Victory for the unit owner

Auggie is the registered owner of Condominium Unit No. 708. Inscribed on his title is a a Notice of Assessment, which states:

Entry No. 96-2466/CCT No. 111 -NOTICE OF ASSESSMENT – xxx xxx xxx tating among other things that the condominium unit, described herein has an outstanding dues with the BACD in the sum of P775,786.17, inclusive of interests, penalties and attorney’s fees, which aforementioned liabilities constitute as first lien against this condominium unit pursuant to the Master Deed of Restrictions. (xxx xxx xxx) xxx.

The Condominium Association filed with the RTC, through the Office of the Clerk of Court & Ex-Oficio Sheriff, a Petition for extrajudicial foreclosure of the condominium unit of respondent, alleging,among others, that Auggie is a member thereof but has unpaid association dues xxx; and that the latter refused to pay his dues despite demand. Attached to the petition is the pertinent Statement of Account and a demand letter issued to respondent.

Acting on the recommendation of the The Clerk of Court, as Ex-Oficio Sheriff, the RTC Executive Judge dismissed the petition that under the facts given, no mortgage exists between the Association and Auggie. Evidently, it is not one of those contemplated under Act 3135 as amended by Act 4118. The allegation simply does not show a mortgagor-mortgagee relationship since respondent liability arises from his failure to pay dues, assessments and charges due to the Association.

Q: Can the decision of the RTC Presiding Judge be appealed to the Supreme Court via a Petition for Review on Certiorari pursuant to Rule 45 of the Rules of Court?

A: No, only a judgment, final order or resolution rendered by a court in the exercise of its judicial functions relative to an actual controversy is subject to an appeal to the SC by way of a Petition for Review on Certiorari under Rule 45 of the ROC. The Order dismissing the petition for extrajudicial foreclosure and the denial of the motion for reconsideration were issued by the RTC Executive Judge in the exercise of his administrative function to supervise the ministerial duty of the Clerk of Court as Ex-Oficio Sheriff in the conduct of an extrajudicial foreclosure sale; hence, said orders are not appealable under Rule 45. Rather, the correct mode of appeal is by petition for mandamus under Section 3, Rule 65 of the Rules of Court.

Q: Can the Supreme Court treat the Rule 45 petition as a petition for mandamus?

A: Yes. Although an erroneous appeal may be dismissed outright, the Supreme Court may not exercise such option; but instead, may treat the appeal as a petition for mandamus to obviate further litigation between the parties.

Q: Was the Condominium Association able to establish a clear right to the extrajudicial foreclosure sale of the condominium unit of respondent?

A: No. Under Circular No. 7-2002, implementing Supreme Court Administrative Matter No. 99-10-05-0, it is mandatory that a petition for extrajudicial foreclosure be supported by evidence that petitioner holds a special power or authority to foreclose. Without proof of petitioner’s special authority to foreclose, the Clerk of Court as Ex-Oficio Sheriff is precluded from acting on the application for extrajudicial foreclosure.

Here, the only basis of petitioner for causing the extrajudicial foreclosure of the condominium unit of respondent is a notice of assessment annotated on the condominium certificate titlein accordance with Section 20 of R.A. No. 4726. However, neither the annotation nor law vests it with sufficient authority to foreclose on the property.

The notice of assessment contains no provision for the extrajudicial foreclosure of the condominium unit. All that it states is that the assessment of petitioner against respondent for unpaid association dues constitutes a “first lien against [the] condominium unit.”

Neither does Section 20 of R.A. No. 4726 grant petitioner special authority to foreclose. While the law also grants petitioner the option to enforce said lien through either the judicial or extrajudicial foreclosure sale of the condominium unit, Section 20 does not by itself, ipso facto, authorize judicial as extra-judicial foreclosure of the condominium unit.

Petitioner may avail itself of either option only in the manner provided for by the governing law and rules. (Source: First Marbella Condominiooum Association, Inc. vs. Gatmaytan, G.R. No. 163196, July 4, 2008)

The author is Dean of College of Law at Lyceum of the Philippines University; Trustee of Philippine Association of Law Schools; and founder of Mawis Law Office