BIAN STEEL CORPORATION, petitioner, vs. HON.

COURT
OF APPEALS, MYLENE C. GARCIA and MYLA C. GARCIA,
respondents.
[G.R. No. 148430. October 15, 2002.]
MYLENE C. GARCIA and MYLA C. GARCIA, petitioners, vs.
HON. ENRICO A. LANZANAS, Presiding Judge, RTC, Branch 7,
Manila and RUFO J. BERNARDO, Sheriff-In-Charge, for the
Ex-Officio Sheriff of Manila, respondents.
SYNOPSIS
A writ of preliminary attachment was issued by the trial court and a
levy was made by the sheriff on the registered property of the Ng
spouses, pending the outcome of the case filed by Bian Steel
Corporation (BSC) against Joenas Metal Corporation and the Ng
spouses for collection of sum of money. Subsequently, the Ng spouses
sold the property to the Garcias by means of a deed of sale. The
annotation of the preliminary attachment made earlier on the old title
was transferred to the new TCT issued in the name of the Garcias. The
trial court rendered judgment in favor of BSC. The Garcias filed an
action for cancellation of the notice of levy annotated on the new title
before the Regional Trial Court of Quezon City. However, respondent
judge directed the public auction of the attached property. Thereafter,
the Garcias filed another case with the Court of Appeals for the
issuance of a writ of preliminary injunction which sought to perpetually
enjoin respondents judge and sheriff from proceeding with the public
auction. Subsequently, the public auction was held and the property
was awarded to BSC as the highest bidder.
The Supreme Court ruled that BSC has a better right over the subject
property. It is doctrinal that a levy on attachment, duly registered, has
preference over a prior unregistered sale and, even if the prior
unregistered sale is subsequently registered before the sale on
execution but after the levy is made, the validity of the execution sale
should be upheld because it retroacts to the date of levy. The priority
enjoyed by the levy on attachment extends, with full force and effect,
to the buyer at the auction sale conducted by virtue of such levy. The
sale between the spouse Ng and the Garcias was undoubtedly a valid
transaction between them. However, in view of the prior levy on
attachment on the same property, the Garcias took the property
subject to the attachment. The Garcias, in buying the registered land,
stood exactly in the shoes of their vendors, the Ngs, and their title ipso
facto became subject to the incidents or results of the pending
litigation between the Ngs and BSC.
The Court likewise ruled that the Garcias violated the rule against
forum-shopping. The willful attempt by the Garcias to obtain a
preliminary injunction in another court (the Court of Appeals) after
they filed a case seeking the same relief from the original court (the
Quezon City RTC) constitutes grave abuse of the judicial process.
Such contemptuous act is penalized by the summary dismissal of both
actions.
SYLLABUS
1.REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT, A
PROCEEDING IN REM. This Court has always held that attachment is
a proceeding in rem. It is against the particular property, enforceable
against the whole world. The attaching creditor acquires a specific lien
on the attached property which ripens into a judgment against the res
when the order of sale is made. Such a proceeding in effect means
that the property attached is an indebted thing and a virtual
condemnation of it to pay the owner's debt. This doctrine was
validated by this Court in the more recent case of Republic vs.
Saludares: ". . . . The law does not provide the length of time an
attachment lien shall continue after the rendition of the judgment, and
it must therefore necessarily continue until the debt is paid, or sale is
had under execution issued on the judgment, or until the judgment is
satisfied, or the attachment discharged or vacated in some manner
provided by law. Thus, if the property attached is subsequently sold,
the purchaser of the attached property acquires it subject to an
attachment legally and validly levied thereon. . . . ."
2.CIVIL LAW; OBLIGATIONS AND CONTRACTS; SALES; SALES WITH
ASSUMPTION OF MORTGAGE; WHEN PERFECTED. [E]ven if
consensual, not all contracts of sale became automatically and
immediately effective. In Ramos vs. Court of Appeals we held: "In sales
with assumption of mortgage, the assumption of mortgage is a
condition precedent to the seller's consent and therefore, without
approval of the mortgagee, the sale is not perfected."
