FIRST DIVISION
[G.R. No. 234227. September 29, 2021.]
SPOUSES ARMANDO E. TOLENTINO and ESTRELLA D. TOLENTINO, petitioners,vs. FANA REAL ESTATE CORPORATION and VERONICO OUANO, respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated September 29, 2021 which reads as follows:
"G.R. No. 234227 (Spouses Armando E. Tolentino and Estrella D. Tolentino v. Fana Real Estate Corporation and Veronico Ouano). — Before this Court is the Petition for Review 1 on Certiorari under Rule 45 of the Rules of Court assailing the Decision 2 dated April 27, 2017 and the Resolution 3 dated August 17, 2017 of the Court of Appeals (CA) in CA-G.R. CV No. 05579, reversing the Decision 4 dated May 3, 2013 of the Regional Trial Court, Branch 12, Cebu City (RTC) in Civil Case No. CEB-32859, that granted the complaint for quieting of title filed by petitioners.
On February 23, 1999, the spouses Armando and Estrella Tolentino (Spouses Tolentino) entered into a Deed of Absolute Sale with Primetown Property Group, Incorporated (Primetown) for the purchase of a condominium unit in Trinity Plaza Tower I located at Lahug, Cebu City. The subject of the sale was Unit 509-A of the said condominium project consisting of 32.30 square meters, and was then covered by Condominium Certificate of Title (CCT) No. C-1249. 5 The Deed of Absolute Sale dated February 23, 1999 was not registered with the Register of Deeds of Cebu City and remained in the name of Primetown.
It appears that on an earlier date, respondent Fana Real Estate Corporation (FREC) also purchased from Primetown a condominium unit in Gold Coast Tower in Lapu-Lapu City, Cebu. The purchase was covered by a Contract to Sell dated March 25, 1996. Respondent corporation made partial payments but for reasons unknown, Primetown did not push through with the development of Gold Coast Tower. Thus, FREC filed before the Regional Trial Court, Branch 55, Mandaue City (RTC Mandaue), a complaint for rescission of contract with damages against Primetown. 6
The RTC Mandaue decided against Primetown and held it liable to refund FREC the amount of P4,803,666.42, which represents the amount of payments already made. In due course, the RTC Mandaue issued a Writ of Execution dated February 12, 2002 over the personal properties of Primetown, not otherwise exempted by law from execution, and on its real property, if Primetown's personal properties are insufficient to satisfy the judgment award. 7
Subsequently, the RTC Mandaue issued a Notice of Levy/Attachment dated July 23, 2002 over several condominium certificates of title registered in the name of Primetown, including CCT No. C-1249, which covers the subject unit in Trinity Plaza Tower 1 previously purchased by the Spouses Tolentino. On the same date, the Sheriff of RTC Mandaue, Veronica Ouano, caused the annotation of the following entries on CCT No. C-1249: (1) Entry No. 252691-V-58 D.B., pertaining to the Writ of Execution dated February 12, 2002; and (2) Entry No. 252690-V-58 D.B., referring to the Notice of Levy/Attachment dated July 23, 2002. 8
Barely a year after, Primetown filed before the RTC, Branch 138, Makati City (RTC Makati), a petition for corporate rehabilitation and suspension of payments. In an Order dated August 15, 2003, the RTC Makati stayed the enforcement of all claims against Primetown. 9
Upon discovery of these events, petitioner Armando E. Tolentino asked from Primetown a copy of the condominium certificate of title of the subject property. He was furnished CCT No. C-5250, which was issued on July 28, 2006 and registered in his and petitioner Estrella Tolentino's name. To their dismay, however, the annotation of the Writ of Execution dated February 12, 2002 and the Notice of Levy/Attachment dated July 23, 2002 on CCT No. C-1249 were carried over to CCT No. C-5250. 10
This prompted the Spouses Tolentino to file the present petition for quieting of title against FREC before the RTC, Branch 12, Cebu City (RTC Cebu). The Spouses Tolentino argued that the annotations created a cloud on their title and, accordingly, prayed that the entries on CCT No. C-5250 be cancelled. 11
In its Answer, FREC contended that the action for quieting of title is not the proper remedy of the Spouses Tolentino. It averred that the annotation of the entries on CCT-No. 1249 was pursuant to the Decision dated October 3, 2001 of the RTC Mandaue. During the trial of the case before the RTC Mandaue, CCT No. 1249 was still registered in the name of Primetown. It was only on July 28, 2006 that the new title, CCT No. 5250, was issued in the names of the Spouses Tolentino. Thus, it was only proper that the existing annotations on CCT No. 1249 were carried over to CCT No. 5250. 12
