Title
Titan Dragon Properties Corp. vs. Veloso-Galenzoga
Case
G.R. No. 246088
Decision Date
Apr 28, 2021
A land dispute involves a property sale, unpaid taxes, failed summons, and invalid court rulings, remanded for proper proceedings after Supreme Court intervention.

Case Summary (G.R. No. 107382)

Factual Background and Procedural History

The petitioner corporation allegedly sold the subject property to respondent through an absolute deed of sale in 1997 for ₱60 million, where petitioner undertook to pay capital gains tax (CGT) and documentary stamp tax (DST), and respondent agreed to pay transfer tax and registration fees. Respondent claimed possession of the property since 1997 and had been paying real property taxes. Petitioner corporation, however, did not deliver possession nor pay the CGT and DST. After repeated demands failed, respondent filed a complaint for specific performance in April 2015 to compel petitioner corporation to perform its obligations.

Two weeks later, respondent filed a mandamus petition to annul two derivative TCTs issued after the cancellation of original TCT No. 185260 by the Register of Deeds (RD), asserting fraud and seeking the reinstatement of the original title and annotation of the deed of sale. Both cases had distinct proceedings before different branches of the RTC.

Service of Summons and Initial Trial Court Proceedings

Service of summons in the specific performance case was attempted at the petitioner corporation’s registered address at the 6th Floor of PBCom Building, Makati, but the sheriff’s attempts failed, as the petitioner no longer occupied that office. Respondent then filed a motion for substituted service by publication, which the RTC Branch 95 granted. The petitioner corporation failed to appear, leading to a default judgment ordering payment of CGT and DST and delivery of possession to respondent.

In the mandamus case, service of summons was allegedly effected by personal delivery to a front desk representative who refused to sign, but the court declared summons valid and rendered a decision ordering cancellation of the derivative titles, reinstatement of the original TCT, annotation of the deed of sale, and issuance of a new title to respondent. This decision was set aside on reconsideration for invalid summons and lack of due process.

Subsequent Proceedings and Conflicting Decisions

Petitioner corporation contested the specific performance judgment on grounds of lack of valid summons service, and that the mandamus decision expanded reliefs beyond those prayed for by respondent—specifically ordering title transactions which only the Register of Deeds could perform. The RTC Branch 95 allowed the omnibus motion to annotate the deed of sale and issue a new title post-judgment, leading to confusion and further litigation with the Register of Deeds and Land Registration Authority (LRA), which affirmed the authenticity of the original title but also noted the subdivision and issuance of derivative titles.

Respondent moved to dismiss the mandamus case alleging forum shopping, which the RTC Branch 76 granted with prejudice, a decision affirmed by the Court of Appeals (CA). Petitioner corporation then filed a petition for certiorari against the specific performance decision and the writ of execution issued thereon, alleging grave abuse of discretion by the trial court judge in allowing summons by publication despite lack of diligent efforts and in issuing a writ of execution that exceeded the judgment's terms.

Issues Presented

  1. The propriety of resorting to a special civil action for certiorari under Rule 65 instead of annulment of judgment under Rule 47 to question the judgment.
  2. The validity of the service of summons by publication on petitioner corporation.
  3. The propriety of the expansion of the writ of execution beyond the decision's dispositive portion.

The Supreme Court's Analysis on Void Judgment and Remedies

The Court emphasized the nature of a void judgment—that it is a nullity devoid of legal effect and cannot divest or create rights. Such a judgment may be challenged directly via a petition for annulment under Rule 47 (for lack of jurisdiction) or by certiorari under Rule 65 (for grave abuse of discretion amounting to excess or lack of jurisdiction). The mere lack of valid service of summons results in absence of jurisdiction over the person and grounds for annulment of judgment, but this does not preclude recourse to certiorari where grave abuse of discretion is also alleged, such as issuance of reliefs beyond pleadings.

The Court noted that petitioner corporation’s challenge encompassed both lack of jurisdiction (due to invalid summons) and grave abuse of discretion (due to the trial court’s issuance of the writ of execution with expanded relief), thus rendering Rule 65 a suitable mode of relief. It rejected the CA majority's view that annulment alone was the proper remedy, emphasizing a holistic approach to procedural remedies to serve substantial justice.

Invalidity of Service of Summons by Publication

The Court held that the service of summons by publication was invalid because respondent failed to comply with the mandatory requirements under Section 14, Rule 14 of the Rules of Court: there was no affidavit supporting the motion for publication, nor was there diligent inquiry by the sheriff to ascertain petitioner corporation’s whereabouts after unsuccessful personal service attempts. Only two attempts at personal service were made, both at a single address where petitioner corporation no longer maintained an office.

Furthermore, the sheriff made no substituted service attempts nor inquiries into petitioner corporation’s alternate addresses despite availability of information in the latter's General Information Sheets (GIS). Respondent also failed to provide alternative addresses after personal service failed. Given these facts, the presumption of regularity in service was rebutted by the defective sheriff’s return. Therefore, the trial court lacked jurisdiction over petitioner corporation.

Void Proceedings and Scope of the Writ of Execution

Since the trial court lacked jurisdiction due to invalid service, all proceedings and the October 21, 2016 decision are void. The writ of execution issued on April 24, 2017, was likewise void and manifestly erroneous because it went beyond the judgment’s dispositive portion. The specific performance suit involved ordering petitioner corporation to pay CGT and DST and to deliver possession; the writ additionally ordered the cancellation and reinstatement of titles and issuance of new titles in respondent’s name—matters not prayed for nor adjudicated.

This expansion constitutes grave abuse of discretion and violates due process under the 1987 Constitution, which prohibits deprivation of property without due process of law. A writ of execution must conform to the judgment’s terms; otherwise, it lacks validity. The trial court judge acted arbitrarily and despotic in issuing the writ.

Manifest Grave Abuse of Discretion and Denial of Due Process

The Court found that the trial court committed grave abuse of discretion both in granting service of summons by publication without diligent inquiry and in issuing the default judgment that stripped petitioner corporation of its substantive rights to property and possession. The default judgment deprived petitioner corporation of its day in court and denied it due process in a case involving a multi-hectare prime real estate. Default judgments are disfavored as they prevent resolution on merits.

The cancellation of petitioner corporation's derivative

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