Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 180615               June 27, 2012

NATIONAL HOUSING AUTHORITY, Petitioner,
vs.
JOSE R. EVANGELISTA, Respondent.

D E C I S I O N

PEREZ, J.:

This is a petition for review on certiorari under Rule 45 seeking to reverse and set aside the following resolutions of the Court of Appeals in CA-G.R. SP No. 41546: (a) Resolution1 dated 17 July 2007, which granted respondent Jose Evangelistaís (respondent) Motion for Issuance of Writ of Execution of the Decision2 dated 11 August 1999 of the Court of Appeals; and (b) Resolution3 dated 12 November 2007 denying National Housing Authorityís (petitioner) Motion for Reconsideration of the Resolution of 17 July 2007.

The Writ of Execution4 subject of the assailed Resolution directs the Quezon City Register of Deeds to: (a) annotate on respondentís TCT No. 122944 the dispositive part of the 11 August 1999 Decision5 declaring the third paragraph of the dispositive portion of the decision dated 29 November 1995 of the Regional Trial Court of Quezon City void, non-binding and inapplicable insofar as TCT No. 122944 is concerned; and (b) cancel Entry No. 7159,6 an Affidavit of Adverse Claim executed by petitioner, which was annotated thereon.

The Antecedents

This case involves a 915-square meter parcel of land situated at V. Luna Road, Quezon City originally registered in the name of Peopleís Homesite and Housing Corporation (PHHC), the predecessor of petitioner .

An overview of the subsequent transfer of ownership/title to the property to several individuals is shown below:

Year New Transfer Certificate of Title Owner Mode of Acquisition Remarks
1968 TCT No. 138007 Adela Salindon purchased from PHHC  
After Salindon died TCT No. 239729 Arsenio S. Florendo, Jr., etc. bought from the heirs during the settlement of Salindonís estate TCT No. 138007 was cancelled
1984<   NHA

Supreme Court decision dated 19 May 1984 nullifying and setting aside the award in favor of Salindon

 
1986 TCT No. 28182 Luisito Sarte

Acquired as highest bidder in the public auction conducted by the Quezon City Treasurerís Office (despite the promulgation of the 14 May 1984 decision) due to the Florendosí non-payment of real estate taxes

 
1986 TCT Nos. 108070 (Lot 1-A) & 108071 (Lot 1-B) Luisito Sarte   Sarte had the lot subdivided into two (2) parts: (1) Lot 1-A; and (2) Lot 1-B
1994 TCT No. 108070 Respondent Evangelista Deed of Assignment executed by Sarte  
1994 TCT No. 122944
(Lot 1-A);
TCT No. 126639
(Lot 1-B)
Respondent Evangelista
Not a party to the instant case
 

TCT No. 108070 was cancelled;
An Affidavit of Adverse Claim and Notice of Lis Pendens were subsequently annotated at the back of TCT No. 122944

Thus, in 1968, Adela Salindon (Salindon) acquired the property from PHHC and was issued TCT No. 138007. However, in a Decision dated 20 May 1975 of the City Court of Quezon City, the sale was declared null and void. During the pendency of the appeal, Salindon died and her heirs settled her estate, including the subject lot. This resulted in the cancellation of TCT No. 138007 and the issuance of a new title, TCT No. 239729, in favor of its new owners, namely, Arsenio S. Florendo, Jr., Milagros Florendo, Beatriz Florendo and Eloisa Florendo-Kulphongpatana. Meanwhile, the Supreme Court, in its Decision dated 19 May 1984 in G.R. No. L-60544 entitled Arsenio Florendo, Jr. et al. v. Hon. Perpetua D. Coloma, Presiding Judge of Branch VIII, City Court of Quezon City, et. al., nullified and set aside the award in favor of Salindon and declared petitioner owner of the property.

