G.R. No. 244681, March 29, 2023
VICENTE C. GO, PETITIONER, VS. COURT OF APPEALS, SHERIFF ANDREW B. ALVIAR, THE REGISTER OF DEEDS OF QUEZON CITY AND SPOUSES RAFAEL M. COLET AND ROSARIO A.Z. COLET, RESPONDENTS.

FACTS

Petitioner Vicente C. Go filed a complaint for recovery of sum of money, breach of contract, and damages against Setcom Inc. and others (including Spouses Francisco and Ma. Teresa Bernardo) before the RTC of Manila (Branch 27). The RTC-Manila rendered a decision in Go’s favor, which became final and executory. Pursuant to a writ of execution, the sheriff levied on and sold at public auction a property in Quezon City registered under the name of Spouses Bernardo. Go was the highest bidder, and a Certificate of Sale was registered on the title. However, Go failed to consolidate his title.
Subsequently, Go discovered that Spouses Rafael and Rosario Colet had filed a complaint for cancellation of encumbrance, quieting of title, and damages against him before the RTC of Quezon City (RTC-QC). Spouses Colet claimed they had bought the same property from the Spouses Bernardo via a Deed of Absolute Sale dated May 9, 2005, took possession, and received the owner’s duplicate title, but only discovered the encumbrances (the levy and auction sale in Go’s favor) when they attempted to register the sale in 2012.
Go failed to file an answer in the RTC-QC case. The court declared him in default and proceeded to try the case ex-parte. The RTC-QC rendered a decision ordering the cancellation of the encumbrances (the Notice of Levy and Certificate of Sale) in favor of Go. Go filed a Motion for Reconsideration and to Admit Attached Answer, which was denied.
Go then filed a Petition for Annulment of Judgment with the Court of Appeals, arguing that the RTC-QC had no jurisdiction to interfere with the execution of the RTC-Manila’s decision (a co-equal court), that his registered encumbrances enjoyed preference over the Colet spouses’ prior unregistered sale, and that he was denied due process due to improper service of summons. The CA dismissed the petition for being procedurally and substantially defective, noting Go’s failure to attach required documents and unsubstantiated claim of improper summons. The CA also noted a discrepancy in Go’s stated addresses. His motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in dismissing the Petition for Annulment of Judgment.

RULING

The Supreme Court denied the petition and affirmed the CA Resolutions. The Court found no merit in Go’s arguments.
On the issue of service of summons, the Court held that while jurisdiction over the defendant’s person is not a prerequisite in a quasi in rem action (like the quieting of title case), service of summons is still required to satisfy due process. The rules allow service by publication only if the defendant’s whereabouts are unknown and cannot be ascertained by diligent inquiry, which requires prior attempts at personal and substituted service. The records showed that the sheriff attempted to serve summons at Go’s last known address (Gotesco Tower A) but was informed he no longer resided there. A follow-up inquiry at another address (Natividad Almeda-Lopez Street) also failed. The RTC-QC then granted the motion for service by publication. The Court found these efforts constituted the required diligent inquiry. Furthermore, Go’s subsequent filing of a Motion for Reconsideration and to Admit Answer in the RTC-QC case constituted a voluntary appearance, curing any defect in the service of summons.
On the substantive issue of preference, the Court ruled that the prior unregistered sale to the Spouses Colet prevails over the subsequent registered levy in favor of Go. Citing Miranda v. Spouses Aldaba, the Court reiterated that a prior unregistered sale is superior to a subsequent registered levy because the levy only attaches to whatever interest the judgment debtor still has in the property. Since the Spouses Bernardo had already sold the property to the Spouses Colet before the levy, they no longer had any leviable interest therein when the writ of execution was implemented. Registration is not a mode of acquiring ownership but merely a means of confirming it. The levy and auction sale could only transfer whatever rights the judgment debtors (Spouses Bernardo) still had, which was none. Therefore, the RTC-QC correctly ordered the cancellation of the encumbrances annotated in Go’s favor.