After trial, the RTC Cebu rendered its Decision 13 granting Spouses Tolentino's action for quieting of title. It held that the Spouses Tolentino are the owners of the subject property by virtue of a valid sale. 14 As such, FREC cannot attach or levy the subject property to satisfy the judgment award against Primetown, who was no longer its owner at the time of the annotation of the entries. 15 Accordingly, the RTC Cebu ordered the Register of Deeds of Cebu City to cancel the entries of the Writ of Execution dated February 12, 2002 and the Notice of Levy/Attachment dated July 23, 2002 on CCT No. C-5250. 16
FREC's motion for reconsideration was denied by the RTC Cebu on October 7, 2013. 17
Aggrieved, FREC appealed to the CA.
In a Decision 18 dated April 27, 2017, the CA reversed and set aside the ruling of the RTC Cebu. It held that the elements for an action to quiet title, namely, that (1) the plaintiff has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on plaintiff's title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy, were not established by the Spouses Tolentino.
On the first element, the CA held that legal title denotes a registered ownership. An unregistered deed of conveyance involving registered land shall not take effect or bind the land, but will operate only as a contract between the parties. 19 A perusal of the cancelled CCT No. C-1249 would show that the entries of the Writ of Execution dated February 12, 2002 and the Notice of Levy/Attachment dated July 23, 2002 were annotated on July 23, 2002, while a Deed of Absolute Sale dated July 6, 2006, which conveyed the subject property to the Spouses Tolentino, was annotated only on July 28, 2006. Thus, it is clear that the writ of execution and notice of levy/attachment in favor of FREC had been registered more than four (4) years earlier than the registration of the Deed of Absolute Sale of the Spouses Tolentino. In this regard, the prior registration of the writ of execution and notice of levy/attachment gives FREC a preferred right over the subject property. 20 Even assuming that the subject property was indeed transferred to the Spouses Tolentino by virtue of the Deed of Absolute Sale dated February 23, 1999, the CA emphasized that a levy on attachment duly registered takes preference over a prior unregistered sale. 21
With respect to the second element, the CA ruled that the Spouses Tolentino failed to raise any substantial challenge or grounds against the writ of execution and notice of levy/attachment which would render these entries invalid or inoperative. 22
The Spouses Tolentino's motion for reconsideration was denied by the CA in a Resolution 23 dated August 17, 2017. Hence, this Petition.
The Spouses Tolentino argue that the ownership of the subject unit was vested on them as early as February 23, 1999 when the Deed of Absolute Sale was executed. Since Primetown was no longer the owner of the subject property as of July 23, 2002, the subject property cannot be levied to satisfy Primetown's liabilities to FREC. 24 Moreover, the Stay Order issued by the RTC Makati in the rehabilitation proceedings of Primetown suspends the collection of all claims against it, including the execution of judgment issued by the RTC Mandaue in the complaint for rescission of contract filed by FREC. 25
In its Comment, 26 FREC avers that the CA correctly observed that it was the Deed of Absolute Sale dated July 6, 2006 which served as the basis for the cancellation of CCT No. C-1249. Thus, as between FREC's writ of execution and notice of levy/attachment which were registered on July 23, 2002, and the Spouses Tolentino's Deed of Absolute Sale dated July 28, 2006, the former prevails. 27 Even as between FREC's writ of execution and notice of levy/attachment and the Deed of Absolute Sale dated February 23, 1999, the former still prevails. For it is the settled rule that "preference is given to a duly registered levy on attachment or execution over a prior unregistered sale." 28
Thus, the sole issue in this case is whether or not the CA erred in reversing the decision of the RTC and dismissing the action for quieting of title filed by the Spouses Tolentino.
