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# AK010365
Go vs. Court of Appeals

This case involves a Petition for Certiorari assailing the Court of Appeals' dismissal of petitioner Vicente C. Go's Petition for Annulment of Judgment. The judgment sought to be annulled was rendered by the RTC-Quezon City, which quieted the title of Spouses Colet over a property previously levied upon and sold at execution sale to Go. Go challenged the RTC-QC's jurisdiction due to alleged improper service of summons and asserted the preference of his registered levy over the Colets' prior unregistered sale. The Supreme Court denied Go's petition, affirming the CA's decision, holding that the service of summons by publication was valid under the circumstances and that the Colets' ownership, established by a prior unregistered sale where ownership had vested before the levy, was superior to Go's subsequent registered levy.

Primary Holding

A prior unregistered sale where ownership has already been vested in the buyer prevails over a subsequent registered levy on execution, as a judgment debtor can only transfer property in which they have an interest at the time of the levy; service of summons by publication is valid when, after diligent efforts to serve personally or by substitution prove futile, particularly due to the defendant's own ambiguous or misleading information regarding their address.

Background

Petitioner Vicente C. Go obtained a favorable judgment in a sum of money case against Setcom Inc. and others (RTC-Manila). To satisfy the judgment, a property registered under the name of Spouses Francisco and Ma. Teresa Bernardo (judgment debtors) was levied upon and sold at an execution sale to Go as the highest bidder. Go, however, failed to consolidate his title. Subsequently, Spouses Rafael and Rosario Colet filed a case to quiet their title over the same property (RTC-Quezon City), claiming they had purchased it from Spouses Bernardo several years prior to Go's levy, although this sale was unregistered. The RTC-QC ruled in favor of Spouses Colet.

History

  1. Petitioner Go filed a complaint for sum of money, breach of contract, and damages (Civil Case No. 06-115453) with RTC-Manila, Branch 27.

  2. RTC-Manila rendered a Decision on December 15, 2008, in favor of petitioner Go in the sum of money case.

  3. Spouses Colet filed a complaint for cancellation of encumbrance, quieting of title, and damages (Civil Case No. Q-13-72861) with RTC-Quezon City against petitioner Go.

  4. RTC-Quezon City rendered a Decision on April 29, 2015, in favor of Spouses Colet in the quieting of title case, ordering the cancellation of encumbrances in Go's favor.

  5. Petitioner Go filed a Motion for Reconsideration and to Admit Attached Answer with Compulsory Counterclaim with RTC-Quezon City, which was denied on September 25, 2017.

  6. Petitioner Go filed a Petition for Annulment of Judgment (CA-G.R. SP No. 153185) with the Court of Appeals.

  7. The Court of Appeals issued a Resolution on February 28, 2018, dismissing Go's Petition for Annulment of Judgment.

  8. The Court of Appeals denied Go's motion for reconsideration in a Resolution dated December 17, 2018.

  9. Petitioner Go filed a Petition for Certiorari with the Supreme Court.

Facts

  • Petitioner Vicente C. Go won a sum of money case (Civil Case No. 06-115453) in RTC-Manila, which ordered defendants, including Spouses Francisco and Ma. Teresa Bernardo, to pay him P1,700,000.00 plus interest and damages.
  • The RTC-Manila decision became final and executory, leading to a writ of execution.
  • On September 15, 2011, a property covered by TCT No. N-221568, registered in the name of Spouses Bernardo, was sold at an execution sale to petitioner Go for P4 million.
  • The Notice of Levy on Execution (April 29, 2011) and Certificate of Sale (November 24, 2011) in Go's favor were registered on the property's title. Go failed to consolidate his title.
  • Spouses Rafael and Rosario Colet filed a complaint on March 7, 2013, with RTC-Quezon City (Civil Case No. Q-13-72861) for cancellation of encumbrance and quieting of title, claiming they bought the subject property from Spouses Bernardo via a Deed of Absolute Sale on May 9, 2005, took physical possession, and received the owner's duplicate TCT.
  • Spouses Colet discovered the encumbrances in Go's favor in 2012 when they tried to transfer the title to their names.
  • In the RTC-QC case, petitioner Go was declared in default for failure to file an answer after service of summons, which was eventually effected by publication.
  • The RTC-QC, on April 29, 2015, ruled in favor of Spouses Colet, ordering the cancellation of the levy and certificate of sale annotated in Go's favor. Go's subsequent motion for reconsideration was denied.
  • Go filed a Petition for Annulment of Judgment with the Court of Appeals, citing lack of jurisdiction by RTC-QC due to improper service of summons and denial of due process, and claiming his registered levy had preference.
  • The CA dismissed Go's petition, finding it procedurally and substantially defective, and upheld the validity of the service of summons by publication due to discrepancies in Go's provided addresses and failed attempts at personal service.