The issue of ownership then arose when, notwithstanding the promulgation of the 19 May 1984 decision of the Supreme Court awarding the property to petitioner NHA, the Quezon City Treasurerís Office sold the land at a public auction due to the Florendosí years of non-payment of realty taxes. Consequently, TCT No. 28182 was issued in favor of Luisito Sarte (Sarte), the highest bidder at the auction. Sarte had the property divided into two (2) parts, Lot 1-A and Lot 1-B, for which he was issued new titles, to wit, TCT Nos. 108070 and 108071, respectively. This prompted petitioner to file an action for recovery of real property against Sarte, the City Treasurer of Quezon City and the Quezon City Register of Deeds (QCRD) before the Regional Trial Court of Quezon City in 1991. The case was docketed as Civil Case No. Q-91-10071.

During the pendency of Civil Case No. Q-91-10071, however, Sarte was able to transfer ownership of Lot 1-A covered by TCT No. 108070 to respondent because there was no notice of lis pendens annotated at the back of the title. TCT No. 108070 was thus correspondingly cancelled and a new one, TCT No. 122944, issued in the name of respondent. Significantly, it was only on TCT No. 122944 that the Affidavit of Adverse Claim (Entry No. 7159/T-No. 122944) and the Notice of Lis Pendens (Entry No. 1367/T-No. 122944)7 were annotated. Incidentally, the complaint for Annulment of Deed of Assignment, Deed of Absolute Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639 and Damages docketed as Civil Case No. Q-95-23940 subject of Entry No. 1367 was dismissed on 23 October 1995 in view of the pendency of Civil Case No. Q-91-10071.8

On 29 November 1995, the trial court rendered its Decision9 in Civil Case No. Q-91-10071, the dispositive portion of which reads:

ACCORDINGLY, judgment is hereby rendered in favor of the plaintiff National Housing Authority as follows:

1. The auction sale conducted by the Quezon City Treasurer in 1986 of the parcel of land consisting of 915.50 sq. m. subject of this case previously covered by TCT No. 138007 of the Register of Deeds of Quezon City issued in the name of Adela Salindon and wherein defendant Luisito Sarte was the auction buyer and TCT No. 239729 in the name of Arsenio Florendo, Milagros Florendo, Beatriz Florendo and Eloisa F. Kulphongpatana is hereby declared null and void ab initio;

2. TCT No. 28182 subsequently issued in the name of defendant Luisito Sarte by the Quezon City Registry of Deeds is hereby declared null and void ab initio and the herein defendant Quezon City Register of Deeds is hereby ordered to cancel said TCT 28182 in the name of Luisito Sarte;

3. Any transfers, assignment, sale or mortgage of whatever nature of the parcel of land subject of this case made by defendant Luisito Sarte or his/her agents or assigns before or during the pendency of the instant case are hereby declared null and void, together with any transfer certificates of title issued in connection with the aforesaid transactions by the Register of Deeds of Quezon City who is likewise ordered to cancel or cause the cancellation of such TCTs;

4. The defendant Register of Deeds of Quezon City is hereby ordered to issue a new transfer certificate of title over the entire parcel of land (915.50 sq. m.) subject of this case in favor of the National Housing Authority by way of satisfying the Supreme Court in G.R. No. 50544 promulgated on [19] May 1984;

5. The NHA is hereby required and authorized to put in place on the property at bar a notice, readable, bold, and stable, sufficiently signifying the essence of this courtís decision so that no person may err as to the real ownership of the instant parcel of land and to fence the same to prevent entry of squatters or other illegal intruders. (Emphasis supplied)

Aggrieved, Sarte, the City Treasurer of Quezon City, and the QCRD appealed the decision to the Court of Appeals.1‚wphi1 The case entitled NHA v. Sarte, the City Treasurer of Quezon City, et al. was docketed as CA-G.R. CV No. 52466.

On the other hand, respondent filed before the Court of Appeals a petition for the annulment of paragraph 3 of the dispositive portion of the judgment that nullified any transfer, assignment, sale or mortgage made by Sarte. His action was anchored on the ground that he, who acquired the property from Sarte, had been adversely affected by the aforequoted decision despite his non-participation in the litigation. The case entitled Evangelista v. The Honorable Judge, Regional Trial Court of Quezon City Branch CIII, National Housing Authority was docketed as CA-G.R. SP No. 41546.

