Go v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Vicente C. Go invested funds in a contract awarded by the Bangko Sentral ng Pilipinas to Setcom Inc. for the supply of UHF/VHF Trunking Radio Equipment. He alleged that he agreed to secure a supplier, loan funds, and divide profits with the defendants, but they reneged and found another financier. The Regional Trial Court of Manila (RTC-Manila) ruled in favor of Go, ordering the defendants to return P1,700,000.00 with interest, plus moral damages and attorney's fees. Pursuant to this decision, a property registered under Spouses Francisco and Ma. Teresa Bernardo was sold at an execution sale to Go. Procedural History: Following the execution sale, Go failed to consolidate his title. Subsequently, Spouses Rafael and Rosario Colet filed a complaint against Go for cancellation of encumbrance, quieting of title, and damages, claiming they had purchased the subject property from Spouses Bernardo in 2005. Go was declared in default by the RTC of Quezon City (RTC-QC) in this new case, and a decision was rendered in favor of Spouses Colet, ordering the cancellation of the encumbrances in Go's favor. Go's motion for reconsideration was denied. He then filed a Petition for Annulment of Judgment with the Court of Appeals (CA), arguing that the RTC-QC lacked jurisdiction and that his encumbrances had preference. The Petition: Petitioner Vicente C. Go filed a Petition for Certiorari with the Supreme Court, assailing the CA's dismissal of his Petition for Annulment of Judgment. Go contends that the CA erred in not ruling that the RTC-QC did not acquire jurisdiction over his person due to improper service of summons. He also argues that his interest on the subject property, arising from the execution sale, should enjoy preference over Spouses Colet's prior unregistered sale. The Supreme Court is tasked to determine if the CA erred in dismissing the Petition for Annulment.
Issue(s)
Whether the Court of Appeals erred in dismissing the Petition for Annulment of Judgment; and whether the RTC-Quezon City acquired jurisdiction over the person of petitioner Go. Whether petitioner Go's registered levy on execution enjoys preference over Spouses Colet's prior unregistered sale.
Ruling
The Petition is DENIED. The Resolutions dated 28 February 2018 and 17 December 2018 of the Court of Appeals in CA-G.R. SP No. 153185 are AFFIRMED.
Ratio Decidendi
On the dismissal of the Petition for Annulment of Judgment and jurisdiction over petitioner Go: The Court affirmed the CA's dismissal. Summons is a crucial implement of due process, and its proper service is essential for a valid judgment. While jurisdiction over the person is not always a prerequisite in actions quasi in rem if jurisdiction over the res is acquired, summons must still be served to satisfy due process requirements. Personal service is the preferred mode, but substituted service and service by publication are allowed under specific conditions. The Court found that the sheriff's efforts to serve summons on petitioner Go were diligent and resourceful, despite petitioner's inconsistent addresses and the information from the security guard that he was unknown at the Gotesco Tower address. The sheriff made multiple attempts at different addresses, including the one in the Certificate of Sale, and these attempts were unsuccessful. The Court noted the discrepancy between petitioner's stated addresses in his complaint and his motion for reconsideration, and his assertion that 1129 Natividad Lopez Street was a compound containing building no. 25. However, petitioner failed to present evidence to substantiate this claim. Given these circumstances, the resort to service by publication was justified, and the RTC-QC did not err in proceeding with the case ex-parte. The Court reiterated that sheriffs cannot be faulted when defendants actively evade service or engage in deception. On the preference of Spouses Colet's interest over petitioner's levy: The Court ruled that Spouses Colet's interest is superior. While a duly registered levy on execution generally takes preference over a prior unregistered sale, this rule is circumscribed by the principle that a judgment debtor can only transfer property in which they have an interest. The Court applied the ruling in Miranda v. Spouses Mallari, which held that if ownership has already vested in the buyer of a prior unregistered sale before the registered levy, the prior sale prevails. The evidence showed that Spouses Colet acquired ownership of the subject property in 2005 through a Deed of Absolute Sale, and presented proof of purchase and possession since then. Petitioner's levy occurred in 2011, six years after Spouses Colet's purchase. Therefore, at the time of the levy, Spouses Bernardo, the judgment debtors, no longer had ownership rights to transfer to petitioner Go. The Court distinguished this case from Khoo Boo Boon v. Belle Corp., explaining that Khoo Boo Boon dealt with a third-party claim in execution proceedings where the issue was the summary determination of rights, whereas the present case involved a direct adjudication of substantive rights in a quieting of title action. The Court emphasized that registration is not a mode of acquiring ownership but a means to convey and bind lands, and while annotations on titles are important, courts must also weigh them against substantive rights not reflected therein.
Main Doctrine
The validity of service of summons by publication is justified when diligent efforts to serve personally or by substituted service have been made and proven unsuccessful, especially when the defendant's evasive actions or inconsistent addresses contribute to the impossibility of service. Furthermore, a prior unregistered sale, if proven to have vested ownership in the buyer before a subsequent registered levy on execution, takes precedence over the levy, as the judgment debtor can only transfer rights they possess at the time of the levy.