3.REMEDIAL LAW; PROVISIONAL REMEDIES; ATTACHMENT; LEVY ON
ATTACHMENT, WHEN DULY REGISTERED, HAS PREFERENCE OVER PRIOR
UNREGISTERED SALE; CASE AT BAR. It is doctrinal that a levy on
attachment, duly registered, has preference over a prior unregistered
sale and, even if the prior unregistered sale is subsequently registered
before the sale on execution but after the levy is made, the validity of
the execution sale should be upheld because it retroacts to the date of
levy. The priority enjoyed by the levy on attachment extends, with full
force and effect, to the buyer at the auction sale conducted by virtue
of such levy. The sale between the spouses Ng and the Garcias was
undoubtedly a valid transaction between them. However, in view of the
prior levy on attachment on the same property, the Garcias took the
property subject to the attachment. The Garcias, in buying registered
land, stood exactly in the shoes of their vendors, the Ngs, and their
title ipso facto became subject to the incidents or results of the
pending litigation between the Ngs and BSC.
4.ID.; EVIDENCE; PRESUMPTIONS; PRESUMPTION THAT PURCHASER
HAS EXAMINED EVERY INSTRUMENT ON RECORD AFFECTING TITLE
CANNOT BE OVERCOME BY ANY CLAIM OF INNOCENCE OR GOOD
FAITH. When a conveyance has been properly recorded, such
record is constructive notice of its contents and all interests, legal and
equitable, included therein. Under the rule on notice, it is presumed
that the purchaser has examined every instrument on record affecting
the title. Such presumption is irrefutable and cannot be overcome by
any claim of innocence or good faith. Therefore, such presumption
cannot be defeated by proof of lack of knowledge of what the public
record contains any more than one may be permitted to show that he
was ignorant of the provisions of the law. The rule that all persons
must take notice of the facts which the public record contains is a rule
of law. The rule must be absolute. Any variation would lead to endless
confusion and useless litigation. Otherwise, the very purpose and
object of the law requiring public registration would be for naught. . . .
Because of the principle of constructive notice to the whole world, one
who deals with registered property which is the subject of an
annotated levy on attachment cannot invoke the rights of a purchaser
in good faith. As between two purchasers, the one who registers the
sale in his favor has a preferred right over the other who has not
registered his title even if the latter is in actual possession of the
immovable property. And, as between two purchasers who both
registered the respective sales in their favor, the one who registered his
sale ahead of the other would have better rights than the other who
registered later.
5.ID.; SPECIAL CIVIL ACTIONS; PRELIMINARY INJUNCTION; REQUISITES
FOR ISSUANCE OF WRIT. [T]he Garcias are not entitled to the
issuance of a writ of preliminary injunction from this Court. For the
issuance of the writ to be proper, it must be shown that the invasion of
the right sought to be protected is material and substantial, that the
right of the Garcias is clear and unmistakable and that there is an
urgent and paramount necessity for the writ to prevent serious
damage. Such requirements are all wanting in the case at bar. Thus, in
view of the clear and unmistakable absence of any legal basis for the
issuance thereof, the same must be denied.
6.ID.; ACTIONS; FORUM-SHOPPING; GROUND FOR SUMMARY
DISMISSAL OF COMPLAINTS. [T]he willful attempt by the Garcias to
obtain a preliminary injunction in another court (the Court of Appeals)
after they filed a case seeking the same relief from the original court
(the Quezon City RTC) constitutes grave abuse of the judicial process.
Such contemptuous act is penalized by the summary dismissal of both
actions as mandated by paragraph 17 of the Interim Rules and
Guidelines issued by this Court on January 11, 1983 and Supreme
Court Circular No. 28-91, to wit: ". . . SUBJECT: ADDITIONAL
REQUISITES FOR PETITIONS FILED WITH THE SUPREME COURT AND
THE COURT OF APPEALS TO PREVENT FORUM-SHOPPING OR
MULTIPLE FILING OF PETITIONS AND COMPLAINTS. The attention of
the Court has been called to the filing of multiple petitions and
complaints involving the same issues in the Supreme Court, the Court
of Appeals or different Divisions thereof, or any other tribunal or
agency, with the result that said tribunals or agency have to resolve the
same issues. . . . . 3. Penalties. (a) Any violation of this Circular shall
be a cause for the summary dismissal of the multiple petition or
complaint; . . . ." . . . The rule against forum-shopping has been
further strengthened by the issuance of Supreme Court Administrative
Circular No. 04-94. Said circular formally established the rule that the
deliberate filing of multiple complaints to obtain favorable action
constitutes forum-shopping and shall be a ground for summary
dismissal thereof. HCEaDI
D E C I S I O N
Before us are two consolidated petitions: (1) G.R. No. 142013, a special
civil action for certiorari and mandamus seeking to annul and set
aside the Resolutions 1 of the Court of Appeals dated October 21,
1999 and January 31, 2000, denying petitioner Bian Steel
Corporation's motion for intervention and motion for reconsideration,
and (2) G.R. No. 148430, seeking to set aside the decision 2 and
resolution of the Court of Appeals dated February 10, 2000 and May
31, 2001, respectively, dismissing the petition of petitioners Mylene C.
