Certificate of Sale and Real Estate Mortgage

It is a well-established rule that before a Certificate of Sale may be admitted for registration, the mortgage that was foreclosed must first be registered. (LRA Consulta No. 3125)

In Consulta No. 1308, this Authority ruled:

" The Sheriff's Certificate of Sale is likewise not registrable it appearing that the same refers to a mortgage which has not yet been registered. This Commission (now Land Registration Authority) believes that to be registrable, the mortgage that was foreclosed must be registered. The legality of the auction sale conducted by the sheriff has nothing to do with the registrability of the Certificate of Sale. Legality should not be confused with registrability. There are instruments which are perfectly legal and yet, for reasons independent of their legality, unregistrable."

" x x x while a mortgage creates a real right and directly immediately subjects the property upon which it is imposed, whoever the possessor maybe, to the fulfillment of the obligation for whose security it was constituted (Article 2126, Civil Code), for registration purposes, however, it is necessary that the mortgage lien be annotated on the certificate of title where the sheriff's certificate of sale is sought to be recorded to serve as basis for the registration of said certifcate of sale ." (Consulta No. 1828) (Cited in LRA Consulta No. 2958 dated February 7, 2000)

Notice of Levy

It was held in Cosmopolitan Bank and Trust Corp. vs. CA, 193SCRA 158 ,that " the well-settled doctrine is that proper levy is indispensable to a valid sale on execution. A sale unless preceded by a levy is void (46 Phil 258). Therefore, since there was no sufficient levy of the execution in question the private respondent did not take any title to the properties sold thereunder. Apparently, Reynaldo Angsuco, the highest bidder in the auction sale, to whom the certificate of sale was issued did not take any title to the properties sold thereof. He cannot, therefore, register the right of ownership over the subject property which he did not acquire from the start.

Furthermore, this Authority ruled in Consulta No.946, that: "Thus, aside from the fact that Act 3344 and Act 496 are two entirely  different systems  of registration, the registration under the former of the notice of levy, being without force and effect cannot be the basis for the registration of the Sheriff Certificate of Sale. x x x levy on real property not duly recorded in the registry is not valid and is not an encumbrance, then the property can not be sold at public auction to enforce an encumbrance" (LRC Consulta No. 171, Register of Deeds of Quezon City) (Consulta No. 3097 dated January 10, 2001)