Arguments of the Petitioners

  • The RTC-Quezon City did not acquire jurisdiction over his person due to improper service of summons, as personal service was not impossible and diligent efforts were not sufficiently established to justify service by publication.
  • His duly registered levy on execution and certificate of sale enjoy preference over the Spouses Colet's prior but unregistered sale of the subject property.
  • The RTC-Quezon City, being a co-equal and coordinate court, had no jurisdiction to interfere with the execution of the final and executory decision of the RTC-Manila.
  • He was denied due process because he was not personally served summons in the quieting of title case.
  • The Court of Appeals erred in dismissing his Petition for Annulment of Judgment.

Arguments of the Respondents

  • (Spouses Colet, as plaintiffs in RTC-QC, implicitly argued) They are the rightful owners of the property by virtue of a Deed of Absolute Sale dated May 9, 2005, and had been in possession since then, prior to petitioner Go's levy.
  • (Spouses Colet, as plaintiffs in RTC-QC, implicitly argued) The encumbrances in favor of petitioner Go on their property's title constitute a cloud that should be removed.
  • (Court of Appeals, in dismissing Go's petition) Petitioner Go failed to attach supporting documents required under Section 4, Rule 47 of the Rules of Court for a petition for annulment.
  • (Court of Appeals, in dismissing Go's petition) Petitioner Go's claim of improper service of summons was unsubstantiated, noting discrepancies in his declared addresses and the sheriff's attempts to serve him.
  • (Court of Appeals, in dismissing Go's petition) Service by publication was justified given the circumstances, including petitioner's unclear addresses and the inability to serve him personally or by substitution.

Issues

  • Whether the Court of Appeals erred in dismissing petitioner Go's Petition for Annulment of Judgment.
  • Whether the RTC-Quezon City acquired jurisdiction over the person of petitioner Go through service of summons by publication in the quieting of title case.
  • Whether petitioner Go's registered levy on execution enjoys preference over Spouses Colet's prior unregistered sale of the subject property.

Ruling

  • The Supreme Court denied the Petition for Certiorari and affirmed the Resolutions of the Court of Appeals.
  • The service of summons by publication on petitioner Go was valid. The sheriff attempted service at addresses provided by Go himself in other documents (complaint for sum of money, certificate of sale). Discrepancies and unclarity in Go's addresses, coupled with unsuccessful attempts at personal service (at least three times on different dates at different addresses), justified resort to service by publication. The Court found that petitioner's own actions contributed to the difficulty in serving him.
  • Spouses Colet's interest in the subject property is superior to petitioner Go's levy. While a duly registered levy generally takes preference over a prior unregistered sale, this rule is circumscribed by the principle that a judgment debtor can only transfer property in which he has an interest. Since Spouses Bernardo had already sold the property to Spouses Colet in 2005 and ownership had vested in the Colets (evidenced by the sale and possession) before Go's levy in 2011, the Spouses Bernardo no longer had any interest in the property that could be levied upon. Thus, the judgment debtors (Spouses Bernardo) transferred no right or interest to Go at the time of the levy.
  • The Court distinguished this case from Khoo Boo Boon v. Belle Corp., stating that Miranda v. Spouses Mallari is more applicable as the instant case directly adjudicates substantive rights of a prior buyer versus a subsequent levy, whereas Khoo Boo Boon involved a summary third-party claim in execution proceedings.