Garcia and Myla C. Garcia for violating the rules on forum-shopping.
Stripped of the non-essentials, the facts of the case are as follows:
On July 22, 1998, Bian Steel Corporation (BSC) filed with the Regional
Trial Court of Manila a complaint against Joenas Metal Corporation
and spouses Ng Ley Huat and Leticia Dy Ng (the spouses Ng) for
collection of a sum of money with damages, docketed as Civil Case
No. 98-89831.
On July 24, 1998, the trial court 3 issued a Writ of Preliminary
Attachment after BSC filed an attachment bond. Pursuant thereto, on
July 27, 1998, the sheriff of Branch 7 of the RTC of Manila, Manuelito
P. Viloria, levied on the property registered in the names of the
spouses Ng and covered by TCT No. 11387 of the Registry of Deeds of
Quezon City. This property under preliminary attachment was in fact
mortgaged to the Far East Bank and Trust Company (FEBTC), now
Bank of the Philippine Islands (BPI), and consisted of a 268-square-
meter lot located at 14 Tulip Road, Gardenville Town and Country
Homes, Congressional Avenue, Project 8, Quezon City.
On August 5, 1998, a sheriff's return was filed by Viloria, stating that,
as of that date, summons was not served upon the defendant spouses
Ng because they could not be located. BSC caused the filing of a
motion to serve the summons by publication which was granted.
Summons by publication thereafter ensued.
In the meantime, defendant-spouses Ng sold the property to
petitioners (in G.R. No. 148430) Mylene and Myla Garcia by means of a
deed of sale dated June 29, 1998. Said transaction was registered
only about a month-and-a-half later, on August 12, 1998, after the
mortgagee FEBTC gave its approval to the sale. On August 19, 1998,
TCT No. 11387 in the name of the spouses Ng was cancelled and, in
lieu thereof, TCT No. 194226 in the names of Mylene and Myla Garcia
was issued. The annotation of the preliminary attachment made earlier
on July 27, 1998 by sheriff Viloria on the old title, TCT No. 11387, was
transferred to TCT No. 194226.
On August 28, 1998, the Garcias filed a complaint-in-intervention in
Civil Case No. 98-89831 pending at Branch 7 of the Manila RTC,
alleging that they were the registered owners of the property covered
by TCT No. 194226 which was the subject of BSC's writ of preliminary
attachment. Said complaint-in-intervention was denied by the trial
court for lack of merit.
On April 14, 1999, the trial court rendered judgment by default in favor
of BSC, the dispositive portion of which was:
WHEREFORE, decision is hereby rendered in favor of plaintiff
Bian Steel Corporation, and against defendants Joenas
Metal Corporation, Ng Ley Huat and Leticia Dy Ng, ordering
the latter to jointly and severally:
1.pay the plaintiff the amount of FIVE MILLION EIGHT
HUNDRED FIFTY SIX THOUSAND PESOS (P5,856,000.00) as
actual damages;
2.pay the plaintiff the amount of ONE MILLION PESOS
(P1,000,000.00) as and for consequential damages;
3.pay the plaintiff the amount equivalent to 25% of the total
amount due the plaintiff from the defendant as and for
attorney's fees; and
4.to pay the costs of suit.
SO ORDERED. 4
On June 14, 1999, a Notice of Sale of Execution on Real Property was
issued by respondent sheriff Rufo J. Bernardo. It scheduled the public
auction of the property on July 7, 1999.
