G.R. No. 56483. May 29, 1984
SOSTENES CAMPILLO, PETITIONER, VS. HON. COURT OF APPEALS AND ZENAIDA DIAZ VDA. DE SANTOS, IN HER CAPACITY AS ADMINISTRATRIX OF THE INTESTATE ESTATE OF THE LATE SIMPLICIO S. SAN…
DE CASTRO, J.:
the defunct, Court of Appeals in CA-G. R. No. 62842-R issued on March 9,
1981, the only issue is whether who has a better right or title to the
herein disputed two (2) parcels of land — Simplicio Santos who earlier
purchased them in a private sale but failed to register his sale, or
petitioner Sostenes Campillo who subsequently purchased them at an
execution sale and obtained a certificate of title.
The pertinent undisputed facts, may be summarized as follows: On
February 27, 1961, Tomas de Vera and his wife Felisa Serafico sold two
(2) parcels of land located in Tondo, Manila, designated as Lots 1 and 2
of the consolidation and subdivision plan (LRC) Pcs. 888 and segregated
from Transfer Certificate of Title No. 37277 under Transfer Certificate
of Title No. 63559, to Simplicio Santos, now deceased and is
represented by his administratrix, Zenaida Diaz Vda. de Santos, the
herein private respondent. Said sale was however never presented for
registration in the office of the Registry of Deeds of Manila nor noted
in the title covering the property.
On January 27, 1962, petitioner Sostenes Campillo obtained a judgment
for a sum of money against Tomas de Vera in Civil Case No. 49060 of the
Court of First Instance of Manila. That judgment became final and
executory, and petitioner obtained an order for the issuance of a writ
of execution. The writ was issued on April 4, 1962 and pursuant
thereto, the City Sheriff levied on three (3) parcels of land covered by
TCT No. 63559 in the name of Tomas de Vera, including the two (2)
parcels of land which the latter previously sold to Simplicio Santos.
On June 26, 1962, notice of the sale of said lots was issued by the
Sheriff and published in the “Daily Record” and “La Nueva Era.”
On July 25, 1962, the three parcels of land were sold at public auction
for P17,550.81 in favor of petitioner who was issued the corresponding
certificate of sale. After the lapse of one year, the City Sheriff
executed the final deed of sale in favor of petitioner over the three
(3) parcels of land levied and sold on execution. On February 4, 1964,
TCT No. 63559 was cancelled and in lieu thereof, TCT No. 73969 was
issued by the Registry of Deeds of Manila in the name of petitioner
Sostenes Campillo. Upon petition by the latter, the Registry of Deeds
cancelled TCT No. 73969 and issued in lieu thereof TCT Nos. 74019 and
74020 over the disputed Lots 1 and 2, respectively.
Claiming to be the owner of the two parcels of land by reason of the
previous sale to him by Tomas de Vera, Simplicio Santos filed an action
to annul the levy, notice of sale, sale at public auction and final deed
of sale of Lots 1 and 2 in favor of petitioner Campillo, with damages.
In resisting the complaint, the herein petitioner as one of the
defendants below, alleged that he is an innocent purchaser for value and
that the supposed previous sale could not be preferred over the levy
and sale at public auction because it was not registered.
After due trial, the lower court rendered judgment sustaining the
validity of the levy and sale at public auction primarily because at the
time of the levy and sale, the disputed properties were still
registered in the name of the judgment debtor, Tomas de Vera. Besides,
the trial court ruled, the sale to Simplicio Santos which was not
registered nor noted in the title of the subject lots, cannot bind third
persons.
On appeal at the instance of the herein private respondent, the
respondent appellate court modified the decision of the lower court, as
follows:
“WHEREFORE, the judgment of the trial court is hereby modified as follows:
“(1) The dismissal of the amended complaint as against
defendant Sostenes Campillo only and ordering the plaintiff to pay the
costs of suit are set aside;“(2) Declaring the levy, sheriff’s sale and sheriff’s
certificate in favor of defendant Sostenes Campillo null and void and of
no effect;“(3) Declaring plaintiff Simplicio Santos, now his estate, to
be the owner of the two parcels of land under litigation and embraced in
Transfer Certificate of Title No. 63559; and“(4) Ordering the Register of Deeds of Manila to cancel
Transfer Certificate of Title Nos. 74019 and 74020 in the name of
defendant Sostenes Campillo and to issue the proper certificate of title
in the name of the estate of Simplicio Santos.“The rest of the judgment appealed from is hereby affirmed.” (p. 45, Rollo)
Rationalizing its stand, the appellate court said that the subject lots
could not be legally levied upon to satisfy the judgment debt of the de
Veras in favor of petitioner because at the time of the execution sale,
the judgment debtor, having previously sold said properties, was no
longer the owner thereof; that since the judgment debtor had no more
right to or interest on the said properties, then the purchaser at the
auction sale acquires nothing considering that a judgment creditor only
acquires the identical interest possessed by the judgment debtor in the
property which is the subject of the auction sale, and he takes the
property subject to all existing equities to which the property would
have been subject in the hands of the debtor; and, while it may be true
that Simplicio Santos did not record or register the sale of the
disputed lots, the levy on execution does not take precedence over the
unrecorded deed of sale to the same property made by the judgment debtor
anterior to the said levy since the judgment creditor is not a third
party within the meaning of the law and could not therefore be
considered as purchaser for value in good faith.