On 11 August 1999, respondent obtained a favorable judgment in CA-G.R. SP No. 41546, to wit:

WHEREFORE, the petition is granted. The assailed part or paragraph No. 3 of the dispositive portion of the decision dated November 29, 1995 of the Regional Trial Court, Br. CIII, Quezon City in Civil Case No. Q-91-10071 is hereby declared void, non-binding and inapplicable in so far as petitionerís [Evangelistaís] TCT No. 122944 is concerned.

Let a copy hereof be furnished the Register of Deeds of Quezon City for the proper annotation. No pronouncement as to costs.10

After its motion for reconsideration was denied by the Court of Appeals, petitioner elevated the case to this Court. The petition entitled National Housing Authority v. Jose Evangelista was docketed as G.R. No. 140945.

On 16 May 2005, the Court denied the petition in this wise:

In this case, it is undisputed that respondent was never made a party to Civil Case No. Q-91-10071. It is basic that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case are not bound by judgment rendered by the court.11 Yet, the assailed paragraph 3 of the trial courtís decision decreed that "(A)ny transfers, assignment, sale or mortgage of whatever nature of the parcel of land subject of this case made by defendant Luisito Sarte or his/her agents or assigns before or during the pendency of the instant case are hereby declared null and void, together with any transfer certificates of title issued in connection with the aforesaid transactions by the Register of Deeds of Quezon City who is likewise ordered to cancel or cause the cancellation of such TCTs." Respondent is adversely affected by such judgment, as he was the subsequent purchaser of the subject property from Sarte, and title was already transferred to him. It will be the height of inequity to allow respondentís title to be nullified without being given the opportunity to present any evidence in support of his ostensible ownership of the property. Much more, it is tantamount to a violation of the constitutional guarantee that no person shall be deprived of property without due process of law.12 Clearly, the trial courtís judgment is void insofar as paragraph 3 of its dispositive portion is concerned.

x x x

WHEREFORE, the petition for review on certiorari is DENIED for lack of merit and the assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. [41546] are hereby AFFIRMED.

Thereafter, on 21 July 2005, the same 29 November 1995 decision of the trial court in Civil Case No. Q-91-10071 subject of Sarteís ordinary appeal in CA-G.R. CV No. 52466 was affirmed in its entirety by the Court of Appeals. The Court of Appeals pronounced:

As could be gleaned from the facts of the case, the City Treasurer of Quezon City was already informed twice of the Supreme Court decision declaring NHA as the owner of the disputed lot x x x.

x x x

It is a truism that a purchaser of property can acquire no more than what the seller can legally transfer because the latter can only sell what he owns or is authorized to sell.

A purchaser of property cannot close his eyes and claim that he acted in good faith under the belief that there was no defect in the vendorís title. A person buying can acquire no more than what the seller can legally transfer, because the latter can only sell what he owns or is authorized to sell.

Applying the foregoing doctrine, the City Treasurer of Quezon [City] can only legally transfer to the buyer Sarte such right he is authorized to sell. And appellant Sarte cannot simply close his eyes by claiming that he acted in good faith under the belief that there was no defect in the authority of the City Treasurer to sell.

x x x

WHEREFORE, the Appeal is DISMISSED. The decision of RTC Branch CIII of Quezon City is hereby AFFIRMED in its entirety.13

The decision became final and executory on 15 August 2005.

Meanwhile, on 12 July 2006, respondent sought the issuance of a writ of execution of the Court of Appealsí 11 August 1999 Decision in CA-G.R. SP No. 41546 entitled Evangelista v. The Honorable Judge, Regional Trial Court of Quezon City Branch CIII, National Housing Authority, which this Court affirmed in the 16 May 2005 Decision in G.R. No. 140945, and which became final and executory on 1 July 2005.

The Court of Appeals granted the motion in its Resolution of 17 July 2007. Thus:

ACCORDINGLY, the motion is GRANTED. Let a writ of execution issue DIRECTING the Register of Deeds of Quezon City to annotate the dispositive part of the Court of Appeals Decision dated August 11, 1999 in the title of petitioner and to cancel Entry No. 7159 annotated on petitionerís TCT No. 122944.14

It also denied the motion for reconsideration filed by petitioner.15

Hence, this instant petition.