Meanwhile, on February 18, 1999, in view of the dismissal of their
complaint-in-intervention, the Garcias filed an action against BSC,
sheriff Manuelito P. Viloria, the Register of Deeds of Quezon City and
FEBTC (now BPI) for cancellation of the notice of levy annotated on
TCT No. 194226 before Branch 98 of the Regional Trial Court of
Quezon City, 5 docketed as Civil Case No. 99-36804. The Garcias
claimed that they were the registered owners of the property in dispute,
having acquired the same on June 29, 1998 by means of a deed of
sale with assumption of mortgage from spouses Ng Ley Huat and
Leticia Dy Ng.
In said case in the Quezon City RTC, the Garcias were able to secure a
temporary restraining order enjoining sheriff Rufo J. Bernardo or any
person acting in his behalf from continuing with the public auction sale
of the subject property initially scheduled on July 7, 1999. This TRO
was disregarded by the Manila RTC.
Acting on the ex-parte manifestation with motion to proceed with the
execution sale filed by BSC, Judge Enrico Lanzanas of Branch 7, RTC,
Manila affirmed, on July 8, 1999, his previous order and directed the
public auction of the attached property, unless otherwise enjoined by
the Court of Appeals or this Court. Thereafter, the public auction was
rescheduled from July 7, 1999 to August 6, 1999.
On August 4, 1999, the Garcias filed another case with the Court of
Appeals for the issuance of a writ of preliminary injunction with prayer
for temporary restraining order which sought to perpetually enjoin
Judge Lanzanas and sheriff Bernardo from proceeding with the public
auction on August 6, 1999. Their petition did not implead BSC as
private respondent. DHcEAa
In a resolution dated August 5, 1999, the Third Division
of the Court of Appeals 6 temporarily restrained public
respondents Judge Lanzanas and Bernardo from proceeding with
the public auction of the subject property. Hence, the scheduled
public sale on August 6, 1999 did not transpire. This prompted
petitioner BSC to file a motion for intervention on August 16,
1999, praying that it be allowed to intervene and be heard in the
case as private respondent, and to comment and oppose the
petition filed by the Garcias. Likewise, said motion sought to
oppose the prayer for preliminary injunction with urgent request
for the issuance of the temporary restraining order.
On October 21, 1999, the First Division of the Court of Appeals, in its
resolution, 7 denied BSC's motion for intervention on the ground that
its rights could be protected in a separate proceeding, particularly in
the cancellation case filed by the Garcias. BSC's motion for
reconsideration was likewise denied on January 31, 2000. Thus, on
March 13, 2000, BSC filed with this Court a special civil action for
certiorari and mandamus, docketed as G.R. No. 142013, seeking to
annul and set aside the Resolutions of the Court of Appeals dated
October 21, 1999 and January 31, 2000. BSC is invoking the following
issues:
I. THE RESPONDENT HONORABLE COURT OF APPEALS
COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT
TO LACK OR EXCESS OF JURISDICTION IN DENYING
PETITIONER'S MOTION FOR INTERVENTION FOR BEING
IMPROPER AS INTERVENOR'S RIGHTS MAY BE PROTECTED IN
A SEPARATE PROCEEDING IN CIVIL CASE NO. 99-36804 OF
THE RTC, BRANCH 98, QUEZON CITY, FOR CANCELLATION
OF THE NOTICE OF LEVY ANNOTATED ON TCT NO. 194226.
II. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION IN HOLDING THAT TO ENTERTAIN
PETITIONER'S INTERVENTION WOULD NECESSARY (SIC) PRE-
EMPT THE ADJUDICATION OF ISSUES IN CIVIL CASE NO. 99-
36804 BECAUSE EVIDENCE AND COUNTER-EVIDENCE WILL
BE PRODUCED BY THE PARTIES IN THE INJUNCTION SUIT,
AND THIS WILL UNDULY DELAY OR PREJUDICE THE
ADJUDICATION OF THE RIGHTS OF THE PRINCIPAL PARTIES.
III. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK OR
EXCESS OF JURISDICTION IN RULING THAT THE ALLOWANCE
OR DISALLOWANCE OF A MOTION TO INTERVENE IS
ADDRESSED TO THE SOUND DISCRETION OF THE COURT,
OVERLOOKING THE FACT THAT IN THE INSTANT CASE, THE
APPELLATE COURT DID NOT EXERCISE WISELY ITS SOUND
DISCRETION WHEN IT DENIED PETITIONER'S MOTION FOR
INTERVENTION.
