G.R. No. 166536 - FLOR MARTINEZ, REPRESENTED BY MACARIO MARTINEZ, AUTHORIZED REPRESENTATIVE AND ATTORNEY-IN-FACT, VS. ERNESTO G. GARCIA AND EDILBERTO M. BRUA.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, PREMISES CONSIDERED, the instant complaint is hereby dismissed for lack of merit and judgment is hereby rendered in favor of defendants Flor Martinez and Pilipinas Bank as against plaintiffs Ernesto Garcia and Edilberto Brua who are further directed to pay both defendants attorney's fees in the amount of P50,000.00 each. Accordingly, the judicial inscriptions particularly, Entry No. 3706/T-346026, annotation of certificate of sale and Entry No. 72854/T-346026 are held to be valid, subsisting liens which do not constitute a cloud on Transfer Certificate of Title No. 5204. [16] In so ruling, the RTC found that the adverse claim which respondent Garcia caused to be annotated on the previous title of the subject property, i.e, TCT No. 346026, on June 23, 1980 was predicated on his interest as a mortgagee of a loan of PI 50,000.00, which he extended to respondent Brua; that respondent Garcia's adverse interest was merely that of a second mortgagee, as he was not yet the purchaser of the subject property as of said date; that when the judicial liens, i.e. , Notice of Levy on Attachment and/or Levy and Notice of Levy on Execution, were caused to be registered by petitioner on respondent Brua's title on January 8, 1981 and July 8, 1998, respectively, by virtue of petitioner being adjudged judgment creditor by Branch 60 of RTC Makati, respondent Garcia's claim became inferior to that of petitioner. The RTC said that respondent Garcia's inaction to preserve his adverse claim as a second mortgagee, which was inscribed on June 23, 1980, and his sudden decision to redeem and purchase the subject property from the GSIS in October 1991 -- when petitioner's Notice of Levy on Attachment and/or Levy, Notice of Levy on Execution and Certificate of Sale were already inscribed at the back of respondent Brua's title -- showed bad faith on the part of respondent Garcia; that respondent Brua did not even testify or participate in the case, except when he was impleaded as a plaintiff in the case. The RTC did not give credit to respondent Garcia's claim that he and respondent Brua had no prior knowledge of the occurrence of a public auction and the consequent annotation of the certificate of sale, and found respondent: Garcia to be a buyer in bad faith of the subject property. The RTC also ruled that the Notice of Levy on Execution, which was annotated on December 8, 1981 as Entry No. 72854 on respondent Brua's title arising from Civil'Case No. 7262 entitled "Pilipinas Bank v. Edilberto Brua" was a valid levy on the subject property in favor of Pilipinas Bank. The levy could not be canceled, as this would impair the interest of the bank which had been decided upon by a co-equal court. The RTC found that the sale between respondents appeared to be tainted with bad faith, which constrained petitioner and Pilipinas Bank from engaging the services of lawyers; thus, the award of attorney's fees in the latter's favor. Respondents' motion for reconsideration was denie