Facts:

The case involves a conflict over property ownership regarding a condominium unit located at Makati Prime Citadel Condominium, specifically Unit 3301, which is covered by Condominium Certificate of Title No. 25156 (CCT No. 25156). On March 20, 1995, a Contract to Sell was executed between Primetown Property Group, Inc. (PPGI) and Reynaldo Poblete and Tomas Villanueva, who later transferred their rights to the respondent, Michael J. OaPallick, via a Deed of Assignment. Consequently, by October 1995, after paying the purchase price, PPGI issued a Deed of Sale in favor of OaPallick; however, this deed was never registered. In a parallel action, petitioner Teresa C. Aguilar obtained a favorable decision against PPGI from the Housing and Land Use Regulatory Board (HLURB), which led to the levy of several PPGI properties, including the condominium unit in question. This levy culminated in a public auction on March 30, 2000, during which Aguilar was declared the highest bidder and subs

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Facts:

Background and Pre-Auction Transactions

• On March 20, 1995, a Contract to Sell was executed between Primetown Property Group, Inc. (PPGI) and Reynaldo Poblete and Tomas Villanueva over Unit 3301 of the Makati Prime Citadel Condominium, covered by Condominium Certificate of Title (CCT) No. 25156.
• Poblete and Villanueva assigned their interest to Michael J. OaPallick through a Deed of Assignment.
• In October 1995, PPGI executed a Deed of Sale in favor of OaPallick after full payment was made; however, the Deed of Sale was never registered or annotated on CCT No. 25156.

Initiation of the HLURB Case and Subsequent Auction

• In a separate case involving PPGI and petitioner Teresa C. Aguilar (filed before the Housing and Land Use Regulatory Board or HLURB), Aguilar obtained a final and executory decision in her favor.
• Sheriff Cesar D. Raagas of the RTC Makati City levied several properties of PPGI, including the subject unit, and scheduled a public auction sale for March 30, 2000.
• On February 17, 2000, a Sheriff’s Notice of Sale was issued, posted, served, and published accordingly.
• On March 21, 2000, prior to the auction, OaPallick filed an Affidavit of Third-Party Claim regarding his interest in the unit.
• Despite OaPallick’s filing, the auction proceeded on March 30, 2000, and Aguilar was declared the highest bidder, with a certificate of sale subsequently issued in her favor.
• After PPGI failed to redeem the property, a final Deed of Sale was issued on April 20, 2001, leading to the cancellation of CCT No. 25156 and the issuance of CCT No. 74777 in Aguilar’s name.
• Aguilar further moved for and was granted a Writ of Possession dated December 21, 2001 by the HLURB.

OaPallick’s Separate Litigation and Procedural History

• On April 6, 2001, OaPallick instituted Civil Case No. 01-572 before the RTC Makati seeking to quiet title, annul the levy and sale, and recover the condominium unit.
• In his complaint, OaPallick claimed that when PPGI executed the unregistered Deed of Sale in his favor, all rights to the unit were transferred to him, and that the subsequent auction sale that effected Aguilar’s title prejudiced his interests by creating a cloud on title.
• Petitioners (including PPGI, Aguilar, Sheriff Raagas, and the Register of Deeds for Makati City) filed a Motion to Dismiss on the ground that:
• The trial court lacked jurisdiction over the property dispute, given that the matter was within the exclusive jurisdiction of the HLURB.
• The unregistered Deed of Sale of OaPallick could not bind or prejudice third parties, including Aguilar.
• Despite the filed oppositions and a Motion for a Preliminary Hearing on the Affirmative Defenses, the trial court eventually dismissed the case on December 8, 2003, on the basis that it had no power to annul the levy and execution sale ordered by the HLURB.

Appellate Proceedings Leading to the CA Decision

• OaPallick's Motion for Reconsideration was denied by the RTC, prompting him to file an appeal with the Court of Appeals (CA).
• In CA-G.R. CV No. 83027, the CA held that because OaPallick was not a party to the HLURB proceedings between Aguilar and PPGI, he could not be bound by their disposition.
• The CA reiterated that OaPallick’s third-party claim necessitated an independent action (vindicatory suit) to determine his interest, as the execution sale proceeded notwithstanding his claim.
• The CA further relied on precedents such as The Consolidated Bank & Trust Corporation (Solidbank) v. Court of Appeals and Spouses Estonina v. Court of Appeals to support the proposition that a separate action was permissible when the plaintiff is a stranger to the original proceedings.
• Consequently, the CA overturned the RTC’s dismissal order and remanded the case to the RTC Makati for trial on its merits.

Subsequent Developments and Arguments of the Parties

• Petitioners contended that Aguilar’s title had been previously determined in G.R. No. 157801, which established her as the absolute owner, and that the registration of her CCT was valid.
• Petitioners also argued that since PPGI remained the registered owner at the time of the HLURB proceedings, there was no irregularity in the conduct of the levy or the auction sale, and thus no need for remand.
• Conversely, OaPallick argued that he suffered prejudice from not being impleaded in the HLURB case and that his claim to quiet title should be heard independently, asserting that Aguilar obtained her title through unlawful means.
• The respondent further raised procedural lapses in the Petition for Review, including the lack of an affidavit of proof of service and certification against non-forum shopping.

Issue:

Whether or not OaPallick, not being a party to the HLURB proceedings between Aguilar and PPGI, can be adversely affected by the outcome of those proceedings.

• Does the principle of due process protect a person from being prejudiced by a ruling in a case in which he was not a party?
• Should OaPallick be compelled to file a separate vindicatory action to protect his rights?

Whether the execution sale and subsequent registration of Aguilar’s title were irregular or vitiated by procedural or substantive defects.

• Was there an illegal levy on the subject property that could affect the determination of title?
• Does the unregistered Deed of Sale executed in favor of OaPallick have any legal effect on third parties, including Aguilar?

Whether the CA’s application of existing jurisprudence regarding third-party claims in execution sales (as seen in Solidbank and Spouses Estonina) is correct.

• Can the doctrine allowing an independent proceeding for quieting title be extended to OaPallick’s claim?
• Does the designation of a case by the parties (quieting of title versus annulment of title) control the cause of action inherent in the complaint?

• Whether the petition should be denied on procedural grounds or if substantive issues warrant a remand to the RTC for full consideration on the merits.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)