Similarly, the Fifteenth Division of the Court of Appeals, in its decision
8 dated February 10, 2000, dismissed the petition of the Garcias for
violating the rules on forum-shopping. It denied their motion for
reconsideration on May 31, 2001.
The Garcias thus filed with this Court a petition for review on certiorari,
docketed as G.R. No. 148430, seeking to set aside the February 10,
2000 decision of the Court of Appeals as well as its resolution dated
May 31, 2001 denying their motion for reconsideration, raising the
following errors:
I. WHETHER OR NOT PETITIONERS WERE GUILTY OF
VIOLATING THE RULES ON FORUM-SHOPPING.
II. WHETHER OR NOT PETITIONERS ARE ENTITLED TO THE
ISSUANCE OF A WRIT OF INJUNCTION.
Subsequently, G.R. No. 142013 and G.R. No. 148430 were
consolidated pursuant to this Court's Resolution dated February 27,
2002.
In the meantime, on August 4, 2001, the Garcias were again served by
the sheriff of the Manila RTC with a notice of sale of execution of the
disputed property scheduled for August 7, 2001. Because no TRO was
issued by this Court, the public auction ordered by the Manila RTC was
held as scheduled and the property was awarded to BSC as the highest
bidder.
On August 15, 2001, a little too late, this Court 9 issued the TRO
sought by the Garcias in a resolution which partially stated that:
Acting on the Petitioners' Urgent Motion for the Issuance of a
temporary restraining order and/or writ of preliminary
injunction dated August 6, 2001, praying that public
respondents be enjoined from proceeding with the conduct
of the public auction sale involving Petitioners' property,
registered under TCT No. 194226 of the Registry of Deeds of
Quezon City, the Court Resolved to ISSUE the TEMPORARY
RESTRAINING ORDER prayed for, effective immediately until
further orders from this Court. 10
A year after the public auction, on August 6, 2002, the Garcias, fearful
of the impending consolidation of title in favor of BSC, filed before this
Court an urgent ex parte motion for the issuance of an order
maintaining the status quo ante. They wanted to prevent the
consolidation of the title and possession by BSC until such time as the
rights and interests of both sets of petitioners in the two cases before
us shall have been determined and finally resolved.
Acting on the said motion, on August 9, 2002, the Court 11 resolved to
grant the motion and directed the parties to maintain the status quo
as of August 6, 2002. cHCIDE
Going over the merits of the petitions, the Court deems it essential to
resolve two pivotal issues: (1) who, between BSC and the Garcias, has
a better right to the disputed property, and (2) whether the Garcias
violated the rule against forum-shopping.

It should be noted that, at the time of the attachment of the property
on July 27, 1998, the spouses Ng were still the registered owners of
said property. It should also be observed that the preliminary
attachment in favor of petitioner BSC was annotated and recorded in
the Registry of Deeds of Quezon City on July 27, 1998 in accordance
with the provisions of the Property Registration Decree (PD 1529). This
annotation produced all the effects which the law gives to its
registration or inscription. 12
This Court has always held that attachment is a proceeding in rem. It is
against the particular property, enforceable against the whole world.
The attaching creditor acquires a specific lien on the attached
property which ripens into a judgment against the res when the order
of sale is made. Such a proceeding in effect means that the property
attached is an indebted thing and a virtual condemnation of it to pay
the owner's debt. 13 This doctrine was validated by this Court in the
more recent case of Republic vs. Saludares: 14
xxx xxx xxx.
The law does not provide the length of time an attachment
lien shall continue after the rendition of the judgment, and it
must therefore necessarily continue until the debt is paid, or
sale is had under execution issued on the judgment, or until
the judgment is satisfied, or the attachment discharged or
vacated in some manner provided by law. Thus, if the
property attached is subsequently sold, the purchaser of the
attached property acquires it subject to an attachment
legally and validly levied thereon.
xxx xxx xxx.