The petition is denied.
The Spouses Tolentino filed the present complaint for quieting of title arguing that the writ of execution and the notice of levy/attachment annotated on CCT No. C-5250 created a cloud on their title. 29 According to them, the annotation of these entries on the previous CCT No. C-1249 was erroneous, considering that at the time it was made, Primetown was no longer the owner of the subject property. They rely on the Deed of Absolute Sale dated February 23, 1999 showing that Primetown sold the subject property to them.
The CA, however, found that the basis for the cancellation of CCT No. C-1249 and the issuance of CCT No. C-5250 in the name of the Spouses Tolentino was actually a Deed of Sale dated July 6, 2006 and not the Deed of Sale dated February 23, 1999 presented during trial. The Deed of Sale dated July 6, 2006 was registered on July 28, 2006, or more than four (4) years after the annotation of the writ of execution and the notice of levy/attachment in favor of FREC was made.
It is well settled that only questions of law may be entertained in a petition for review on certiorari under Rule 45 of the Rules of Court. This Court "will not entertain questions of facts as the factual findings of the appellate court are final, binding, or conclusive on the parties and upon this Court when supported by substantial evidence." 30 While there are recognized exceptions 31 to this rule, the Court finds that none applies to the present case.
Time and again, this Court has ruled that an attachment is a proceeding in rem. 32 It is against the particular property, and is enforceable against the whole world. 33 Such a proceeding is in effect a finding that the property attached is an indebted thing and a virtual condemnation of it to pay the owner's debt. 34 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 the law. 35
As found by the CA, the writ of execution and the corresponding notice of levy/attachment in favor of FREC were annotated on the title long before the subject property was sold to the Spouses Tolentino. Since there was no showing that the attachment had been discharged, satisfied or otherwise cancelled, these entries subsist, and were properly carried over into the new CCT No. C-5250 in the name of the Spouses Tolentino. To reiterate, a duly registered attachment will subsist despite subsequent transfers of the property until it is otherwise discharged or vacated in accordance with law. As purchasers or transferees, the Spouses Tolentino merely stepped into the shoes of its transferor, Primetown, and are thus bound to acknowledge and respect the existing encumbrances on the title.
In order for an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or an equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance or proceeding claimed to be casting cloud on his title must be show to be in fact invalid or inoperative despite its prima facie appearance of validity or legal efficacy.
To recall, the Deed of Sale dated July 6, 2006 was registered on July 28, 2006 and CCT No. C-5250 was issued in the Spouses Tolentino's name. As registered owners at the time of the filing of the complaint, the Spouses Tolentino undoubtedly have legal title over the subject property. 36
With respect to the second requisite, Spouses Tolentino failed to show that the writ of execution and the notice of levy/attachment annotated on CCT No. C-5250 are invalid or inoperative as to cast cloud on their title. As discussed above, these entries were validly registered in accordance with the Torrens system. As such, they are enforceable against the subject property itself. Unless and until these entries are shown to have been discharged, satisfied, or otherwise vacated in the manner provided by law, they remain valid and subsisting. A mere invocation by the Spouses Tolentino that they are the owners of the subject property, nothing more, will not render these entries invalid or inoperative.
As a final point, this Court affirms the ruling of the CA in its Resolution dated August 17, 2017, that any question on the matter of the execution of the present case and its effect on the rehabilitation proceedings involving Primetown is premature. 37 The petition before this Court is limited to the action for quieting of title, the resolution of which only entailed a discussion on whether the writ of execution and the notice of levy/attachment in favor of FREC created a cloud on the title of the Spouses Tolentino.
