Villavicencio v. Mojares
REITERATIONFacts
The Antecedents: Petitioners are the legal heirs of Jose Villavicencio. The subject property, a house and lot owned by Spouses Carlito and Myrna Martell, was mortgaged to Home Bankers Savings and Trust Company (HBSTC). The Martell spouses defaulted, and HBSTC foreclosed the mortgage, acquiring the property at auction on January 16, 1991. Subsequently, the Martell spouses negotiated the sale of the property to Jose Villavicencio, executing a Deed of Sale with Assumption of Obligation. HBSTC issued a Certificate of Redemption on June 27, 1991, after the Martell spouses paid P622,605. Meanwhile, Alejandro Mojares had secured a writ of attachment on the property in Civil Case No. Q-52417, annotated on December 22, 1987. A decision in favor of Mojares became final, leading to a writ of execution and a scheduled sheriff's sale on May 20, 1991. Jose Villavicencio filed an Affidavit of Third Party Claim, but the sale proceeded with Mojares as the highest bidder. A Sheriff's Certificate of Sale was executed and annotated on May 22, 1992. Due to a fire that razed the Register of Deeds office, TCT No. 262376 was replaced by new titles, including TCT No. 65497, which bore the entries of the Notice of Levy on Attachment and the Sheriff's Certificate of Sale, and was in the name of Jose and Ofelia Villavicencio. Procedural History: Petitioners filed a Complaint for Annulment of Sheriff's Sale and Damages against Mojares and Deputy Sheriff Rodolfo Payumo, among others. The Regional Trial Court (RTC) dismissed the case against Mojares and Payumo after they filed a Demurrer to Evidence. The RTC denied petitioners' Motion for Reconsideration. Petitioners appealed to the Court of Appeals (CA), which affirmed the RTC's decision. The CA also denied petitioners' Motion for Reconsideration. The Petition: Petitioners seek to set aside the CA's decision and resolution, raising issues regarding the validity of the sheriff's sale due to alleged lack of notice and improper payment, and the binding effect of the attachment/levy on them.
Issue(s)
Whether the sheriff’s execution sale was invalid due to lack of written notice to the judgment debtor and failure of the purchaser-judgment creditor to pay the bid in cash. Whether the attachment/levy on the subject property is binding on the petitioners, considering it was allegedly not annotated on the owner's copy of the title on file with the Register of Deeds. Whether the levy/attachment was binding on petitioners although the record was not reconstituted in accordance with law. Whether the levy/attachment was void with respect to one-half of the litigated property.
Ruling
The Supreme Court denied the petition for lack of merit, affirming the decision of the Court of Appeals which upheld the validity of the sheriff's execution sale and the binding effect of the attachment/levy on the property. The Court found no reversible error of law in the decisions of the lower courts.
Ratio Decidendi
On the validity of the sheriff's execution sale: The Court held that the issue of compliance with notice and publication requirements for an execution sale involves factual determination, which is generally not proper in a petition for review on certiorari under Rule 45. It reiterated the principle that findings of fact by the CA are binding on the Supreme Court. Furthermore, the Court noted that personal notice to the mortgagor is not necessary in extrajudicial foreclosure sales, as publication is sufficient. The petitioners failed to present sufficient evidence to rebut the presumption of regularity in the foreclosure proceedings and to prove the lack of service of notice of sale. Regarding the payment of the bid in cash, the Court clarified that Section 21, Rule 39 of the Rules of Court does not require cash payment for the bid, especially when the purchaser is the judgment obligee and no third-party claim has been filed, or if the bid does not exceed the judgment amount. On the binding effect of the attachment/levy: The Court agreed with the CA that the attachment/levy was binding on the petitioners. The existence of the levy was evidenced by TCT No. 65497, which showed the annotation of the attachment on December 22, 1987, despite the owner's copy of the previous title not bearing the entry. An officer from the Register of Deeds admitted the receipt of the notice of levy. Since the attachment preceded the sale to the petitioners, it constituted a superior lien. The Court emphasized that an auction or execution sale retroacts to the date of the levy of the attachment, thus giving Mojares, as the purchaser-judgment creditor, a superior right over the petitioners who bought the property subject to the levy. On the binding effect of the levy/attachment despite lack of reconstitution: The Court acknowledged the fire that destroyed the Register of Deeds records, noting that deviations from normal procedures are expected in such unforeseen circumstances. On the claim that the levy was void concerning one-half of the property: The Court found it unmeritorious. It was not established that Myrna Martell had an interest in the property, and she and her husband, who would be most prejudiced, showed indifference to the proceedings. The issue of Myrna Martell's interest was also deemed a question of fact not proper for resolution in this petition, as the case did not involve her rights.
Main Doctrine
The Supreme Court affirmed the Court of Appeals' decision, upholding the validity of the sheriff's execution sale and the binding nature of the attachment/levy on the subject property, finding that the petitioners failed to sufficiently prove the alleged procedural infirmities and that the attachment, having been registered prior to the sale to petitioners, constituted a superior lien.