Issue

The core issue in this case is whether or not the 21 July 2005 Decision of the Court of Appeals in CA-G.R. CV No. 52466 entitled National Housing Authority v. Luisito Sarte, the City Treasurer of the Quezon City, and the Quezon City Register of Deeds, which affirmed the trial courtís decision in Civil Case No. Q-91-10071 in its entirety thereby awarding the entire parcel of land in favor of petitioner, effectively overturned the Court of Appealsí 11 August 1999 Decision in CA-G.R. SP No. 41546 entitled Evangelista v. The Honorable Judge, Regional Trial Court of Quezon City Branch CIII, National Housing Authority specifically nullifying paragraph 3 of the dispositive portion of the same decision of the trial court (i.e., that any transfer, assignment, sale or mortgage made by Sarte is a nullity) insofar as respondentís TCT No. 122944 is concerned.

Corrolarily, whether or not the Court of Appeals erred in granting respondentís motion for the issuance of writ of execution of the Court of Appealsí 11 August 1999 Decision in CA-G.R. SP No. 41546 entitled Evangelista v. The Honorable Judge, Regional Trial Court of Quezon City Branch CIII, National Housing Authority.

Our Ruling

We deny the petition.

At the outset, it bears emphasis that the Court of Appeals reviewed the same trial courtís decision dated 29 November 1995 in Civil Case No. Q-91-10071 declaring: (1) in CA-G.R. SP No. 41546 (petition for annulment of paragraph 3 of the judgment filed by respondent, who was not impleaded in the case before the trial court) Ė that paragraph 3 of the said judgment of the trial court, which nullified any transfer, assignment, sale or mortgage made by Sarte, is not binding nor applicable insofar as respondentís TCT No. 122944 is concerned; and (2) in CA-G.R. CV No. 52466 (an ordinary appeal filed by Sarte who was the defendant in the case before the court a quo) Ė that the entire parcel of land belongs to petitioner.

Nonetheless, we see no conflict between the two (2) decisions.

The 11 August 1999 decision in CA-G.R. SP No. 41546, as affirmed by this Court on 16 May 2005 in G.R. No. 140945, set aside paragraph 3 of the assailed decision, which nullified any transfer, assignment, sale or mortgage made by Sarte. Such finding of nullity, however, is confined to the transaction between Sarte and respondent, the portion of the land of which was covered by TCT No. 122944, simply because respondent was not given his day in court in Civil Case No. Q-91-10071. Thus:

A person who was not impleaded in the complaint cannot be bound by the decision rendered therein, for no man shall be affected by a proceeding in which he is a stranger.16

In fact, the Court, in so affirming the 11 August 1999 decision in CA-G.R. SP No. 41546 clarified in its Decision of 16 May 2005 in G.R. No. 140945 that:

Lest it be misunderstood, the Court is not declaring that respondent is a purchaser of the property in good faith. This is an issue that cannot be dealt with by the Court in this forum, as the only issue in this case is whether or not the CA erred in annulling paragraph 3 of the trial courtís decision on grounds of lack of jurisdiction and lack of due process of law. Whether or not respondent is a purchaser in good faith is an issue which is a different matter altogether that must be threshed out in a full-blown trial for that purpose in an appropriate case and in the proper forum. Also, CA-G.R. CV No. 52466, which is the appeal from the trial courtís decision in Civil Case No. Q-91-10071, is pending before the CA, and it would be premature and unwarranted for the Court to render any resolution that would unnecessarily interfere with the appellate proceedings.17 (Emphasis supplied)

The case docketed as CA-G.R. CV No. 52466 referred to in CA-G.R. SP No. 41546 has now been terminated with the Court of Appeals, in its 21 July 2005 Decision, affirming the trial courtís decision in Civil Case No. Q-91-10071 in its entirety thereby awarding the entire parcel of land in favor of petitioner.

The fact remains, however, that since CA-G.R. CV No. 52466 is a mere appeal from the trial courtís decision in Civil Case No. Q-91-10071, and that respondent had not been impleaded in that case, such ruling is not binding insofar as respondentís TCT No. 122944 is concerned.

