossibility of service can be confirmed or accepted.35
There is valid service of summons by publication
In the instant case, it is plain that the sheriff served the summons at least three times on different dates at the addresses stated in 1) petitioner's own complaint for sum of money, and 2) the Certificate of Sale. First, the Sheriff's Return dated 13 March 2013 states:
OFFICER/S RETURN-
THIS IS TO CERTIFY that copies of summons together with complaints and Notice of Raffle dated March 11, 2013, and other attached documents issued in the above-entitled case WERE SERVED upon the defendants in the following manner to wit.
1. VICENTE C. GO-Unserved on March 12, 2013, at Gotesco Tower A. No. 1129- Judge Natividad Lopez Street, Ermita Manila, for the reason that the defendant is unknown at the given address, as per information given by LEGASPI A.G. Security Guard on duty.36
Second, on 16 May 2013, Spouses Colet requested for the issuance of alias service of summons based on the address stated in petitioner's own Certificate of Sale,37 but service to petitioner was not made because the address turned out to be address of his legal representatives, Atty. Ruperto Listana and Victorio Balgos.38
And third, in the Sheriff's Return dated 20 March 2013, it was stated:
THIS IS TO CERTIFY, that the Order dated March 18, 2013 was SERVED by the undersign in the following manner:
x x x x
1. VICENTE C. GO- UNSERVED unknown at the given address.39
Petitioner, however, insists that the impossibility of personal service of summons has not been sufficiently established. This Court disagrees.
As discussed above, the sheriff must be diligent and resourceful in locating, and serving the summons upon the person of the defendant in observance of the principles of due process and fair play. Nonetheless, it does not mean that the service of summons, and the court's acquisition of jurisdiction over the defendant depends absolutely and entirely upon his, her or its acquiescence to be served the same.
In Sagana v. Francisco,40 this Court found that there was proper resort to substituted service of summons because of therein defendant's efforts to evade receipt of the summons. In that case, when the server attempted to serve summons at defendant's given address, the resident of the house refused to receive the summons and told the server that defendant is unknown at said address. The occupant refused to give his name. In the second attempt, respondent's own brother stated that defendant no longer lived a the said address. He also refused to sign for receipt of the summons, and then later claimed that he never received a copy, despite his participation in the proceedings. Thus, this Court clarified that while generally, there must be faithful compliance to the rules requiring service of summons in person, such rule cannot be used by evasive defendants to frustrate the ends of justice.41
This Court also made a similar ruling in Carson Realty & Management Corp. v. Red Robin Security Agency,42 where none of the officers of the defendant corporation, despite various visits of the process server, received the summons as they were supposedly not in the premises. This Court concluded that the officers of defendant corporation had a deliberate plan not to receive the summons.43
It is in line with the aforesaid rulings that this Court now weighs the sheriff's efforts to serve the summons, vis-à-vis petitioner's actions.
At the outset, petitioner's address in the records of the sum of money case was Gotesco Tower A, 1129 Judge Natividad Lopez Street, Ermita Manila (1129 Judge Natividad Lopez address). Petitioner stated this himself in the complaint, in the sum of money case.44 Such address also appeared in the notice of sale.45 Meanwhile, in the certificate of sale, petitioner's address was stated as 514 Ayala Boulevard, Ermita, Manila.
However, as noted by the CA, petitioner alleged in his motion for reconsideration before the RTC that he resides at No. 25 Natividad Almeda-Lopez Street, Barangay 659-A, Zone 71, Ermita Manila (25 Judge Natividad Lopez address). The CA further observed that in the attached answer, petitioner categorically remarked that he is "a resident of No. 25 Natividad Almeda-Lopez Street (formerly Concepcion Street), Barangay 659-A, Zone 71, Ermita District, Manila and not of Gotesco Tower A, 1129 Judge Natividad Lopez Street, Ermita Manila." It is clear that the 1129 Natividad-Lopez address is different from the 25 Natividad-Lopez address.46
Petitioner proceeds to explain that he lives in a building no. 25 inside 1129 Natividad Lopez St., Ermita Manila. He claims that 1129 Natividad Lopez is a large compound composed of various buildings, warehouses and other structures,47 and it was merely for convenience and practicality that he used the 25 Natividad Lopez address. Petitioner's explanation does not convince this Court. In the first place, petitioner has not presented any evidence establishing his allegation that he resides in one of the buildings inside the compound. He has not submitted, whether in the CA or even in this Court, copies of his billing statements, a photo or even a sketch of 1129 Natividad-Lopez Street. Moreover, for a supposed seasoned businessman, who is also with counsel, it is odd and contrary to regular practice to indicate the building number as the street or lot number for an address.
