Autocorp Group vs. Court of Appeals

The entry of an involuntary instrument, such as a sheriff's certificate of sale, in the primary entry book of the Register of Deeds constitutes registration, even if the fees are paid the following day due to the cashier's absence, and the presentation of the owner's duplicate certificate of title is not required for such registration.

Autocorp Group obtained an ₱85,000,000.00 loan from Keppel Monte Bank secured by a real estate mortgage on several properties, including lots co-owned by Autographics, Inc. Upon default, the bank requested extrajudicial foreclosure. Petitioners filed a complaint for annulment of the loan and mortgage, securing a preliminary injunction to halt the sale. The Court of Appeals annulled the injunction for lack of a proper hearing, and the sale proceeded. The bank then presented the sheriff's certificate of sale for registration. Petitioners sought to enjoin the registration and the bank's taking of possession, leading to the present dispute.

• The Loan and Default: Autocorp Group obtained an ₱85,000,000.00 loan from Keppel Monte Bank secured by a real estate mortgage on properties co-owned by Autographics, Inc. and registered under Eurasia Heavy Industries, Inc. Autocorp defaulted, requested an additional loan of ₱48,800,000.00, and subsequently defaulted on both accounts totaling ₱116,800,000.00.
• Foreclosure and First Injunction: The bank requested extrajudicial sale. Petitioners filed a complaint for annulment of the loan and mortgage, securing a preliminary injunction from RTC Branch 23. The Court of Appeals annulled this injunction for lack of a proper hearing.
• The Extrajudicial Sale: The sale proceeded on January 7, 1999. The bank was the lone bidder, and a Certificate of Sale was issued.
• Registration of the Certificate of Sale: On January 21, 1999, at 4:30 PM, the bank presented the certificate to the Register of Deeds of Cebu City. It was entered in the primary entry book, but fees were paid the next day because the cashier had left.
• Second Injunction: Petitioners filed an amended complaint seeking to enjoin the registration of the sale and the bank's possession. RTC Branch 5 issued a TRO on January 25, 1999, and a writ of preliminary injunction on February 15, 1999, after the bank's counsel failed to appear at the hearing.
• CA Reversal: The Court of Appeals annulled the injunction, holding that entry in the primary entry book equated to registration, making the injunction moot. It also ruled the injunction against taking possession was premature.

• Payment of Entry Fee as Condition Sine Qua Non: Petitioner argued that payment of the entry fee is a condition sine qua non before any valid entry can be made in the primary entry book; subsequent payment cannot cure the defect.
• Inapplicability of DBP v. Acting Register of Deeds: Petitioner maintained that the DBP case required presentation of the owner's duplicate certificate of title, which did not occur here, making the ruling inapplicable.
• Irregularities in Foreclosure: Petitioner contended that the injunction was proper due to irregularities in the extrajudicial foreclosure, such as the petition being filed with the Clerk of Court instead of the Executive Judge, the notice being issued before the CA decision became final, and the sale not being supervised by the Clerk of Court Ex Officio Sheriff.

• Entry as Equivalent to Registration: Respondent countered that the entry of the certificate of sale in the primary entry book on January 21, 1999, was equivalent to registration, rendering the TRO and injunction issued afterward issued with grave abuse of discretion.
• Premature Injunction on Possession: Respondent argued that the injunction preventing the bank from taking possession was premature because the bank had not yet filed a petition for a writ of possession, as required by Act No. 3135.

• Validity of Registration: Whether the entry of the sheriff's certificate of sale in the primary entry book, without same-day payment of fees, constitutes valid registration.
• Presentation of Owner's Duplicate Title: Whether the presentation of the owner's duplicate certificate of title is required for the registration of an involuntary instrument like a sheriff's certificate of sale.
• Injunction Against Possession: Whether a preliminary injunction may be issued to prevent the purchaser in a foreclosure sale from taking possession of the property prior to the filing of a petition for a writ of possession.

• Validity of Registration: The belated payment of fees was deemed substantial compliance. The entry in the primary entry book was made before the injunction, rendering the injunction moot. Section 56 of P.D. No. 1529 states instruments are regarded as registered from the time noted in the primary entry book.
• Presentation of Owner's Duplicate Title: The presentation of the owner's duplicate certificate of title is not required for involuntary instruments. Unlike voluntary instruments where the owner willingly surrenders the title, involuntary instruments are adverse to the owner, who would not willingly produce the duplicate title. The annotation on the entry book suffices.
• Injunction Against Possession: The injunction was properly set aside. A writ of possession issues as a matter of course after the redemption period or consolidation of ownership. An injunction cannot preempt the filing of a petition for a writ of possession.

• Registration of Involuntary Instruments — For involuntary instruments (e.g., sheriff's certificate of sale), presentation of the owner's duplicate certificate of title is not required for registration; entry in the primary entry book is sufficient to affect the real estate.
• Injunction as Moot — An injunction will not lie to prevent an act that has already become a fait accompli; once an instrument is entered in the primary entry book, it is regarded as registered, and enjoining its registration thereafter is moot.
• Ministerial Duty of Register of Deeds — It is the ministerial duty of the Register of Deeds to annotate an instrument on the certificate of title after valid entry in the primary entry book; registration is merely for notice, not a validation of the instrument's validity.

• "They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date..." — Quoting Section 56 of P.D. No. 1529, establishing that entry in the primary entry book constitutes registration.
• "Registration is merely a specie of notice. It is a ministerial act by which an instrument is sought to be inscribed in the records of the Office of the Register of Deeds and annotated at the back of the certificate of title covering the land subject of the instrument. It is not a declaration by the State that such an instrument is a valid and subsisting interest in the land." — Defining the nature and purpose of registration.

• DBP vs. Acting Register of Deeds of Nueva Ecija, 162 SCRA 450 (1988) — Followed. Held that a sheriff's certificate of sale is an involuntary instrument, and the registrant is under no necessity to present the owner's duplicate certificate of title for purposes of primary entry.
• Villasor vs. Camon, 89 Phil. 404 (1951) — Followed. Distinguished voluntary from involuntary instruments; for voluntary instruments, presentation of the owner's duplicate is necessary for registration to have the effect of conveyance.
• Chailese Finance, Corp. vs. Spouses Ma, 409 SCRA 250 (2003) — Followed. Disallowed injunction to prohibit the issuance of a writ of possession, just as issuance may not be stayed by a pending action for annulment of the mortgage.

• Section 56, P.D. No. 1529 (Property Registration Decree) — Governs the primary entry book; provides that instruments are regarded as registered from the time noted in the primary entry book upon payment of the entry fee.
• Section 63, P.D. No. 1529 — Mandates the Register of Deeds to make a brief memorandum of the extrajudicial foreclosure certificate of sale on the certificate of title.
• Section 7, Act No. 3135 — Governs the issuance of a writ of possession to the purchaser in an extrajudicial foreclosure sale during the redemption period.
• Section 71, P.D. No. 1529 — Provides the procedure for involuntary dealings when the duplicate certificate is not presented at the time of registration.

Austria-Martinez, Callejo, Sr., and Tinga, JJ.