In the instant case, the records reveal that the levy on attachment
covering the subject property was annotated on TCT No. 11387 on
July 27, 1998. The deed of sale executed on June 29, 1998 in favor of
the Garcias was approved by FEBTC only on August 12, 1998 which
was also the date when the sale was registered. From the foregoing, it
can be seen that, when the Garcias purchased the property in question,
it was already under a duly registered preliminary attachment. In other
words, there was already notice to said purchasers (and the whole
world) of the impending acquisition by BSC, as the judgment creditor,
of a legal lien on the title of the Ng spouses as judgment debtors in
case BSC won its case in the Manila RTC.
The Garcias claim they acquired the subject property by means of a
deed of sale with assumption of mortgage dated June 29, 1998,
meaning, they purchased the property ahead of the inscription of the
levy on attachment thereon on July 27, 1998. But, even if consensual,
not all contracts of sale become automatically and immediately
effective. 15 In Ramos vs. Court of Appeals 16 we held:
In sales with assumption of mortgage, the
assumption of mortgage is a condition
precedent to the seller's consent and therefore,
without approval of the mortgagee, the sale is
not perfected.
Apart therefrom, notwithstanding the approval of the sale by
mortgagee FEBTC (BPI), there was yet another step the Garcias had
to take and it was the registration of the sale from the Ngs to them.
Insofar as third persons are concerned, what validly transfers or
conveys a person's interest in real property is the registration of the
deed. 17
Thus, when the Garcias bought the property on June 29, 1998, it was,
at that point, no more than a private transaction between them and the
Ngs. It needed to be registered before it could become binding on all
third parties, including BSC. It turned out that the Garcias registered it
only on August 12, 1998, after FEBTC (now BPI) approved the sale. It
was too late by then because, on July 27, 1998, the levy in favor of
BSC, pursuant to the preliminary attachment ordered by the Manila
RTC, had already been annotated on the original title on file with the
Registry of Deeds. This registration of levy (or notice, in layman's
language) now became binding on the whole world, including the
Garcias. The rights which had already accrued in favor of BSC by
virtue of the levy on attachment over the property were never
adversely affected by the unregistered transfer from the spouses Ng to
the Garcias.
We sympathize with the Garcias but, had they only bothered to check
first with the Register of Deeds of Quezon City before buying the
property as a prudent buyer would have done they would have
seen the warning about BSC's superior rights over it. This alone
should have been sufficient reason for them to back out of the deal.
It is doctrinal that a levy on attachment, duly registered, has preference
over a prior unregistered sale and, even if the prior unregistered sale is
subsequently registered before the sale on execution but after the levy
is made, the validity of the execution sale should be upheld because it
retroacts to the date of levy. The priority enjoyed by the levy on
attachment extends, with full force and effect, to the buyer at the
auction sale conducted by virtue of such levy. 18 The sale between
the spouses Ng and the Garcias was undoubtedly a valid transaction
between them. However, in view of the prior levy on attachment on the
same property, the Garcias took the property subject to the
attachment. The Garcias, in buying registered land, stood exactly in
the shoes of their vendors, the Ngs, and their title ipso facto became
subject to the incidents or results of the pending litigation 19 between
the Ngs and BSC.
Even the alleged lack of actual and personal knowledge of the
existence of the levy on attachment over the subject property by the
Garcias cannot be sustained by this Court on the ground that one who
deals with registered land is charged with notice of the burdens on the
property which are duly noted on the certificate of title. On this
specific point, we are concerned not with actual or personal
knowledge but constructive notice through registration in the Registry
of Deeds. Otherwise stated, what we should follow is the annotation
(or lack thereof) on the original title on file with the Registry of Deeds,
not on the duplicate title in the hands of the private parties. ESCDHA
When a conveyance has been properly recorded, such record is
constructive notice of its contents and all interests, legal and
equitable, included therein. Under the rule on notice, it is presumed
that the purchaser has examined every instrument on record affecting
the title. Such presumption is irrefutable and cannot be overcome by
any claim of innocence or good faith. Therefore, such presumption
cannot be defeated by proof of lack of knowledge of what the public
record contains any more than one may be permitted to show that he
was ignorant of the provisions of the law. The rule that all persons
must take notice of the facts which the public record contains is a rule
of law. The rule must be absolute. Any variation would lead to endless
confusion and useless litigation. 20 Otherwise, the very purpose and
object of the law requiring public registration would be for naught.