This Court has well-expounded on this matter in G.R. No. 140945, to wit:

Petitioner argues that it should not bear the consequence of the trial courtís denial of its motion to include respondent as defendant in Civil Case No. Q-91-10071. True, it was not petitionerís fault that respondent was not made a party to the case. But likewise, it was not respondentís fault that he was not given the opportunity to present his side of the story. Whatever prompted the trial court to deny petitionerís motion to include respondent as defendant is not for the Court to reason why. Petitioner could have brought the trial courtís denial to the CA on certiorari but it did not. Instead, it filed Civil Case No. Q-95-23940 for Annulment of Deed of Assignment, Deed of Absolute Sale, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639, and Damages, against herein respondent Sarte and others. Unfortunately for petitioner, this was dismissed by the Regional Trial Court of Quezon City (Branch 82) on the ground of litis pendentia. Be that as it may, the undeniable fact remains Ė respondent is not a party to Civil Case No. Q-91-10071, and paragraph 3, or any portion of the trial courtsí judgment for that matter, cannot be binding on him.18 (Emphasis supplied)

Moreover, referring to the last three lines of the aforequoted paragraph, petitionerís argument that the fourth and fifth paragraphs19 of the trial courtís 29 November 1995 decision particularly awarding the entire property in its favor clearly has no leg to stand on. This Court has categorically ruled that any portion of the judgment adverse to the rights of respondent shall not be binding upon him.

Finally, petitioner pointed out that the trial court has already denied respondentís motion for cancellation of Entry No. 7159/T-No. 122944 annotated at the back of TCT No. 122944. Such contention is likewise without merit.

The Order20 dated 31 July 2006 of the Regional Trial Court, Branch 103, Quezon City, indicated the grounds for the denial of the motion, to wit:

1. This court has no jurisdiction to act on said motion considering that the execution of the decision of the Court of Appeals of the movantís Petition for Annulment of Judgment which decision declared null and void the 3rd paragraph of the decision of this court dated November 29, 1995 rests with the Court of Appeals which is the court of origin. Hence, there must be at least an order coming from the Court of Appeals for this court to effect the prayed for cancellation

2. The movant as well as this court were not impleaded as a party in the above-captioned case. In fact, the court is not aware of the alleged decision of the Court of Appeals nullifying the judgment of this court as stated by Mr. Jose Evangelista.

And, it was precisely by virtue of this Order that respondent sought relief from the proper forum.

All considered, we find that the Court of Appeals did not commit any reversible error when it resolved to: (a) grant respondentís Motion for Issuance of Writ of Execution of the Decision dated 11 August 1999; and (b) cause the cancellation of Entry No. 7159 annotated on respondentís TCT No. 122944.

Suffice it to state, by way of reiteration, that this Court is not declaring that respondent has purchased the property in good faith, only that he was not given his day in court to establish his right over the property. The issue of whether or not he was a purchaser in good faith is, therefore, a matter that must be resolved in an appropriate case and in the proper forum.21

WHEREFORE, the petition is DENIED. The Resolutions dated 17 July 2007 and 12 November 2007 both of the Court of Appeals in CA-G.R. SP No. 41546 are hereby AFFIRMED. The Court of Appeals is DIRECTED to CAUSE the implementation of the Writ of Execution it issued on 17 July 2007 directing the Register of Deeds of Quezon City "to annotate the dispositive part of the Court of Appeals Decision dated 11 August 1999 in the title of [Evangelista] and to cancel Entry No. 7159 annotated on [Evangelistaís] TCT No. 122944."

SO ORDERED.

JOSE PORTUGAL PEREZ
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Senior Associate Justice
Chairperson

ARTURO D. BRION
Associate Justice
MARIA LOURDES P. A. SERENO
Associate Justice

BIENVENIDO L. REYES
Associate Justice

C E R T I F I C A T I O N

I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Courtís Division.

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)


Footnotes

1 CA rollo, pp. 206-211. Penned by then Presiding Justice Ruben T. Reyes (now retired Supreme Court Associate Justice), with Associate Justices Regalado E. Maambong and Celia C. Librea-Leagogo, concurring.

2 Id. at 141-152. Penned by then Associate Justice Ruben T. Reyes (now retired Supreme Court Associate Justice), with Associate Justices Jainal D. Rasul and Eloy R. Bello, Jr., concurring.

