Cardinal Building Owners Assn. v. Asset Recovery
REITERATIONFacts
The Antecedents: The underlying dispute originated from an unpaid assessment dues amounting to P530,554.00 owed by Benjamin Marual to the Cardinal Building Owners Association, Inc. (petitioner). The association filed a complaint for a sum of money against Marual. Subsequently, the parties entered into a Compromise Agreement, approved by the Regional Trial Court (RTC), wherein Marual agreed to pay the outstanding dues of P381,152.52 in installments. The agreement stipulated that failure to comply would entitle the association to execute the judgment or proceed with the extrajudicial enforcement of its lien. Procedural History: Marual defaulted on the Compromise Agreement, leading the petitioner to file a motion for execution, which the RTC granted, issuing a writ of execution. During the execution process, the petitioner discovered that Marual had mortgaged his condominium units to Planters Development Bank in 1993, which was foreclosed, and the units were sold to the bank in March 1996. Furthermore, Marual sold the same units to Asset Recovery and Management Corporation (respondent) in November 1996, with the deed of sale registered in February 1997. The respondent also filed a mandamus case to redeem the units. Despite these subsequent transactions, the petitioner filed a Motion for Possession with the RTC, which granted the motion and issued a writ of possession in July 1999, allowing the petitioner to repossess the units for four years to recover the debt. The Petition: The respondent, aggrieved by the RTC's issuance of the writ of possession, filed a Petition for Certiorari with the Court of Appeals, arguing that the RTC judge acted with grave abuse of discretion. The Court of Appeals granted the petition, nullifying the writ of possession, stating that it did not fall under the recognized instances for issuing such a writ and was inconsistent with the monetary nature of the compromise judgment. The petitioner, Cardinal Building Owners Association, Inc., then filed the instant Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, assailing the Court of Appeals' decision and arguing that it was not based on applicable law, specifically R.A. No. 4726 (The Condominium Act).
Issue(s)
Whether the Court of Appeals erred in nullifying the RTC's Order granting a writ of possession because the enforcement of a monetary judgment cannot be done through a writ of possession. Whether the RTC, Branch 4, Manila, acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the Order dated June 8, 1999, and the writ of possession, considering the nature of the lien under the Condominium Act.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The assailed Decision of the Court of Appeals in CA-G.R. SP No. 53216 was affirmed.
Ratio Decidendi
On the propriety of the writ of possession: The Court held that the Court of Appeals did not err in nullifying the RTC's Order granting a writ of possession. A writ of possession is generally issued in specific instances: land registration proceedings, extra-judicial foreclosure of realty mortgage, judicial foreclosure of mortgage (under certain conditions), and execution sales. The present case, stemming from a compromise agreement that resulted in a monetary judgment, does not fall under any of these categories. The obligation of Marual under the compromise agreement was monetary in nature, and its enforcement must be governed by Section 9, Rule 39 of the Rules of Court, which pertains to the execution of judgments for money. This rule allows for the satisfaction of the judgment through demand for immediate payment or by levy on the properties of the judgment obligor, not by the issuance of a writ of possession to physically dispossess the debtor or a subsequent transferee of the property. The Court reiterated the principle that an execution must conform to the judgment, and a writ of execution for the sale of mortgaged property is fatally defective if the judgment was for a sum of money. Therefore, the RTC, Branch 4, Manila, acted with grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the writ of possession, as it varied the terms of the compromise judgment and the applicable rules of execution for monetary judgments. On the nature of the lien under the Condominium Act: The Court also clarified that while Section 20 of R.A. No. 4726 (The Condominium Act) provides for a lien on condominium units for unpaid assessments, such a lien only becomes effective upon the registration of a notice of assessment with the Register of Deeds. The records did not show that petitioner had registered such a notice. Consequently, petitioner's claim for unpaid assessments could not be considered superior to the respondent's registered deed of sale. The lien provided by the Condominium Act, even if properly registered, is enforced through judicial or extra-judicial foreclosure, similar to a mortgage, and not through a writ of possession in a simple collection case. The compromise agreement's stipulation allowing for extrajudicial enforcement of the lien did not grant petitioner the right to a writ of possession, especially when the respondent, as a subsequent purchaser, had rights that needed to be considered in a proper foreclosure proceeding, not a summary repossession.
Main Doctrine
A writ of possession cannot be issued to enforce a monetary judgment arising from a compromise agreement, as such enforcement must be done through a writ of execution under Rule 39 of the Rules of Court, which allows for levy on properties, not the physical dispossession of units, unless the judgment specifically provides for such remedy.