Bon-Mar Realty and Sport Corp. v. De Guzman
CLARIFICATIONFacts
The Antecedents: Spouses Nicanor, Jr. and Esther de Guzman (DE GUZMANS) owned two lots in Greenhills, San Juan, covered by Transfer Certificates of Title (TCT) Nos. 9052 and 9053. Due to a need for campaign funds, the DE GUZMANS borrowed money from Mario and Erlina Siochi (SIOCHIS) and executed a deed of sale dated April 10, 1987, over the subject lots as collateral. The SIOCHIS, however, caused the cancellation of the DE GUZMANS' titles and had new titles (TCT Nos. 275-R and 276-R) issued in their name. Subsequently, the SIOCHIS sold the lots to Jayme and Evelyn Uy (UYS), who were issued TCT Nos. 277-R and 278-R, and the UYS then entered into a lease agreement with Roberto Salapantan. Procedural History: Upon learning of the transfers, the DE GUZMANS filed Civil Case No. 56393 for annulment of titles and reconveyance. On December 28, 1990, the Regional Trial Court (RTC) of Pasig City, Branch 168, ruled that the agreement between the DE GUZMANS and SIOCHIS was an equitable mortgage, nullified the sales to SIOCHIS and UYS, and ordered reconveyance to the DE GUZMANS. The Court of Appeals (CA) affirmed this ruling. The SIOCHIS appealed to the Supreme Court (SC) in G.R. No. 109217, which was denied and became final on December 11, 1994. The UYS also appealed to the SC in G.R. No. 109197. While the UYS' petition was pending, Bon-Mar Realty and Sport Corporation (BON-MAR) filed Civil Case No. 67315 for nullification of title against the UYS, claiming it bought the lots from spouses Abundia and Jose Garcia (GARCIAS), who in turn bought them from the DE GUZMANS after G.R. No. 109217 became final. BON-MAR alleged the UYS forged signatures for a subsequent transfer. BON-MAR annotated a notice of lis pendens. On June 21, 2001, the SC in G.R. No. 109197 found the UYS were not buyers in good faith, which became final on November 20, 2001. On September 25, 2001, the RTC in Civil Case No. 67315 nullified the UYS' titles and reinstated BON-MAR's titles. The UYS' appeal to the CA was dismissed on August 16, 2004, making BON-MAR's ownership final on September 5, 2004. The Petition: On May 28, 2002, the DE GUZMANS moved for a writ of execution in Civil Case No. 56393. BON-MAR filed an Omnibus Motion to intervene and quash the writ, alleging the judgment had been satisfied and it was the lawful owner. The RTC denied BON-MAR's motion on December 18, 2003, and the CA affirmed, stating BON-MAR was a stranger to the litigation. BON-MAR did not appeal this CA decision, which became final on February 10, 2006. Meanwhile, after the finality of Civil Case No. 67315, BON-MAR moved for execution, but the Register of Deeds of San Juan refused to transfer titles. The DE GUZMANS then moved for a writ of possession in Civil Case No. 56393, which BON-MAR opposed and filed an Affidavit of Third-Party Claim. The RTC granted the writ of possession and ignored BON-MAR's third-party claim. BON-MAR appealed this to the CA (CA-G.R. SP No. 94945). Separately, BON-MAR filed SCA No. 2988-SJ, a special civil action for contempt, against the Registrar of Deeds for refusal to transfer titles. The DE GUZMANS sought to intervene in SCA No. 2988-SJ, which the RTC denied. The DE GUZMANS appealed this denial to the CA (CA-G.R. SP No. 97812). The CA consolidated CA-G.R. SP No. 94945 and CA-G.R. SP No. 97812, denying BON-MAR's petition in the former (affirming the writ of possession) and granting the DE GUZMANS' intervention in the latter. BON-MAR then filed the instant petition for review on certiorari before the Supreme Court, assailing the CA's November 14, 2007 Decision and March 17, 2008 Resolution.
Issue(s)
May BON-MAR intervene in the proceedings in Civil Case No. 56393? Are the DE GUZMANS entitled to a writ of possession? May the DE GUZMANS intervene in SCA No. 2988-SJ?