Doctrines

  • Service of Summons (Personal, Substituted, and by Publication) — Summons is a writ notifying the defendant of an action. Proper service is essential for due process and jurisdiction. Personal service is preferred. Substituted service is allowed if personal service is impossible within a reasonable time. Service by publication is allowed when the defendant's whereabouts are unknown and cannot be ascertained by diligent inquiry, after unsuccessful attempts at personal and substituted service, and upon motion with affidavit. It was applied here as the Court found diligent efforts by the sheriff to serve Go personally were made, but failed due to Go's own unclear/misleading addresses, justifying service by publication.
  • Jurisdiction over the Person in Quasi in Rem Actions — In actions quasi in rem (like quieting of title), while jurisdiction over the res is primary, summons must still be served on the defendant to satisfy due process. It was applied to underscore that even in quasi in rem actions, due process via proper summons is required. The Court found this was satisfied through valid service by publication.
  • Due Process in Service of Summons — Proper service of summons is a fundamental requirement of due process. Violation of this is a jurisdictional defect. The Court held that due process was satisfied because the resort to service by publication was justified after diligent but unsuccessful efforts for personal service, partly due to petitioner's own actions regarding his address.
  • Preference of Registered Levy over Unregistered Sale (and its Exception) — Generally, a duly registered levy on attachment or execution takes preference over a prior unregistered sale. However, this rule applies only if ownership has not yet vested in the buyer of the prior unregistered sale. If ownership has already passed to the buyer before the levy, the judgment debtor no longer has an interest in the property to be levied upon. This exception was applied to rule that Spouses Colet's ownership, acquired in 2005, prevailed over Go's 2011 levy, as the judgment debtors (Spouses Bernardo) no longer owned the property at the time of the levy.
  • Registration as Not a Mode of Acquiring Ownership — Registration under the Torrens system is not a mode of acquiring or transferring ownership but merely confirms title or interest already vested. It does not validate an otherwise invalid transfer. This doctrine supported the ruling that although Colets' sale was unregistered, their ownership had already vested, making the subsequent levy on the property (as if still owned by the judgment debtor) ineffective.
  • Annulment of Judgment (Rule 47) — This is a remedy in equity available only when ordinary remedies like appeal, petition for relief, or others are no longer available through no fault of the petitioner. Grounds are extrinsic fraud and lack of jurisdiction. Petitioner Go invoked lack of jurisdiction (due to improper summons) as a ground. The Court found no merit in this claim.

Key Excerpts

  • "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."
  • "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."
  • "The jurisprudential rule that preference is to be given to a duly registered levy on attachment or execution over a prior unregistered sale...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."
  • "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. Registration of a sale does not affect its validity as between the contracting parties."

Precedents Cited

  • Miranda v. Spouses Mallari (844 Phil. 176 (2018)) — Cited as controlling precedent. It established that if ownership of property has already vested in a buyer through a prior unregistered sale before a levy on execution, the levy is ineffective because the judgment debtor no longer has an interest in the property. This case was directly applied to rule in favor of Spouses Colet.
  • Khoo Boo Boon v. Belle Corp. (G.R. No. 204778, 06 December 2021) — Distinguished from the current case. While it states that a registered levy takes preference over a prior unregistered sale, the Supreme Court clarified that Khoo Boo Boon involved a third-party claim in execution proceedings (a summary procedure), whereas the present case directly adjudicates substantive rights in a quieting of title action, making Miranda more applicable.
  • Titan Dragon Properties Corp. v. Veloso-Galenzoga (G.R. No. 246088, 28 April 2021) — Referenced for the diligence requirement for service of summons by publication, emphasizing prior resort to personal and substituted service and proof of their ineffectiveness.
  • Sagana v. Francisco (617 Phil. 387 (2009)) — Cited to support the principle that rules on service of summons cannot be used by evasive defendants to frustrate justice, especially when there are efforts by the defendant to evade service.
  • Carson Realty & Management Corp. v. Red Robin Security Agency (805 Phil. 562 (2017)) — Cited for a similar situation where defendants deliberately avoided service of summons, justifying alternative modes.
  • Sabado v. Sabado (G.R. No. 214270, 12 May 2021) — Cited for the definition of summons as a procedural tool.
  • Heirs of Manguiat v. Court of Appeals (584 Phil. 403 (2008)) — Cited for the principle that proper service of summons is essential to render a judgment valid.
  • People's General Insurance Corp. v. Guansing (843 Phil. 197 (2018)) — Cited for the rule that violation of due process (e.g., improper summons) is a jurisdictional defect.
  • Gomez v. Court of Appeals (469 Phil. 38 (2004)) — Cited regarding the necessity of serving summons in quasi in rem actions to satisfy due process.
  • De Pedro v. Romasan Development Corp. (748 Phil. 706 (2014)) — Cited for the rules on personal service of summons and service by publication.
  • Philippine Commercial International Bank v. Spouses Dy (606 Phil. 615 (2009)) — Cited for the concept that defective service of summons can be cured by waiver or voluntary appearance.
  • Guillermo v. Orix Metro Leasing and Finance Corp. (G.R. No. 237661, 07 September 2020) — Mentioned as a prior precedent related to the issues, contrasted with Khoo Boo Boon.

Provisions

  • Rules of Court, Rule 14 (Summons) — Specifically Sections 7 (Personal service), 8 (Substituted service), and 14 (Service upon defendant whose identity or whereabouts are unknown), were central to the discussion on the validity of service of summons by publication.
  • Rules of Court, Rule 47, Section 4 — Mentioned by the CA regarding the requirement to attach supporting documents to a Petition for Annulment of Judgment.
  • Presidential Decree No. 1529 (Property Registration Decree), Sections 51 and 52 — Referenced in the discussion of Khoo Boo Boon regarding registration as the operative act that conveys and binds lands covered by Torrens titles as far as third persons are concerned.