FIRST DIVISION
G.R. No. 210286, July 23, 2018
WELBIT CONSTRUCTION CORP., WACK WACK CONDOMINIUM CORP., AND SPOUSES EUGENIO JUAN GONZALEZ AND MATILDE GONZALEZ, Petitioners, v. HEIRS OF CRESENCIANO C. DE CASTRO, Respondents.
D E C I S I O N
TIJAM, J.:
This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court, assailing the Decision2 dated September 30, 2013 and Resolution3 dated December 4, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 93366.
WHEREFORE, judgement is hereby rendered as follows:
(a) Dismissing as it is hereby DISMISSED the instant petition for lack of merit; and,
(b) Dismissing as it is hereby DISMISSED the counterclaims of the [petitioners].
SO ORDERED.15
WHEREFORE, the appeal is GRANTED. The assailed RTC Decision dated March 31, 2009 is REVERSED and SET ASIDE. Accordingly, the petition in SEC Case No. MC-01-002 is GRANTED. The extra-judicial foreclosure of Condominium Unit No. 802 is SET ASIDE for being null and void. With costs.Hence, this petition.
SO ORDERED.21
Sec. 20. The assessment upon any condominium made in accordance with a duly registered declaration of restrictions shall be an obligation of the owner thereof at the time the assessment is made. The amount of any such assessment plus any other charges thereon, such as interest, costs (including attorney's fees) and penalties, as such may be provided for in the declaration of restrictions, shall be and become a lien upon the condominium to be registered with the Register of Deeds of the city or province where such condominium project is located. The notice shall state the amount of such assessment and such other charges thereon as may be authorized by the declaration of restrictions, a description of condominium unit against which same has been assessed, and the name of the registered owner thereof. Such notice shall be signed by an authorized representative of the management body or as otherwise provided in the declaration of restrictions. Upon payment of said assessment and charges or other satisfaction thereof, the management body shall cause to be registered a release of the lien.Indeed, it does not grant the petitioners the authority to foreclose. The aforecited provision clearly provides that the rules on extra-judicial foreclosure of mortgage or real property should be followed. Accordingly, Section 124 of Act No. 3135,25 which prescribes for the procedure for the extra-judicial foreclosure of real properties subject to real estate mortgage, in relation to Circular No. 7-2002 and SC A.M. No. 99-10-05-0 requires that the petition for extra-judicial foreclosure be supported by evidence that petitioners hold a special power or authority to foreclose, thus:
Such lien shall be superior to all other liens registered subsequent to the registration of said notice of assessment except real property tax liens and except that the declaration of restrictions may provide for the subordination thereof to any other liens and encumbrances, such liens may be enforced in the same manner provided for by law for the judicial or extra-judicial foreclosure of mortgage or real property. Unless otherwise provided for in the declaration of the restrictions, the management body shall have power to bid at foreclosure sale. The condominium owner shall have the right of redemption as in cases of judicial or extra-judicial foreclosure of mortgages.23 (Emphasis in the original)
Sec. 1. All applications for extra-judicial foreclosure of mortgage, whether under the direction of the Sheriff or a notary public pursuant to Art. No. 3135, as amended, and Act 1508, as amended, shall be filed with the Executive Judge, through the Clerk of Court, who is also the Ex-Officio Sheriff (A.M. No. 99-10-05-0, as amended, March 1, 2001).In First Marbella, the Court held that "[w]ithout proof of petitioner's special authority to foreclose, the Clerk of Court as Ex-Officio Sheriff is precluded from acting on the application for extra-judicial foreclosure."27
Sec. 2. Upon receipt of the application, the Clerk of Court shall:
a. Examine the same to ensure that the special power of attorney authorizing the extra-judicial foreclosure of the real property is either inserted into or attached to the deed of real estate mortgage (Act No. 3135, Sec. 1, as amended) x x x.26
