G.R. No. 186271, 23 February 2011

FACTS:

Mrs. Moreno is the registered owner of a penthouse unit and two parking slots in Chateau de Baie Condominium (Chateau Condominium) in Roxas Boulevard, Manila. ). As a registered owner in Chateau Condominium, Mrs. Moreno is a member/stockholder of the condominium corporation. Mrs. Moreno obtained a loan of ₱16,600,000.00 from Oscar Salvacion, and she mortgaged the Moreno properties as security; the mortgage was annotated on the CCTs.

Subsequently, to enforce its lien, the president of the petitioner wrote the Clerk of Court/Ex-Officio Sheriff of Parañaque City for the extrajudicial public auction sale of the Moreno properties. To stop the extrajudicial sale, Salvacion, as mortgagee, filed a petition petition sought to prohibit the scheduled extrajudicial sale for lack of a special power to sell from the registered and to declare the lien to be excessive. RTC dismissed Salvacion’s petition and the extrajudicial sale proceeded as scheduled and the Moreno properties were sold to the petitioner, the lone bidder. Salvacion appealed

While the Salvacion case was pending before the CA, the Moreno spouses filed before the RTC, Parañaque City, a complaint for intra-corporate dispute against the petitioner to question how it calculated the dues assessed against them, and to ask an accounting of the association dues.

ISSUE:

Whether the court erred in not dismissing the Moreno Spouses complaint despite the full completion of the extrajudicial sale.

RULING:

The petition lacks merit. The court did not err when it did not dismiss the Moreno spouses’ complaint despite the full completion of the extrajudicial sale.

Although the extrajudicial sale of the Moreno properties to the petitioner has been fully effected and the Salvacion petition has been dismissed with finality, the completion of the sale does not bar the Moreno spouses from questioning the amount of the unpaid dues that gave rise to the foreclosure and to the subsequent sale of their properties. The propriety and legality of the sale of the condominium unit and the parking spaces questioned by Salvacion are different from the propriety and legality of the unpaid assessment dues that the Moreno spouses are questioning in the present case.

Just because the property has already been sold extrajudicially does not mean that the questioned assessments have now become legal and valid or that they have become immaterial. In fact, the validity of the foreclosure depends on the legality of the assessments and the issue must be determined by the SEC if only to insure that the private respondent was not deprived of her property without having been heard. If there were no valid assessments, then there was no lien on the property, and if there was no lien, what was there to foreclose? Thus, SEC Case No. 2675 has not become moot and academic and the SEC retains its jurisdiction to hear and decide the case despite the extrajudicial sale.

Wherefore, we affirm the decision of the CA’s First Division dismissing the petitioner’s petition. The way is now clear for the RTC to continue its proceedings on the Moreno case.

*Case Digest by April Rose B. Tuanda, JD-IV, Andres Bonifacio Law School, S.Y 2019-2020