Given the foregoing, this Court is unprepared to fault the sheriff for failing to serve the summons to petitioner. Verily, the sheriff endeavored to ask the security guard at the given address for petitioner's residence but to no avail. Service was again attempted anew at the same address. Likewise, service was also attempted at the address indicated in the Certificate of Sale but such efforts also proved unsuccessful. Indeed, given the circumstances, resort to service by publication was justified. Sheriffs are not expected to be sleuths, and cannot be faulted where the defendants themselves engage in deception to thwart the orderly administration of justice.48
Spouses Colet's interest is superior than petitioner's levy on the property
In any case, this Court finds that petitioner's purported interest in the subject property is subordinate to that of Spouses Colet.
It is indeed true, as petitioner states, that a duly registered levy on attachment or execution is given preference to a prior unregistered sale. However, such rule has been clarified in Miranda v. Spouses Mallari,49 viz.:
The jurisprudential rule that preference is to be given to a duly registered levy on attachment or execution over a prior unregistered sale, which the CA adverted to in ruling that the right of Spouses Mallari prevails over that of Miranda, is to be circumscribed within another well-settled rule — that a judgment debtor can only transfer property in which he has interest to the purchaser at a public execution sale. Thus, the former rule applies in case ownership has not vested in favor of the buyer in the prior unregistered sale before the registered levy on attachment or execution, and the latter applies when, before the levy, ownership of the subject property has already been vested in favor of the buyer in the prior unregistered sale.50 (Emphasis supplied.)
In Miranda v. Spouses Mallari,51 this Court upheld the interest of the buyer in the prior unregistered sale over the levy made on the same property, despite the latter being registered on the certificate of title. This Court found that the levy made in 2003 did not create a lien in favor of Spouses Mallari because the subject property was already sold and its ownership had already been vested on Miranda in 1996, or seven years earlier.
Similarly, an examination of the records would show that Spouses Colet bought and acquired ownership over the subject property as early as 2005, or six years earlier. As enumerated in the Decision of the RTC-QC, Spouses Colet submitted proof of their purchase and ownership of the subject property since 2005, such as the Deed of Absolute Sale dated 9 May 2005, billing statements and certification from the Mira Nila Homeowners Association that they were residents in the subject property. Consistent with Miranda v. Spouses Mallari, the judgment debtors in the sum of money case, not being owners of the property, transferred no right or interest in the subject property at the time of levy in 2011.
This Court is aware of the case of Khoo Boo Boon v. Belle Corp. (Khoo Boo Boon)52 where We opined that:
The doctrine is well settled that "a levy on execution duly registered takes preference over a prior unregistered sale, and that even if the prior sale is subsequently registered before the sale in execution but after the levy was duly made, the validity of the execution sale should be maintained, because it retroacts to the date of the levy; otherwise, the preference created by the levy would be meaningless and illusory." This necessarily and logically proceeds from the fundamental principle that registration is the operative act that conveys and binds lands covered by Torrens titles as far as third persons are concerned. Such a principle is now codified in Sections 51 and 52 of the Property Registration Decree (Presidential Decree No. 1529). Thus, "where there was nothing in the certificate of title to indicate any cloud or vice in the ownership of the property, or any encumbrance thereon, the purchaser [or indeed a government authority with powers to levy property in execution, e.g., the NLRC or LA] is not required to explore farther than what the Torrens title upon its face indicates."53
Contrasting the instant case with Khoo Boo Boon, it may appear that this ruling, along with prior precedents, Miranda, Guillermo v. Orix Metro Leasing and Finance Corp.,54 would now make certificates of title unreliable as evidence of rights and encumbrances. Nonetheless, We find that Khoo Boo Boon is not in conflict with the ruling in the case at bar. Truly, the cases of Miranda and Khoo Boo Boon have parallel themes in that both discussed the purpose of the Torrens system of registration, and its effect on conflicting claims on a titled property. Nonetheless, Khoo Boo Boon is significantly different to the Miranda case in that the controversy in Khoo Boo Koon originated from a third-party claim by Belle Corporation, the supposed prior buyer, in the execution proceedings implementing Khoo Boo Koon's victory against Legend International Resorts, Ltd. (LIRL) in an illegal dismissal case. The Court ultimately upheld the Labor Arbiter (LA) and the National Labor Relations Commission's (NLRC) order denying the third-party claim, and emphasized that in execution proceedings, as long as the judgment debtor has leviable interest in the subject property, the same may be levied on execution. Further, the LA and NLRC cannot rule on the substantive rights of the third-party claimant and the judgment creditor in the labor case. Instead, We opined that such conflicting rights should be adjudicated in an independent proceeding before the regular courts. To support this conclusion, the Court proceeded to cite the rule that a registered levy on execution takes preference over a prior unregistered sale.