WHEREFORE, premises considered, the petition is DENIED. The Decision dated April 27, 2017 and the Resolution dated August 17, 2017 of the Court of Appeals in CA-G.R. CV No. 05579 are hereby AFFIRMED. The complaint for quieting of title filed by the petitioners Spouses Armando E. Tolentino and Estrella D. Tolentino against respondent Fana Real Estate Corporation, et al., is DISMISSED. No pronouncement as to costs.
SO ORDERED."
By authority of the Court:
(SGD.) LIBRADA C. BUENADivision Clerk of Court
By:
MARIA TERESA B. SIBULODeputy Division Clerk of Court
Footnotes
1.Rollo, pp. 12-27.
2. Penned by Associate Justice Pamela Ann Abella Maxino, with Associate Justices Pablito A. Perez and Gabriel T. Robeniol, concurring; id. at 36-47.
3. Penned by Associate Pamela Ann Abella Maxino, with Associate Justices Edgardo L. Delos Santos (retired member of this Court) and Gabriel T. Robeniol, concurring; id. at 49-54.
4. Penned by Presiding Judge Estela Alma A. Singco of the Regional Trial Court, Branch 12, Cebu City; id. at 56-69.
5.Rollo, p. 36.
6.Id. at 37.
7.Id.
8.Id.
9.Id.
10.Id. at 37-38.
11.Id. at 38.
12.Id. at 39.
13.Id. at 56-59.
14.Id. at 68.
15.Id. at 69.
16.Id.
17.Id. at 39.
18.Id. at 36-47.
19.Id. at 41.
20.Id. at 42.
21.Id. at 43.
22.Id. at 45.
23.Id. at 49-54.
24.Id. at 20.
25.Id. at 23.
26.Id. at 167-176.
27.Id. at 168.
28.Id. at 169, citing Du v. Stronghold Insurance Co., Inc., 475 Phil. 723, 732 (2004).
29.Id. at 58.
30.Pascual v. Burgos, et al., 776 Phil. 167, 182 (2016).
31. (1) When the conclusion is a finding grounded entirely on speculation, surmises or conjectures x x x; (2) When the inference made is manifestly mistaken, absurd or impossible x x x; (3) Where there is a grave abuse of discretion x x x; (4) When the judgment is based on a misapprehension of facts x x x; (5) When the findings of fact are conflicting x x x; (6) When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee x x x; (7) The findings of the Court of Appeals are contrary to those of the trial court x x x; (8) When the findings of fact are conclusions without citation of specific evidence on which they are based x x x; (9) When the facts set forth in the petition as well as in the petitioners' main and reply briefs are not disputed by the respondents x x x; and (10) The finding of fact of the Court of Appeals is premised on the supposed absence of evidence and is contradicted by the evidence on record. x x x. Medina v. Mayor Asistio, Jr., 269 Phil. 225, 232 (1990) (Citations omitted).
32.Rural Bank of Sta. Barbara, Inc. v. The Manila Mission of the Church of Jesus Christ of Latter Day Saints, Inc., 613 Phil. 40, 51 (2014); Palma v. Court of Appeals, 302 Phil. 755, 763(1994); Santos v. Aquino, Jr., 282 Phil. 134, 142 (1992); Tan Chuy Suy v. Court of Appeals, 287Phil. 792, 803 (1992); Santos v. Judge Aquino, Jr., 282 Phil. 134, 142 (1992); BF Homes, Inc. v. Court of Appeals, 268 Phil. 276, 699 (1990).
33.Ligon v. RTC-Branch 56, Makati City, 728 Phil. 131, 142 (2014).
34.Government of the Philippine Islands v. Mercado, 67 Phil. 409, 413 (1939).
35.Valdevieso v. Damalerio, 492 Phil. 51, 58 (2005).
36. See Mananquil v. Moico, 699 Phil. 120 (2012).
37.Rollo, p. 53.