Reyes v. Noblejas
REITERATIONFacts
The Antecedents: Spouses Leonardo Gamboa and Aurora L. Cariaga mortgaged properties covered by Transfer Certificates of Titles Nos. 18230-18234 to the Philippine National Bank. Upon failure to pay, the mortgage was extrajudicially foreclosed under Act No. 3135. On February 6, 1963, the properties were sold at public auction to Arsenio Reyes, the highest bidder, for P6,010.00. The sheriff issued a certificate of sale on February 21, 1963, fixing the redemption period as "one (1) year from and after the date of the sale." The duplicate of this certificate was not registered in the Office of the Register of Deeds of Rizal. Procedural History: On February 10, 1964, Arsenio Reyes presented for registration an Affidavit of Consolidation of Ownership (executed Feb. 8, 1964) and a Deed of Sale. The Register of Deeds denied registration, citing the doctrine in Salazar v. Meneses that the redemption period for execution sales, which begins from registration, also applies to extrajudicial foreclosure sales of registered land. The Land Registration Commissioner affirmed this resolution upon appeal. Petitioner argued that Section 6 of Act 3135 clearly mandates the redemption period to be counted from the date of sale. The Petition: Petitioner sought review of the Land Registration Commissioner's resolution, contending that the redemption period should be counted from the date of the auction sale as per Section 6 of Act 3135.
Issue(s)
Whether the period of redemption in extrajudicial foreclosure sales of registered land under Act No. 3135, as amended, is counted from the date of the auction sale or from the date of the registration of the sheriff's certificate of sale. Whether the registration of the sheriff's certificate of sale is mandatory for the redemption period to commence in extrajudicial foreclosure sales of registered land.
Ruling
The resolution of the Land Registration Commissioner is affirmed. The Register of Deeds of Rizal is ordered to deny the registration of the Deed of Sale and the Affidavit of Consolidation of Ownership.
Ratio Decidendi
On the period of redemption for extrajudicial foreclosure sales of registered land: The Court held that the one-year period of redemption in extrajudicial foreclosure sales of registered land under Act No. 3135, as amended, must be reckoned from the date of the registration of the sheriff's certificate of sale in the Office of the Register of Deeds, not from the date of the auction sale. This is to align with the principle under the Torrens system, particularly Section 50 of Act 496, which states that "the act of registration is the operative act to convey and effect the land." Therefore, the certificate of sale does not take effect as a conveyance or bind the registered land until it is registered. The Court emphasized that this rule is mandatory and applies even if no third parties are involved, as registration serves to provide constructive notice to potential redemptioners, including the debtor's successors in interest, judicial creditors, or persons with subsequent liens. On the mandatory nature of registration: The Court affirmed the mandatory requirement under Section 27, Rule 39 of the Revised Rules of Court for the sheriff's certificate of sale to be filed (registered) in the Office of the Register of Deeds. Failure to register violates this provision and, in conjunction with Section 50 of Act 496, prevents the certificate from taking effect as a conveyance or binding the land. Consequently, the redemption period, for the purpose of executing a final deed of sale and consolidating ownership, cannot legally commence until such registration occurs. The Court reiterated that the purpose of registration is not solely to protect innocent third parties but also to provide publicity and security for all parties dealing with real property, including potential redemptioners.
Main Doctrine
In extrajudicial foreclosure sales of registered land under Act No. 3135, as amended, the one-year period of redemption is reckoned from the date of the registration of the sheriff's certificate of sale in the Office of the Register of Deeds, not from the date of the auction sale itself, to give effect to the operative act of registration under the Torrens system.