Bian Steels Corp. v. Court of Appeals | GR No.

142013 and 148430

FACTS: A case was filed by Bian Steels Corp. against Joenas Metal Corp. and Spouses Ng for collection of sum of
money with damages. Pursuant to the complaint the Trial Court filed for Writ of Preliminary Attachment after the BSC
filed an attachment bond. The sheriff levied on the property registered under Spouses Ng. The property a 268 sq. parcel
of lot was in fact mortgaged under BPI. The spouses could not be found hence a summons by publication was granted.
In the meantime, the Spouses Ng sold the property to Mylene and Myla Garcia by means of a deed of sale. Said
transaction was then registered after one and a half month of the said transaction. The sale was also approved by BPI.
When said lot was registered, the TCT was changed from 11387 to 194226. The preliminary attachment was then
changed, too, by the sheriff.
When said complaint reached to Garcia, they filed a complaint-in-intervention alleging that they were registered owners
of the property but said complaint was denied for lack of merit.
The trial court then rendered a judgment by default in favor of BSC against Joenas Metal Corp. and Spouses Ng. A
Notice of Sale of Execution on Real Property was issued for public auction. And again, the Garcia filed a complaint-inintervention alleging that they are the registered owner of the property having acquired by a deed of sale with assumption
of mortgage from Sps. Ng. The public auction was rescheduled. Also, on the latter part, no public auction was transpired.
This led to the BSC to filed a motion for intervention but it was denied including its motion for reconsideration.
Similarly, the 15th division of the CA dismissed the petition of Garcias for violation the rules on forum shopping. Thus, a
public auction was pursued and BSC was the highest bidder. Thus, Garcias are now are fighting for a better right to the
property alleging that even though the attachment, pursuant to the judgment by the court, was made ahead of the sale
between them and Sps. Ng, there was already a consensual sale prior to the judgment on the Writ of Attachment.
ISSUE: Whether the perfection of the contract of Sale by means of consent, which is prior to the judgment favoring to the
BSCs Writ of Attachment, between Garcia and Spouses Ng imposes a better right to the property.
RULING: No; Even if consensual, not all contracts of sale became automatically and immediately effective. In Ramos vs.
Court of Appeals the Court held that, In sales with assumption of mortgage, the assumption of mortgage is a condition
precedent to the sellers consent and therefore, without approval of the mortgagee, the sale is not perfected.
Apart therefrom, notwithstanding the approval of the sale by mortgagee 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.
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 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 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.