Thus, Section 1 of the Article V of the By-laws of the Condominium Corporation authorizes the board to assess the unit owner penalties and expenses for maintenance and repairs necessary to protect the common areas or any portion of the building or safeguard the value and attractiveness of the condominium. Under Section 5 of Article [V] of the By-Laws, in the event a member defaults in the payment of any assessment duly levied in accordance with the Master Deed and the By-Laws, the Board of Directors may enforce collection thereof by any of the remedies provided by the Condominium Act and other pertinent laws, such as foreclosure. x x x.Clearly, petitioners were authorized to institute the foreclosure proceeding to enforce the lien upon the condominium unit. Moreover, this conclusion finds support in the 1984 condominium corporation's Board Resolution No. 84-007,32 also signed by De Castro as a member of the Board of Directors at that time, stating that:
x x x x
The Master Deed with Declaration of Restrictions of the Condominium Project is annotated on the Condominium Certificate of title 2826. The Master Deed and By-Laws constitute as the contract between the unit owner and the condominium corporation. As a unit owner, [De Castro] is bound by the rules and restrictions embodied in the said Master Deed and by-Laws pursuant to the provisions of the Condominium Act. Under the Condominium Act (Section 20 of RA 4726) and the by-laws (Section 5 of Article [V]) of the Wack Wack, the assessments upon a condominium constitute a lien on such condominium and may be enforced by judicial or extra-judicial foreclosure.31 (Emphasis ours)
RESOLVED to, as we do hereby authorize our President, Arch. Eugenio Juan Gonzalez and/or the law offices of Siguion Reyna, Montecillo and Ongsiako and/or whomsoever Arch. Gonzalez may appoint or designate, to effect foreclosure of Condominium Apartment Units at Wack Wack Apartment Building Condominium Project, Mandaluyong, Metro Manila with unpaid or delinquent accounts to satisfy the unit's obligation to Wack Wack Condominium Corporation;Furthermore, in the similar case of Wack Wack Condominium Corp. v. Court of Appeals,33 involving petitioners and another unit owner, wherein the petitioners likewise extra-judicially foreclosed a condominium unit to enforce assessments albeit the issue therein was the jurisdiction of the SEC, this Court had already ruled that the Condominium Act and the By-Laws of the condominium corporation recognize and authorize assessments upon a condominium unit to constitute a lien on such unit which may be enforced by judicial or extra-judicial foreclosure. Clearly, petitioners' authority to foreclose a condominium unit to enforce assessments, pursuant to the Condominium Act and the condominium corporation's Master Deed and By-Laws, had long been established.
RESOLVED FURTHER TO, as we do hereby designate and appoint Arch. Eugenio Juan Gonzalez as the Wack Wack Condominium Corporation's attorney-in-fact for the purpose of foreclosure;
RESOLVED FINALLY TO, as we do hereby authorize the abovenamed Architect Eugenio Juan Gonzalez to execute, sign, and deliver documents and whatever papers necessary, and in general, to do and perform all such acts and things that are or may be necessary to give effect to the foregoing authority.
Endnotes:
* Designated as Acting Chairperson per Special Order No. 2559 dated May 11, 2018.
** Designated as Acting Member per Special Order No. 2560 dated May 11, 2018.
1Rollo, pp. 11-55.
2 Penned by Associate Justice Normandie B. Pizarro, concurred in by Associate Justices Remedios A. Salazar-Fernando and Manuel M. Barrios; id. at 64-78.
3 Id. at 61-62.
4 Id. at 14.
5 Id. at 65.
6 Id. at 80-82.
7 Id. at 65-66.
8 Id. at 66.
9 Id.
10 Id. at 67.
11 Id. at 67-68.
12 Id. at 68.
13 Rendered by Acting Presiding Judge Edwin D. Sorongon; id. at 183-190.
14 AN ACT TO DEFINE CONDOMINIUM, ESTABLISH REQUIREMENTS FOR ITS CREATION, AND GOVERN ITS INCIDENTS. Approved on June 18, 1966.
15 Id. at 190.
16 Id. at 64-78.
17 579 Phil. 432 (2008).
18 Guidelines for the Enforcement of the Supreme Court Resolution of December 14, 1999 in Administrative Matter No. 99-10-05-0, as Amended by the Resolutions dated January 30, 2001 and August 7, 2001; effective April 22, 2002.
19 Re: Procedure in Extra-Judicial or Judicial Foreclosure of Real Estate Mortgage; effective January 15, 2000.
20Rollo, pp. 76-77.
21 Id. at 77.
22 Supra note 17.
23 Id. at 441.
24 Section 1. When a sale is made under a special power inserted in or attached to any real-estate mortgage hereafter made as security for the payment of money or the fulfillment of any other obligation, the provisions of the following election shall govern as to the manner in which the sale and redemption shall be effected, whether or not provision for the same is made in the power.
25 AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL ESTATE MORTGAGES. Approved on March 6, 1924.
26Rollo, p. 75.
27First Marbella Condominium Ass'n., Inc. v. Gatmaytan, supra note 17, at 440.
28 Id.
29Rollo, 103-123.
30 Id. at 84-102.
31 Id. at 189-190.
32 Id. at 148.
33 290 Phil. 357 (1992).