GR 119716; (July, 2007) (Digest)
G.R. No. 119716 ; July 31, 2007
ANTONIA J. GUTANG, Petitioner, vs. The DEPUTY SHERIFF, Regional Trial Court, Branch 22, Manila; The REGISTER OF DEEDS, City of Mandaluyong; ALBERTO LOOYUKO and JUAN O. UY, Respondents.
FACTS
The controversy involves a Mandaluyong property originally owned by the Spouses Mendoza. On April 22, 1977, respondents Alberto Looyuko and Juan O. Uy filed a money claim against Tomas Mendoza before the RTC of Manila, Branch 22, and secured a writ of preliminary attachment annotated on the title. Separately, petitioner Antonia J. Gutang obtained a favorable judgment against Tomas Mendoza from the CFI of Iloilo in 1980. Pursuant to a writ of execution, the same property was levied and sold at public auction to Gutang in 1984, leading to the issuance of TCT No. 242 in her name, which carried over the existing annotations including the respondents’ attachment.
Subsequently, the Manila RTC decided the respondents’ case in their favor in 1986. To satisfy this judgment, the property was again levied and sold at auction to the respondents in 1986. The Manila RTC later granted the respondents’ motion for the issuance of a final deed of sale and ordered the cancellation of Gutang’s TCT No. 242 and the issuance of a new title in the respondents’ names, which was done by the Register of Deeds. Gutang challenged this order, contending the Manila RTC had no jurisdiction to cancel her title.
ISSUE
Whether the Manila RTC acted without jurisdiction in ordering the cancellation of TCT No. 242 issued in the name of petitioner Antonia J. Gutang and the issuance of a new title in favor of respondents Looyuko and Uy.
RULING
The petition is denied. The Supreme Court upheld the validity of the foreclosure proceedings initiated by FGU Insurance Corporation, whose mortgage was annotated on the original title in 1976, prior to any claims by Gutang or the respondents. In the related case of Looyuko v. Court of Appeals, the Court ruled that FGU’s mortgage lien was superior. Consequently, when Gutang and the respondents purchased the property in their respective execution sales, they acquired not the property itself but only the judgment debtor’s equity of redemption, subject to FGU’s superior encumbrance.
Therefore, the cancellation of Gutang’s title and the issuance of a new one to the respondents, which was subsequently ordered cancelled in favor of FGU subject to the equity of redemption, was a procedural consequence of enforcing the execution sale in the respondents’ case. The Manila RTC, having jurisdiction over Civil Case No. R-82-5792, had the authority to order the cancellation of the certificate of title arising from its own execution proceedings to effectuate its judgment, especially since all titles remained subject to the paramount mortgage lien. The dispute was ultimately resolved by recognizing FGU’s superior right, with both Gutang and the respondents holding subordinate interests in the equity of redemption.