Case Digest (G.R. No. 165412)
Facts:
In Inocencio Y. Lucasan for himself and as the Judicial Administrator of the Intestate Estate of the Late Julianita Sorbito Lucasan v. Philippine Deposit Insurance Corporation (PDIC), petitioner Lucasan and his co-maker obtained a ₱5,000 loan from Pacific Banking Corporation (PBC) on August 3, 1972. When they defaulted, PBC sued before the Regional Trial Court (RTC) of Bacolod City in Civil Case No. 12188 and on April 30, 1979 secured a judgment ordering joint and several payment of ₱7,199.99 plus 14% yearly interest from February 7, 1979. Upon non‐payment, the sheriff levied on Lucasan’s Lot Nos. 1500-A and 229-E (TCT Nos. T-68115, T-13816) by Notice of Embargo on January 8, 1981 (Entry No. 110107) and sold the parcels at public auction on May 13, 1981, awarding them to PBC. A Certificate of Sale was registered on June 5, 1981 (Entry No. 112552). Neither the prior mortgagees—Philippine National Bank and Republic Planters Bank—nor Lucasan redeemed within the one-year period, vesCase Digest (G.R. No. 165412)
Facts:
- Loan Transaction and Foreclosure
- In August 1972, Pacific Banking Corporation (PBC) extended a ₱5,000 loan to Inocencio Y. Lucasan, with co-maker Carlos Benares.
- Lucasan and Benares defaulted; RTC rendered judgment on April 30, 1979 ordering them to pay ₱7,199.99 with 14% interest from February 7, 1979.
- Writ of execution issued; on January 8, 1981, a notice of embargo was annotated on TCT Nos. T-68115 and T-13816. Mortgages in favor of PNB and RPB were noted as prior encumbrances.
- On May 13, 1981, the lots were sold at public auction and awarded to PBC; certificate of sale registered June 5, 1981 (Entry No. 112552). Redemption period expired June 5, 1982; no redemption or consolidation petition filed.
- Post-Foreclosure Developments
- In January 1997, Lucasan offered to pay PBC’s claim and sought cancellation of the certificate of sale. He paid off PNB and RPB mortgages and secured their releases.
- On August 13, 2001, PDIC (as PBC’s receiver) denied cancellation request, advising reacquisition only by bidding at minimum ₱2,900,300.00.
- Trial Court Proceedings
- Lucasan filed a declaratory relief/quieting-of-title petition (RTC Civil Case No. 02-11874), seeking cancellation of embargo and sale annotations under Section 75, PD 1529 and Rule 63, Sec. 1.
- PDIC moved to dismiss for lack of cause of action, contending annotations were valid execution sale instruments and petition sought a repurchase at undervalue. Lucasan opposed.
- RTC and CA Dispositions
- RTC Branch 43 granted PDIC’s motion on July 24, 2003, holding Lucasan lacked both title interest and invalid cloud to maintain quieting-of-title action. Motion for reconsideration denied October 20, 2003.
- On appeal (CA-G.R. CV No. 81518), the Court of Appeals affirmed on March 23, 2006, ruling Lucasan’s redemption period lapsed, vesting absolute ownership in PBC/PDIC. Motion for reconsideration denied February 7, 2007.
- Supreme Court Petition
- Lucasan filed a petition for review alleging disregard of Section 75, PD 1529 and misapplication of Cometa v. Court of Appeals and related jurisprudence.
- PDIC opposed; SC resolved key issue as whether dismissal of Lucasan’s quieting-of-title complaint was proper.
Issues:
- Whether Lucasan had cause of action for quieting of title given his failure to redeem within the statutory period.
- Whether the notice of embargo and certificate of sale annotations are invalid clouds capable of removal under Rule 63, Sec. 1 and Art. 476, 477 of the Civil Code.
- Whether Section 75, PD 1529 or Cometa v. Court of Appeals supports Lucasan’s petition to cancel the sale annotations long after expiration of the redemption period.
- Whether PDIC acted capriciously or arbitrarily in conditioning reacquisition on bidding at the appraised value.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)