Autocorp Group v. Keppel Monte Bank
REITERATIONFacts
The Antecedents: Respondent bank extended an ₱85,000,000.00 loan to petitioner Autocorp Group, secured by mortgages on several properties, including those co-owned by petitioner Autographics, Inc. Autocorp defaulted on the loan and subsequently obtained an additional loan, also defaulting on both. The bank requested the extrajudicial sale of the mortgaged properties to satisfy the outstanding obligation. Procedural History: Petitioners filed a complaint for annulment of the loan agreement and mortgage, obtaining a Temporary Restraining Order (TRO) and later a writ of preliminary injunction from the RTC. The Court of Appeals (CA) set aside the RTC's preliminary injunction, finding the summary hearing insufficient. Subsequently, the bank proceeded with the extrajudicial sale, with the properties being awarded to the bank. Petitioners filed another complaint seeking to annul the foreclosure and prevent the registration of the certificate of sale. The RTC issued another TRO and subsequently a preliminary injunction. The CA annulled the RTC's orders, holding that the entry of the certificate of sale in the primary entry book was equivalent to registration and that the delay in fee payment was cured. The CA also found the injunction against taking possession premature. The Petition: Petitioners seek review of the CA's decision, arguing that the CA erred in considering the belated payment of fees as substantial compliance and that the entry in the primary entry book was not equivalent to registration without prior payment. They also question the CA's authority to reverse the RTC's findings of fact and law.
Issue(s)
Whether the Court of Appeals, in a petition for certiorari, can pass upon and reverse the findings of fact and law of the trial court made in the exercise of its jurisdiction. Whether the entry of the sheriff's certificate of sale in the primary entry book, despite a slight delay in the payment of registration fees, constitutes valid registration; and whether the preliminary injunction issued by the trial court preventing the registration of the certificate of sale and the bank from taking possession of the properties was proper.
Ruling
The petition is dismissed. The assailed decision and resolution of the Court of Appeals are affirmed. The Court held that the entry of the certificate of sale in the primary entry book, even with a slight delay in fee payment, constitutes substantial compliance and is equivalent to registration. Consequently, the injunction against registration was rendered moot. The injunction against taking possession was also deemed improper as a writ of possession issues as a matter of course during the redemption period.
Ratio Decidendi
On the Court of Appeals' authority in certiorari: The Court reiterated that a petition for certiorari under Rule 65 is a proper remedy to annul and set aside an order issued by a lower court with grave abuse of discretion amounting to lack or excess of jurisdiction. The Court of Appeals did not err in reviewing the RTC's orders, as the issuance of the preliminary injunction was tainted with grave abuse of discretion due to the alleged invalidity of the registration. The CA's review was confined to the question of whether the RTC acted without or in excess of its jurisdiction or with grave abuse of discretion. On the validity of registration, substantial compliance, and the injunction against taking possession: The Court affirmed the CA's ruling that the entry of the sheriff's certificate of sale in the primary entry book, even with a slight delay in the payment of entry and registration fees, constitutes substantial compliance with Section 56 of P.D. No. 1529. The entry was made on January 21, 1999, and the fees were paid the following day due to the cashier's absence, which was beyond the respondent bank's control. Crucially, the entry in the primary entry book was made prior to the issuance of the trial court's writ of injunction on January 25, 1999. The Court emphasized that registration is considered effective from the time of the notation in the primary entry book, regardless of subsequent fee payment, as long as the entry itself precedes the judicial intervention sought to be enjoined. The Court clarified that a sheriff's certificate of sale, being an involuntary instrument, does not require the presentation of the owner's duplicate certificate of title for primary entry, unlike voluntary instruments. The registration of such an involuntary instrument, through entry in the primary entry book, is sufficient to affect the real estate. The Court cited Section 63(b) of P.D. No. 1529, which mandates the Register of Deeds to make a brief memorandum of the certificate of sale on the certificate of title. The purpose of registration is to give notice, and the entry in the primary entry book serves this purpose effectively. The Court held that the preliminary injunction preventing the respondent bank from taking possession of the properties was also issued with grave abuse of discretion. Under Act No. 3135, a purchaser in a foreclosure sale is entitled to a writ of possession as a matter of course during the redemption period upon filing the proper motion and bond. The trial court cannot preemptively enjoin the bank from seeking this legal remedy, especially when the registration of the sale had already become a fait accompli. The issuance of a writ of possession is a ministerial duty of the court, and an injunction against it is generally disallowed.
Main Doctrine
The entry of a sheriff's certificate of sale in the primary entry book of the Register of Deeds, even if accompanied by a slight delay in the payment of registration fees due to circumstances beyond the registrant's control, constitutes substantial compliance and is equivalent to registration, thereby rendering a subsequent injunction against such registration moot and academic.