Pertinent to the matter at hand is Article 1544 of the New Civil Code
which provides:
If the same thing should have been sold to
different vendees, . . . should it be immovable
property, the ownership shall belong to the
person acquiring it who in good faith first
recorded it in the Registry of Property. . . .
Because of the principle of constructive notice to the whole world, one
who deals with registered property which is the subject of an
annotated levy on attachment cannot invoke the rights of a purchaser
in good faith. As between two purchasers, the one who registers the
sale in his favor has a preferred right over the other who has not
registered his title even if the latter is in actual possession of the
immovable property. 21 And, as between two purchasers who both
registered the respective sales in their favor, the one who registered his
sale ahead of the other would have better rights than the other who
registered later.
Applying said provision of the law and settled jurisprudence to the
instant case, when the disputed property was consequently sold on
execution to BSC, this auction sale retroacted to the date of
inscription of BSC's notice of attachment on July 27, 1998. The earlier
registration thus gave BSC superior and preferential rights over the
attached property as against the Garcias who registered their purchase
of the property at a later date. 22 Notably, the Garcias were not
purchasers for value in view of the fact that they acquired the property
in payment of the loan earlier obtained from them by the Spouses Ng.
23
All told, the purchaser of a property subject to an attachment legally
and validly levied thereon is merely subrogated to the rights of the
vendor and acquires the property subject to the rights of the
attachment creditor. An attaching creditor who registers the order of
attachment and the sale by public auction of the property to him as
the highest bidder acquires a superior title to the property as against a
vendee who previously bought the same property from the registered
owner but failed to register his deed of sale. 24
Petitioners Garcias failed to show that BSC acted in bad faith which
would have impelled this Court to rule otherwise.
The foregoing considerations show that the Garcias are not entitled to
the issuance of a writ of preliminary injunction from this Court. For the
issuance of the writ to be proper, it must be shown that the invasion of
the right sought to be protected is material and substantial, that the
right of the Garcias is clear and unmistakable and that there is an
urgent and paramount necessity for the writ to prevent serious
damage. 25 Such requirements are all wanting in the case at bar.
Thus, in view of the clear and unmistakable absence of any legal basis
for the issuance thereof, the same must be denied. cTECIA
On the second question whether the Garcias violated the rule
against forum-shopping we answer in the affirmative.
The Court of Appeals, in dismissing the Garcias' petition on the ground
of forum-shopping, explained:
A party is guilty of forum-shopping where he repetitively
availed of several judicial remedies in different courts,
simultaneously or successively, all substantially founded on
the same transactions and the same essential facts and
circumstances, and all raising substantially the same issues
either pending in, or already resolved adversely by some
other court (Gatmaytan vs. Court of Appeals, 267 SCRA
487).
The test to determine whether a party violated the rule
against forum-shopping is where the elements of litis
pendentia are present or where a final judgment in one case
will amount to res judicata in another (Solid Homes, Inc. vs.
Court of Appeals, 271 SCRA 157).
What is truly important to consider in determining whether
forum-shopping exists or not is the vexation caused the
courts and parties-litigants by a party who asks different
courts and/or administrative agencies to rule on the same
or related causes and/or grant the same or substantially the
same reliefs, in the process creating possibility of conflicting
decisions being rendered by the different fora upon the
same issues (Golangco vs. Court of Appeals, 283 SCRA 493).
The above jurisprudence instructs us the various indicia of
forum-shopping. The more important of these are: when the
final judgment in one case will amount to res judicata in
another, or where the cases filed are substantially founded
on the same transactions and the same essential facts and
circumstances, or raising substantially the same issues, or
more importantly, where there exists the possibility of
conflicting decisions being rendered by different fora upon
the same issues.
If we take a look closely on the instant Petition for Injunction,
forum-shopping is evident. In Civil Case No. 99-36804
raffled to Branch 98 of RTC-Quezon City, petitioners therein
prayed for the cancellation of the notice of levy in their title.
They are claiming that the controverted property is owned by
them such that the respondent therein has no right to levy on
their property, petitioners not being the respondent's debtor.
