05 PNB v.

CFI Rizal
GR. No. 63201 (1992)
J. Medialdea / Tita K

Subject Matter: Rule 13

Case Summary: Private respondents filed a motion to cancel the annotations on its certificates of title covering 3 parcels of land
owned by them. The annotations pertain to: 1) the assignment by PBM to PNB of the former's leasehold rights, 2) improvements
built on the said property, and 3) the real estate mortgages made by PBM in favor of PNB. CFI ordered the cancellation of the
inscriptions on respondents' certificates of title. Petitioner’s MR was denied. Private respondents then moved for the entry of final
judgment and issuance of a writ of execution which was also granted by the CFI. Petitioners then filed an omnibus motion to set
aside the entry of judgment on the ground that it had no prior notice or knowledge of the order of respondent court denying its MR,
and that it did not receive registry notices of mail containing such the CFI decision. CFI denied the omnibus motion. WON CFI acted
capriciously or arbitrarily when it ordered entry of judgment and cancellation of the certificate annotations despite petitioner’s lack
of knowledge, the SC ruled in the negative. The SC gave weight to CFI’s factual finding that the postmaster's certification stated that
three (3) notices of the registered mail which contained the order denying petitioner’s motion for reconsideration, were sent to
petitioner PNB's counsel. The presumption regularity of the postmaster’s performance of his official duty to send notices of
registered was not overcome.

Doctrine/s:
Service by registered mail is complete upon actual receipt by the addressee but if he fails to claim his mail from the post office
within five (5) days from the date of first notice of the postmaster, service shall take effect at the expiration of such time.

The postmaster has the official duty to send notices of registered mail and the presumption is that official duty was regularly
performed.

Action Before SC: “This is a petition for Certiorari under Rule 65 of the Rules of Court”
Parties:
Petitioner PHILIPPINE NATIONAL BANK

THE COURT OF FIRST INSTANCE OF RIZAL, PASIG— BRANCH XXI,

PRESIDED BY JUDGE GREGORIO G. PINEDA, CHUNG SIONG PEK @ BONIFACIO CHUNG SIONG
Respondent PEK AND VICTORIA CHING GENG TY @ VICTORIA CHENG GENG TY, AND
THE REGISTER OF DEEDS OF RIZAL, PASIG, METRO MANILA AND/OR HIS DEPUTIES AND
AGENTS

Antecedent Facts:
1. Private respondents are the registered owners of three parcels of land in Pasig covered by certificate of titles.
2. Private respondents leased the parcels of land to Philippine Blooming Mills, Co., Inc., (PBM) which PBM intend to use for its
factory site.
3. The lease was duly annotated at the back of the certificates of title. (ANNOTATION #1)
4. The terms of the contract of lease are as follows:
 Term of the lease is for twenty years beginning from the date of the contract and "is extendable for another term
of twenty years at the option of the LESSEE.
 That the lessee agrees to "use the property as factory site and for that purpose to construct whatever buildings or
improvements may be necessary or convenient and/or x x x for any purpose it may deem fit;
 and before the termination of the lease to remove all such buildings and improvements.
5. In accordance with the contract, PBM introduced on the land, buildings, machineries and other useful improvements. These
constructions and improvements were annotated at the back of the respondents' certificates of title. (ANNOTATION #2)
6. PBM executed in favor of petitioner PNB a deed of assignment, conveying and transferring all its rights and interests under
the contract of lease, in consideration of the loans granted by PNB to PBM.
7. PBM also executed in favor of PNB a real estate mortgage for a loan of P100,000.00 and an addendum REM for another
loan of P1,590,000.00, covering all the improvements constructed by PBM on the leased premises. These mortgages were
registered and annotated at the back of respondents' certificates. (ANNOTATION #3)
 8. The lease contract expired without being renewed.
CFI
1. Private respondents filed a motion to cancel the annotations on respondents' certificates of title pertaining to the
assignment by PBM to PNB of the former's leasehold rights, inclusion of improvements and the real estate mortgages made
by PBM in favor of PNB. Private respondents alleged that:
 the contract of lease entered into between PBM and private respondents had already expired;
 PBM and/or its assignee failed to exercise the option to renew the second 20-year lease commencing on and also
by the failure of PBM to extend its corporate existence in accordance with law
2. CFI issued an order directing the cancellation of the inscriptions on respondents' certificates of title.
3. PNB filed a MR, which the CFI denied.
4. Private respondents filed a motion for entry of final judgment and issuance of a writ of execution of the order directing the
cancellation of the inscriptions on the certificates of title.
5. CFI granted the said motion for entry of final judgment and ordered the Register of Deeds Pasig to cancel the entries on
respondents' certificates of title.
6. PNB then filed an omnibus motion to set aside the entry of judgment on the ground that it had no prior notice or
knowledge of the order of respondent court denying its MR, and that while there was a certification from the Bureau of
Posts that three registry notices were sent to petitioner's counsel, there was no allegation or certification that said notices
were actually received by the addressee.
7. CFI denied the omnibus motion. CFI held that the presumption that official duty of the postmaster was regularly performed
was not overcome. Based on the postmaster's certification, three notices of the registered mail were sent to respondent
PNB's counsel at the PNB Building. Furthermore, PNB's counsel at the hearing admitted that the aforesaid registered
notices could have been received by PNB's regular Receiving Section at the PNB Building but were not forwarded by said
Receiving Section to the Legal Department at an upper floor of the same building.
Issues:
1. WON the CFI acted capriciously and arbitrarily when it granted the entry of final judgment and ordered the cancellation
of entries on the certificates of title, despite the fact that there was no certification that the registry notices were actually
received by PNB – NO
Argument:
Petitioner argues that:
 it had no notice or knowledge that the order denying its motion for reconsideration was issued;
 that the notices of registered mail allegedly containing the said order were not received by petitioner's counsel of record,
 the certification of the Bureau of Posts refers only to the fact that registry notices were sent, and not to the fact that the
notices were actually received by the addressee.
Ratio:
NO – CFI did not act capriciously and arbitrarily when it granted the entry of final judgment and ordered the cancellation of
entries on the certificates of title.

 Section 8 of Rule 13 of the Rules of Court, as amended, provides that service by registered mail is complete upon actual
receipt by the addressee; but if he fails to claim his mail from the post office within five (5) days from the date of first notice
of the postmaster, service shall take effect at the expiration of such time. The fair and just application of that exception
depends upon the conclusive proof that the first notice was sent by the postmaster to the addressee. The best evidence of
that fact would be the certification from the postmaster.

o CFI found that the postmaster's certification stated that three (3) notices of the registered mail which contained
the order denying petitioner’s motion for reconsideration, were sent to petitioner PNB's counsel at Escolta, Manila
which is the address stated in the record of the case.
o The postmaster's certification that said notices were sent to him prevails over the denial of petitioner’s counsel
that he received the notice of the registered mail.
 The postmaster has the official duty to send notices of registered mail and the presumption is that official duty was
regularly performed.

Dispositive: Wherefore, the petition is DISMISSED and the assailed orders of respondent court dated April 22,1982, September 14,
1982 and January 12, 1983 are AFFIRMED.