3 Id. at 230-231. Penned by Associate Justice Regalado E. Maambong with Associate Justices Hakim S. Abdulwahid and Celia C. Librea-Leagogo, concurring.

4 Id. at 212.

5 "WHEREFORE the petition is granted. The assailed part or paragraph No. 3 of the dispositive portion of the decision dated November 29, 1995 of the Regional Trial Court, Br. CIII, Quezon City in Civil Case No. Q-91-10071 is hereby declared void, non-binding and inapplicable in so far as petitionerís TCT No. 122944 is concerned.

Let a copy hereof be furnished the Register of Deeds of Quezon City for the proper annotation. No pronouncement as to costs."

Id. at 151-152.

6 "Entry No. 7159/T-No. 122944: AFFIDAVIT OF ADVERSE CLAIM-

Executed under oath by Manuel V. Fernandez (in behalf of NHA), adverse claimant, claiming among others that NHA has the right of the ownership of the property being the subject of controversy in Civil Case No. Q-91-10071, entitled ĎNational Housing Authority vs. Luisito Sarte, et al.,í now pending before RTC, Br. 103, Q.C. Doc. No. 76, page 16, Bk. I, s. of 1995 of Not. Pub. of Q.C. Belsie Cailipan Sy.

Date of the instrument Ė May 4, 1995

Date of the inscription Ė May 4, 1995."

Id. at 37. TCT No. 122944.

7 "Entry No. 1367/T-No. 122944: NOTICE OF LIS PENDENS -

By virtue of a notice of lis pendens presented and filed by Oscar I. Garcia & Virgilio C. Abejo, notice is hereby given that a case has been pending RTC, Q.C. in Civil Case No. Q-95-23940 entitled ĎNational Housing Authority, plaintiff, -vs.- Luisito Sarte, Jose Evangelista, Northern Star Agri-Business Corporation, BPI Agricultural Development Bank & the Register of Deeds of Quezon City, defendants,í plaintiff praying for Annulment of the Deed of Assignment, Deed of Absolute Sae, Real Estate Mortgage, Cancellation of TCT Nos. 122944 and 126639 & damages.

Date of the Instrument Ė May 24, 1995

Date of the Inscription Ė May 31, 1995"

Id.

8 National Housing Authority v. Evangelista, 497 Phil. 762, 774 (2005).

9 Records, pp. 379-385.

10 CA rollo, pp. 151-152.

11 National Housing Authority v. Evangelista, supra note 8 at 770 citing Heirs of Antonio Pael v. Court of Appeals, 382 Phil. 222, 249.

12 Id. at 771 citing Article III, Section 1, 198[7] Constitution.

13 Rollo, pp. 150-153. Court of Appeals Decision dated 21 July 2005. Penned by Associated Justice Lucenito N. Tagle with Associate Justices Martin S. Villarama, Jr. (now a member of the Court) and Rosmari D. Carandang, concurring.

14 CA rollo, p. 211.

15 Id. at 230-231. Resolution of 12 November 2007.

16 National Housing Authority v. Evangelista, supra note 8 at 764 citing Heirs of Antonio Pael v. Court of Appeals, 382 Phil. 222, 249 (2000); Arcelona v. Court of Appeals, 345 Phil. 250, 270.

17 Id. at 773-774.

18 National Housing Authority v. Evangelista, supra note 8 at 771.

19 "4. The defendant Register of Deeds of Quezon City is hereby ordered to issue a new transfer certificate of title over the entire parcel of land (915.50 sq. m.) subject of this case in favor of the National Housing Authority by way of satisfying the Supreme Court in G.R. No. 50544 promulgated on [19] May 1984;

5. The NHA is hereby required and authorized to put in place on the property at bar a notice, readable, bold, and stable, sufficiently signifying the essence of this courtís decision so that no person may err as to the real ownership of the instant parcel of land and to fence the same to prevent entry of squatters or other illegal intruders."

Records, pp. 384-385.

20 CA rollo, p. 220.

21 National Housing Authority v. Evangelista, supra note 8 at 481.


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