Legal boundaries of ‘assignment’ in sale of foreclosed land
The Supreme Court defined assignment as one involving the transfer or making over to another real or personal property, in possession or in action, or of any estate or right thereto. The assignee is deemed subrogated to the assignor’s obligations and rights. Moreover, he is bound by the same conditions that have governed the assignor.
The assignment, however, does not extend to the issuance of a final certificate of sale (FCS) of foreclosed, unredeemed land sold at public auction, as the Supreme Court has recently held in Legarda v. Clerk of Court of the Regional Trial Court of Muntinlupa City, et al.
In this case, respondent Benjamin Calawagan purchased extrajudicially foreclosed land as the highest bidder at a public auction.
During the period for redeeming this land under the Rules of Court, Calawagan assigned to petitioner Jaime Manuel Legarda all his interests in and rights to, the land, under a deed of assignment. This deed was accordingly annotated on the title to the land.
Despite having informed respondent Clerk of Court of the Regional Trial Court of Muntinlupa City (COC-RTC) of this assignment and the lapse of the redemption period, Legarda was not issued a FCS of the disputed land. COC-RTC denied Legarda’s subsequent request, stating that under the Rules of Court and guidelines on extrajudicial foreclosure proceedings, only the highest bidder, buyer, purchaser, or redemptioner, and not he, in his capacity as an assignee, may be issued a FCS.
This constrained Legarda to file before the RTC a petition for mandamus, alleging that since he had been subrogated to all of Calawagan’s rights and interests over the subject land by virtue of the assignment, it was COC-RTC’s ministerial duty to issue in his favor the FCS.
COC-RTC countered that mandamus did not lie in Legarda’s favor since only the purchaser, and not he, had the legal right to the FCS.
The RTC granted Legarda’s petition. It held that while the Rules of Court only mentioned the purchaser as the one entitled to the conveyance and possession of property in case no redemption was made, it did not reflect that the FCS shall be exclusively issued to him. Moreover, according to the RTC, the assignment entitled Legarda, as the assignee, to exercise Calawagan’s rights over the disputed land as a mere continuation of the latter’s personality.
Upon appeal, the Court of Appeals reversed and set aside the RTC’s decision. It has held that the relevant provision in the Rules of Court does not in any way authorize an assignee to be issued a FCS since it: (a) excludes the term “assignee,” which has been included under the old Rules; and (b) now only, clearly provides that a purchaser or redemptioner may be issued the FCS.
Moreover, a purchaser or redemptioner is different from an assignee, who becomes as such under a contract which validity may be contested. Thus, the COC-RTC may be placed in the position of being required to assess the authenticity of the assignment.
Legarda filed the instant petition appealing the Court of Appeals’ decision, which, however, the Supreme Court denied. At the outset, the Supreme Court held that an assignment involves the transfer of rights, which are intangible personal properties. It also involves the transfer of interests, which are rights in the nature of property less than title.
Thus, in an assignment, the assignee “steps into the shoes” of the assignor insofar as the subject property or rights is concerned.
Nevertheless, the Supreme Court affirmed the Court of Appeals’ finding that the current Rules of Court only provided for the purchaser and last redemptioner as the ones entitled to the conveyance and possession of the subject property if no redemption was made after the sale or if it was redeemed, respectively. The word “assignee” was deleted therefrom, not because it was a mere superfluity, but to give the provision a different construction, which served to limit the issuance of the FCS to the purchaser or last redemptioner.
Relatedly, the Property Registration Decree, which governs foreclosure proceedings, such as in this case, only authorizes that a final deed of sale be issued to the purchaser of the land sold at public auction.
Finally, as an assignee, Legarda is neither privy to the foreclosure sale, unlike the purchaser, nor does he have a lien on the foreclosed land with a prerogative to redeem the same, unlike a redemptioner. He merely steps into Calawagan’s rights and interest as a purchaser through the deed of assignment.