On the other hand, the instant case stemmed from Spouses Colet's complaint for quieting of title, which directly questioned petitioner Go's interest in the subject property, citing the sale executed six years earlier, and claiming that they have exercised acts of ownership over the subject property ever since the sale. Thus, the RTC QC evaluated the evidence put forth by Spouses Colet establishing the circumstances of their purchase of the property, and whether they are in actual possession of the property in the concept of an owner.
Verily, Khoo Boo Boon cited the rule on registration of claims in connection with the primary ruling upholding the propriety of the labor agencies' denial of the third-party claim of a supposed prior buyer. It was not a substantive and final adjudication of the issue on whether the supposed first buyer is without any right to the subject property therein. In other words, the rule granting superior status to registered claims was cited to reinforce the necessity of a cursory determination of the rights of the parties in connection with a summary proceeding.
Considering the difference in terms of the procedural backdrop, Miranda suffices to dispose of the issues in the instant case as it similarly stems from a proceeding which directly adjudicates the substantive rights of the supposed buyer in a prior unregistered sale vis-à-vis a registered levy on the same property. Miranda should not be interpreted to diminish the credibility of the Torrens system as it merely implements the settled doctrine that registration is not a mode of acquiring or transferring ownership.1aшphi1 Registration of a sale does not affect its validity as between the contracting parties. Indeed, Miranda does not suggest that judges disregard the annotations on a certificate of title. It merely behooves courts to be more prudent in weighing these annotations with possible substantive rights which might not be reflected therein.
WHEREFORE, premises considered, the Petition is hereby DENIED. The Resolutions dated 28 February 2018 and 17 December 2018 rendered by the Court of Appeals in CA-G.R. SP No. 153185 are AFFIRMED.
SO ORDERED.
Gesmundo, C.J., Hernando, Rosario, and Marquez, JJ., concur.
Footnotes
1 Rollo, pp. 3-24.
2 Id. at 30-34; penned by Associate Justice Pedro B. Corales and concurred by Associate Justices Rosmari D. Carandang (a retired Member of this Court) and Elihu A. Ybañez.
3 Id. at 35-37; penned by Associate Justice Pedro B. Corales and concurred by Associate Justices Apolinario D. Bruselas, Jr. and Elihu A. Ybañez.
4 Id. at 38-54.
5 Id.
6 Id. at 55-63; penned by Presiding Judge Teresa P. Soriaso
7 Id. at 63.
8 Id. at 64-65.
9 Id. at 66-67.
10 Id. at 77.
11 Id.
12 Id. at 78-98.
13 Id. at 80.
14 Id. at 108.
15 Id. at 108.
16 Id. at 107-112; penned by Presiding Judge Alexander S. Balut.
17 Id. at 111-112.
18 Id. at 123-127.
19 Id. at 113-116; penned by Acting Presiding Judge Maria Gilda T. Loja-Pangilinan.
20 Id. at 135-154.
21 Id.
22 Id. at 31-33.
23 Id.
24 Id. at 35-37.
25 Id. at 3-24.
26 Sabado v. Sabado, G.R. No. 214270, 12 May 2021.
27 See Heirs of Manguiat v. Court of Appeals, 584 Phil. 403, 411 (2008).
28 People's General Insurance Corp. v. Guansing, 843 Phil. 197, 205 (2018).
29 Gomez v. Court of Appeals, G.R. No. 127692, 10 March 2004, 469 Phil. 38, 49 (2004).
30 De Pedro v. Romasan Development Corp., 748 Phil. 706, 727 (2014).
31 Id. at 728.
32 See Philippine Commercial International Bank v. Spouses Dy, 606 Phil. 615, 633 (2009).
33 Titan Dragon Properties Corp. v. Veloso-Galenzoga, G.R. No. 246088, 28 April 2021.
34 Id.
35 Id.
36 Rollo, p. 102.
37 Id. 71-72.
38 Id. at. 132.
39 Id. at 104.
40 617 Phil. 387 (2009).
41 Id. at 396.
42 805 Phil. 562 (2017).
43 Id. at 575.
44 Rollo, p. 38.
45 Id. at 66-68.
46 Id. at 71.
47 Id. at 17.
48 Supra note 38 at 398.
49 844 Phil. 176 (2018).
50 Id. at 198-199.
51 Id.
52 G.R. No. 204778, 06 December 2021.
53 Id.
54 G.R. No. 237661, 07 September 2020.
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