In the present petition, petitioners seek that the scheduled
auction sale of the same property be perpetually enjoined,
claiming that the property is owned by them and that the
same is erroneously made to answer for liability not owing
by them. Ultimately, the two actions involve the same
essential facts and circumstances, and are raising the same
issues. CTHDcE
. . . The propriety of the issuance of injunction would
depend on the finding that the petitioners have a clear legal
right over the property a right in esse or the existence of
a right to be protected. Thus, this court must make a
categorical finding of fact. This very same issue of fact
who as between the two contending parties have a better
right to the property is the very issue presented before
the RTC of Quezon City. Clearly therefore, this Court and that
of RTC-Quezon City are called upon to decide on the same
issues based on the same essential facts and circumstances.
Hence, the possibility of these two courts rendering or
coming up with different or conflicting decisions is very much
real. Needless to say, the decision in one case would
constitute res judicata in the other. The instant petition for
injunction obviously violates the rule on forum-shopping.
We agree with the Court of Appeals.
As clearly demonstrated, the willful attempt by the Garcias to obtain a
preliminary injunction in another court (the Court of Appeals) after
they filed a case seeking the same relief from the original court (the
Quezon City RTC) constitutes grave abuse of the judicial process.
Such contemptuous act is penalized by the summary dismissal of both
actions as mandated by paragraph 17 of the Interim Rules and
Guidelines issued by this Court on January 11, 1983 and Supreme
Court Circular No. 28-91, to wit:
xxx xxx xxx
SUBJECT: ADDITIONAL REQUISITES FOR PETITIONS FILED
WITH THE SUPREME COURT AND THE COURT OF APPEALS
TO PREVENT FORUM-SHOPPING OR MULTIPLE FILING OF
PETITIONS AND COMPLAINTS.
The attention of the Court has been called to the filing of
multiple petitions and complaints involving the same issues
in the Supreme Court, the Court of Appeals or different
Divisions thereof, or any other tribunal or agency, with the
result that said tribunals or agency have to resolve the same
issues.
xxx xxx xxx.
3.Penalties.
(a)Any violation of this Circular shall be a cause for the
summary dismissal of the multiple petition or complaint;
xxx xxx xxx.
In Bugnay Construction & Development Corporation vs. Laron, 26 we
declared:
Forum-shopping, an act of malpractice, is
proscribed and condemned as trifling with the
courts and abusing their processes. It is
improper conduct that degrades the
administration of justice. The rule has been
formalized in Paragraph 17 of the Interim Rules
and Guidelines issued by this Court of January
11, 1983, in connection with the implementation
of the Judiciary Reorganization Act . . . . The
Rule ordains that (a) violation of the rule shall
constitute a contempt of court and shall be a
cause for the summary dismissal of both
petitions, without prejudice to the taking of
appropriate action against the counsel or party
concerned.
The rule against forum-shopping has been further strengthened by the
issuance of Supreme Court Administrative Circular No. 04-94. Said
circular formally established the rule that the deliberate filing of
multiple complaints to obtain favorable action constitutes forum-
shopping and shall be a ground for summary dismissal thereof.
Accordingly, the Garcias cannot pursue simultaneous remedies in two
different fora. This is a practice which degrades the judicial process,
messes up the orderly rules of procedure and is vexatious and unfair to
the other party in the case.
We rule therefore that the execution sale in favor of BSC was superior
to the sale of the same property by the Ngs to the Garcias on August
12, 1998. The right of petitioner BSC to the ownership and possession
of the property, the surrender of the owner's duplicate copy of TCT No.
194226 covering the subject property for inscription of the certificate
of sale, the cancellation of TCT No. 194226 and the issuance of a new
title in favor of BSC, is affirmed without prejudice to the right of the
Garcias to seek reimbursement from the spouses Ng.
In view of our disposition of the first issue resulting in the denial of the
Garcias' petition, the petition of BSC praying that it be allowed to
intervene therein has been rendered moot. The Court thus finds it
unnecessary to discuss it.
WHEREFORE, the petitions are DENIED. The Resolution dated August 9,
2002 issued by this Court directing the parties to maintain the status
quo as of August 6, 2002 is hereby lifted and set aside. The Registry
of Deeds of Quezon City is hereby ordered to cancel TCT No. 194226
in the names of Myla and Mylene Garcia and issue a new title in favor
of BSC without further delay. DCcSHE
SO ORDERED.