Case Summary (G.R. No. 141970)
Petitioner
Metropolitan Bank & Trust Company, the annotated mortgagee on TCT No. V-41319, holder of valid real estate mortgage and purchaser at extrajudicial foreclosure.
Respondents
- Hon. Floro T. Alejo, Presiding Judge, RTC Branch 172, Valenzuela City.
- Sy Tan Se, through attorney-in-fact Sian Suat Ngo, plaintiff in the nullity suit.
Key Dates
• Mortgage execution: November 21, 1995, and January 30, 1996.
• Registration of mortgage annotation: November 20, 1995; January 23, 1996.
• Nullity complaint filed: June 3, 1996.
• Extrajudicial foreclosure sale: June 17, 1997; Certificate of Sale: July 15, 1997.
• RTC decision annulling TCT: August 12, 1998.
• Petition for annulment of judgment filed with CA: January 27, 1999.
• CA resolutions denying relief: March 25, 1999, and January 27, 2000.
• Supreme Court decision basis: 1987 Constitution.
Applicable Law
• 1987 Constitution, due process guarantee.
• Revised Rules of Court: Rule 3, Sec. 7 (indispensable parties); Rule 38 (relief from judgment); Rule 47 (annulment for extrinsic fraud).
• Torrens system jurisprudence on certificate finality and annotations.
Procedural History
Sy Tan Se sued to annul TCT V-41319 without impleading Metropolitan Bank, prompting mortgage foreclosure by the bank and issuance of a new title. Upon learning of the RTC’s cancellation, the bank sought annulment of the judgment in the Court of Appeals, which dismissed the petition for lack of proper remedy and form.
Issues
- Whether annulment of judgment under Rule 47 is the proper remedy for extrinsic fraud and lack of party inclusion.
- Whether the RTC’s nullification of the TCT and mortgage annotation, entered without jurisdiction over an indispensable party, must be set aside.
Proper Remedy Analysis
The Supreme Court held that
• Rule 38 relief from judgment was unavailable because the bank was never a party to the nullity suit.
• An action for quieting of title was inappropriate as it does not address the absence of due process in the earlier judgment and cannot modify another court’s decree.
• Intervention was precluded because the bank lacked notice and Sy Tan Se intentionally omitted it, constituting extrinsic fraud.
Annulment under Rule 47 was thus the only effective remedy to protect the bank’s property rights.
Jurisdiction and Indispensable Party Analysis
Torrens jurisprudence and Rules
...continue readingCase Syllabus (G.R. No. 141970)
Case Background and Procedural History
- Petition for Review on Certiorari under Rule 45 assails the March 25, 1999 Court of Appeals Resolution in CA-GR SP No. 50638 and its January 27, 2000 Resolution denying reconsideration.
- The CA dismissed petitioner’s Petition for Annulment of Judgment as insufficient in form and substance and held that petitioner should instead have filed a petition for relief from judgment under Rule 38 or an action for quieting of title.
- Petitioner brought this petition to challenge the CA rulings and to seek nullification of the August 12, 1998 RTC Decision in Civil Case No. 4930-V-96.
Material Facts
- On November 21, 1995 and January 30, 1996, spouses Raul and Cristina Acampado obtained loans of ₱5,000,000 and ₱2,000,000 from petitioner, secured by a Real Estate Mortgage and its Amendment on TCT No. V-41319.
- The mortgage contracts were registered on November 20, 1995 and January 23, 1996 at the Registry of Deeds of Valenzuela City.
- On June 3, 1996, Sy Tan Se filed Civil Case No. 4930-V-96 for declaration of nullity of TCT No. V-41319; petitioner, though the registered mortgagee, was neither impleaded nor notified.
- Following the Acampados’ default, petitioner initiated extrajudicial foreclosure on April 19, 1997; the property was auctioned on June 17, 1997, and a Certificate of Sale was issued in petitioner’s favor on July 15, 1997.
- After the one-year redemption period lapsed on July 28, 1998, petitioner filed an Affidavit of Consolidation of Ownership to secure a new TCT, but learned of the August 12, 1998 RTC Decision nullifying TCT No. V-41319.
- The dispositive portion of the RTC Decision declared TCT No. V-