Ruling
The Court GRANTED the petition in CA-G.R. SP No. 94945, REVERSED and SET ASIDE the assailed Decision of the Court of Appeals dated November 14, 2007, denying BON-MAR Realty and Sport Corporation's petition for intervention in Civil Case No. 56393 and granting Spouses Nicanor, Jr. and Esther de Guzman's motion for issuance of a writ of possession, and the Resolution dated March 17, 2008, denying reconsideration thereof. The Regional Trial Court of Pasig City, Branch 168, in Civil Case No. 56393 is DIRECTED to receive evidence on Bon-Mar Realty and Sport Corporation's third-party claim with a view to determining the nature and extent of its claim to the subject lots and to hold in abeyance the enforcement of the writ of possession. The Court DISMISSED the petition in CA-G.R. SP No. 97812, REVERSED and SET ASIDE the November 14, 2007 Decision of the Court of Appeals granting the leave to intervene of the Spouses Nicanor, Jr. and Esther de Guzman in SCA No. 2988-SJ, as well as the March 17, 2008 Resolution denying the motion for reconsideration. SCA No. 2988-SJ is ordered DISMISSED for being the wrong mode of remedy.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that BON-MAR may intervene in Civil Case No. 56393. The decision in Civil Case No. 67315, which declared BON-MAR as the owner of the subject lots, became final and executory on September 5, 2004. This final judgment established BON-MAR's legal interest in the subject matter of Civil Case No. 56393, making it a necessary party. The Court emphasized that BON-MAR is not a mere stranger to the litigation but a successor-in-interest of the DE GUZMANS, whose intervention is necessary to achieve complete relief and determine if the DE GUZMANS' claim has already been satisfied. While BON-MAR's initial motion to intervene was properly denied when its title was still inchoate, the subsequent finality of the judgment in Civil Case No. 67315 changed the factual landscape, granting BON-MAR the legal interest to defend its title. The trial court also erred in ignoring BON-MAR's third-party claim, which is a valid procedural mechanism under Rule 39, Section 16 of the Rules of Court, allowing third parties to protect their interests in levied property. Therefore, BON-MAR should be given the opportunity to ventilate its claim in Civil Case No. 56393, as the judgment in Civil Case No. 67315, declaring BON-MAR as owner, renders the DE GUZMANS' attempt to execute anew a judgment that may have been previously satisfied, moot. On Issue 2: The Supreme Court held that the DE GUZMANS are not entitled to a writ of possession at this stage. A writ of possession cannot be issued when title is in doubt, especially when a third-party claim has been interposed and not yet resolved. The Court cited the dissenting opinion of Justice Barredo in Guevara v. Ramos, which highlighted the impracticality of awarding possession to a party when a third-party claim is pending, only to potentially return it later. A proceeding for the issuance of a writ of possession is merely an incident in the transfer of title, and courts should not grant it where title remains disputed. The trial court's failure to conduct a hearing on BON-MAR's third-party claim was an error, as actual possession under a claim of ownership raises a disputable presumption of ownership, requiring judicial process for recovery, not a summary writ. The Court concluded that the prudent course of action is to hold in abeyance the proceedings for the issuance of the writ until BON-MAR's intervention and third-party claim are fully heard and resolved, to avoid futile endeavors and further complications. On Issue 3: The Supreme Court ruled that the DE GUZMANS cannot intervene in SCA No. 2988-SJ. The Court found that SCA No. 2988-SJ, a special civil action for contempt against the Registrar of Deeds for refusing to transfer titles, was the wrong mode of remedy. Under Presidential Decree No. 1529, or the Property Registration Decree, when a Registrar of Deeds is in doubt or refuses registration, the proper procedure is for the aggrieved party to elevate the matter by 'consulta' to the Commissioner of the Land Registration Authority, as outlined in Section 117. The Commissioner's resolution on the 'consulta' may then be appealed to the Court of Appeals under Republic Act No. 5434 and Rule 43 of the 1997 Rules of Procedure. Since the primary action itself (SCA No. 2988-SJ) was procedurally flawed and should be dismissed, any intervention therein by the DE GUZMANS would be moot and improper. Therefore, the CA erred in granting the DE GUZMANS leave to intervene in a case that was fundamentally an incorrect legal recourse.
Main Doctrine
The Supreme Court clarified the requisites for intervention and the proper procedure for third-party claims in execution proceedings, emphasizing that a party with a final and executory judgment establishing its ownership over the subject property has a legal interest to intervene. It also established that a writ of possession cannot be summarily issued when title is in doubt and a third-party claim is pending, requiring the trial court to first hear the third-party claimant. Furthermore, the Court reiterated that the proper remedy for a Registrar of Deeds' refusal to register a document is a 'consulta' to the Commissioner of the Land Registration Authority, as provided under Presidential Decree No. 1529, and not a special civil action for contempt.