Go vs. Court of Appeals

A registered levy on execution does not prevail over a prior unregistered sale if ownership had already vested in the buyer before the levy, and service of summons by publication is valid if the sheriff made diligent but unsuccessful attempts at personal service at the defendant's provided addresses.

A judgment creditor attempted to satisfy a money claim by levying on and buying a property at execution sale, unaware that the judgment debtors had already sold the property to third parties six years prior. The prior buyers, who failed to register their deed, sued to quiet title and cancel the execution sale annotations, resulting in a default judgment against the judgment creditor who could not be located for personal service of summons.

• Original Filing: Civil Case No. 06-115453 (Sum of money) — RTC-Manila Branch 27; Civil Case No. Q-13-72861 (Quieting of title) — RTC-QC
• Lower Court Decision: 15 December 2008 — RTC-Manila ruled for Go in the sum of money case; 29 April 2015 — RTC-QC ruled for Spouses Colet in the quieting of title case, canceling Go's encumbrances.
• Appeal: Go filed a Petition for Annulment of Judgment with the CA (CA-G.R. SP No. 153185) after his MR before the RTC-QC was denied.
• SC Action: Petition for Certiorari assailing the CA Resolutions dated 28 February 2018 and 17 December 2018, which dismissed the Petition for Annulment.

• The Sum of Money Case: Go invested funds for a BSP contract awarded to Setcom Inc. and Spouses Bernardo. Defendants reneged. Go sued and won P1.7M plus damages from RTC-Manila.
• The Execution Sale: The RTC-Manila decision became final and executory. A writ of execution was issued. The property of Spouses Bernardo (TCT No. N-221568) was levied and sold at auction to Go for P4M on 15 September 2011. The Notice of Levy and Certificate of Sale were registered on the title. Go failed to consolidate his title.
• The Prior Unregistered Sale: Spouses Colet bought the same property from Spouses Bernardo via a Deed of Absolute Sale on 09 May 2005. They received the owner's duplicate title and took physical possession, but did not register the sale until 2012, at which point they discovered Go's levy.
• The Quieting of Title Case: Spouses Colet sued Go to cancel the encumbrances. The sheriff attempted to serve summons on Go at the "Gotesco Tower A, 1129 Judge Natividad Lopez St." address Go provided in his own sum of money complaint. The security guard said Go was unknown there. Alias summons were also attempted at the "514 Ayala Boulevard" address Go used in the Certificate of Sale, but it turned out to be his lawyers' address. The RTC-QC allowed service by publication. Go was declared in default for failing to file an answer.
• Default Judgment: RTC-QC ruled for Spouses Colet, canceling Go's levy and Certificate of Sale. Go's MR was denied.
• Petition for Annulment: Go filed with the CA, claiming lack of jurisdiction over his person (improper service) and preference of his registered levy over the unregistered sale. CA dismissed the petition for being procedurally and substantially defective, noting Go's conflicting addresses and lack of evidence supporting his claims.

• The CA erred in failing to rule that the RTC-QC did not acquire jurisdiction over his person because of improper service of summons; the impossibility of personal service was not sufficiently established to justify service by publication.
• The CA erred in ruling against his claim that his interest on the subject property (registered levy) enjoys preference over Spouses Colet's prior unregistered sale.

• (Implied from CA ruling and SC discussion) Service by publication was valid due to the sheriff's diligent efforts and Go's confusing/deceptive addresses.
• The prior unregistered sale prevails because ownership had already vested in Spouses Colet before the levy, meaning the judgment debtors had no more interest to transfer.

• Procedural Issues: Whether the CA erred in dismissing the Petition for Annulment; whether the RTC-QC acquired jurisdiction over Go's person given the service of summons by publication.
• Substantive Issues: Whether Go's registered levy on execution enjoys preference over Spouses Colet's prior unregistered sale.

• Procedural: The SC held that the CA did not err; service of summons by publication was valid. The sheriff made at least three attempts on different dates at addresses Go himself provided. Go's explanation that he lived inside a compound at a different building number was unsubstantiated by any billing statements, photos, or sketches. Sheriffs are not expected to be sleuths and cannot be faulted when defendants engage in deception or provide confusing addresses. Diligent inquiry was satisfied.
• Substantive: The SC held that Spouses Colet's interest is superior to Go's levy. While a registered levy generally prevails over a prior unregistered sale, this rule is circumscribed by the principle that a judgment debtor can only transfer the property in which they have an interest. Since ownership vested in Spouses Colet in 2005 (six years before the 2011 levy), Spouses Bernardo had no remaining interest to transfer at the time of the levy. Miranda v. Spouses Mallari applies, not Khoo Boo Boon, because this is a direct adjudication of substantive rights in a quieting of title case, not a summary third-party claim in execution proceedings.

• Preference of Registered Levy vs. Prior Unregistered Sale — A registered levy on execution is preferred over a prior unregistered sale unless ownership has already vested in the prior buyer before the levy. If ownership vested before the levy, the judgment debtor has no interest to transfer, making the levy ineffective against the prior buyer.
• Service of Summons by Publication — Allowed when the defendant's whereabouts are unknown and cannot be ascertained by diligent inquiry. Requisites: 1) a written motion supported by affidavit setting forth grounds, and 2) diligent efforts by the sheriff to ascertain the defendant's whereabouts.
• Diligence Requirement for Service by Publication — Requires prior resort to personal service under Section 7 and substituted service under Section 8 of Rule 14. The sheriff must make several attempts (at least three tries, preferably on at least two different dates) to personally serve the summons, with an explanation of why such efforts were unsuccessful.
• Sheriff's Diligence vs. Defendant's Evasion — Sheriffs must be resourceful and persevering, but they are not sleuths. Rules on personal service cannot be used by evasive defendants to frustrate the ends of justice. If a defendant provides confusing addresses or engages in deception, the sheriff's failure to personally serve will not invalidate subsequent service by publication.

• Section 14, Rule 14, Rules of Court — Service of summons by publication. Applied to justify the service on Go after diligent but failed personal service at his provided addresses.
• Sections 51 and 52, Presidential Decree No. 1529 (Property Registration Decree) — Registration as the operative act that conveys and binds land to third persons. SC clarified this does not diminish the Miranda rule; registration is not a mode of acquiring ownership, and courts must prudently weigh annotations with substantive rights not reflected on the title.