G.R. No. 182280 ; July 29, 2013
TERESA C. AGUILAR, CESAR D. RAAGAS, VILLAMOR VILLEGAS, and THE REGISTER OF DEEDS FOR THE CITY OF MAKATI, Petitioners, vs. MICHAEL J. O’PALLICK, Respondent.

FACTS

Primetown Property Group, Inc. (PPGI) executed a Contract to Sell over a condominium unit in favor of Reynaldo Poblete and Tomas Villanueva, who subsequently assigned their rights to respondent Michael O’Pallick. PPGI issued a Deed of Sale to O’Pallick upon full payment, and he took possession of the unit. However, the sale was never registered or annotated on the title. In a separate case before the Housing and Land Use Regulatory Board (HLURB), petitioner Teresa Aguilar obtained a final judgment against PPGI. To satisfy the judgment, Sheriff Cesar Raagas levied on PPGI’s properties, including the subject unit, despite O’Pallick filing a third-party claim. The unit was sold at public auction to Aguilar, and a new title was issued in her name after the redemption period lapsed.
O’Pallick filed a complaint for quieting of title against Aguilar and others before the Regional Trial Court (RTC), seeking to annul the levy and sale and to recover the unit. He argued the levy created a cloud on his title as the true owner. The petitioners moved to dismiss, contending the RTC had no jurisdiction because the HLURB, as the agency that ordered the execution, had exclusive jurisdiction over disputes involving the levied property. The RTC dismissed the case, ruling it could not interfere with the execution of a co-equal administrative agency’s decision.

ISSUE

Whether the Regional Trial Court has jurisdiction over O’Pallick’s independent action to quiet title and annul the execution sale conducted pursuant to a final HLURB decision.

RULING

Yes, the RTC has jurisdiction. The Supreme Court affirmed the Court of Appeals, holding that O’Pallick, who was not a party to the HLURB case between Aguilar and PPGI, cannot be bound by the proceedings and execution therein due to the constitutional guarantee of due process. A judgment cannot prejudice a person who was not given his day in court. While the HLURB’s decision was final as to the parties therein, its execution could only affect the rights of the judgment debtor, PPGI. O’Pallick, claiming ownership derived from PPGI prior to the levy, had the right to vindicate his claim in a separate action.
The Court clarified that the principle of non-interference with co-equal bodies applies to the decisions themselves, not to independent actions filed by strangers to the original case to assert their superior rights over levied property. Citing precedents like Solidbank v. Court of Appeals, the Court ruled that a third-party claimant, whose claim is overridden by the sheriff, has the remedy of filing a separate vindicatory action to prove his ownership. This action is distinct from challenging the HLURB’s judgment and does not constitute improper interference. Therefore, the RTC correctly exercised jurisdiction over O’Pallick’s complaint for quieting of title.