After a conscientious review and scrutiny of the records of this case as
well as existing legislations and jurisprudence on the matter, We are
constrained to reverse the judgment of the respondent appellate court
and rule in favor of the herein petitioner.
It is settled in this jurisdiction that a sale of real estate, whether
made as a result of a private transaction or of a foreclosure or
execution sale, becomes legally effective against third persons only
from the date of its registration.[1]
Consequently, and considering that the properties subject matter
hereof were actually attached and levied upon at a time when said
properties stood in the official records of the Registry of Deeds as
still owned by and registered in the name of the judgment debtor, Tomas
de Vera, the attachment, levy and subsequent sale of said properties are
proper and legal. The net result is that the execution sale made in
favor of the herein petitioner transferred to him all the rights,
interest and participation of the judgment debtor in the afore-stated
properties as actually appearing in the certificate of title, unaffected
by any transfer or encumbrance not so recorded therein.
Section 51, PD No. 1529, otherwise known as the Property Registration Decree, provides as follows:
“Section. 51. Conveyance and other dealings by registered owner. –
An owner of registered land may convey, mortgage, lease, charge or
otherwise deal with the same in accordance with existing laws. He may
use such forms of deeds, mortgages, leases or other voluntary
instruments as are sufficient in law. But no deed, mortgage, lease
or other voluntary instrument, except a will purporting to convey or
affect registered land shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as
evidence of authority to the Register of Deeds to make registration.“The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned,
and in all cases under this Decree, the registration shall be made in
the office of the Register of Deeds for the province or city where the
land lies.” (Italics for emphasis)
As succinctly stated in the case of Philippine National Bank vs. Court of Appeals, 98 SCRA 207:
“Whatever might have been generally or unqualifiedly Stated in the
cases heretofore decided by this Court, We hold that under the Torrens
system, registration is the operative act that gives validity to the
transfer or creates a lien upon the land. A person dealing with
registered land is not required to go behind the register to determine
the condition of the property. He is only charged with notice of the
burdens on the property which are noted on the face of the register or
the certificate of title. To require him to do more is to defeat one of
the primary objects of the Torrens system. A bona fide purchaser
for value of such property at an auction sale acquires good title as
against a prior transferee of same property if such transfer was
unrecorded at the time of the auction sale.” (Italics for emphasis)
The case of Leyson vs. Tañada,[2]
invoked by the private respondent is not in point. In that case, a
notice of lis pendens was inscribed at the back of the certificate of
title of the land subject therein before it was sold at public auction.
Necessarily, the purchaser at public auction is bound by the outcome of
the pending case referred to therein. Since it turned out that the
judgment debtor is merely a co-owner of the property sold at public
auction, then the purchaser thereat is not entitled to the entirety of
the land. As the Court held: “The interest acquired by a purchaser in
an execution sale is limited to that which is possessed by the debtor.
If there is more than one person owning property in common and an
execution against one only is levied thereon, the sale effected by the
Sheriff under such execution operates exclusively upon the interest of
the execution debtor, without being in any wise prejudicial to the
interest of the other owners. The result in such case merely is that
one new owner in common is substituted for the owner whose interest is
alienated by process of law.”
While it may be true as stated in the aforesaid case of Leyson vs.
Tañada, that purchasers at execution sales should bear in mind that the
rule of caveat emptor applies to such sales, that the sheriff
does not warrant the title to real property sold by him as sheriff, and
that it is not incumbent on him to place the purchaser in possession of
such property, still the rule applies that a person dealing with
registered land is not required to go behind the register to determine
the condition of the property and he is merely charged with notice of
the burdens on the property which are noted on the face of the register
or the certificate of title. Hence, the petitioner herein, as the
purchaser in the execution sale of the registered land in suit, acquires
such right and interest as appears in the certificate of title
unaffected by prior lien or encumbrances not noted therein. This must
be so in order to preserve the efficacy and conclusiveness of the
certificate of title which is sanctified under our Torrens system of
land registration.
WHEREFORE, the questioned decision of the respondent appellate court is
hereby reversed and set aside, and the judgment of the lower court is
reinstated. Without pronouncement as to costs.
SO ORDERED.
Guerrero, J., concur.
Makasiar, J., (Chairman), joins JJ., Aquino and Abad Santos in their concurring opinion.
Aquino and Abad Santos JJ., see concurring opinion.
Concepcion, Jr., J., on leave.
Escolin, J., in the result.
[1] Campillo vs. Philippine National Bank, 28 SCRA 220.
[2] 109 SCRA 66.
CONCURRING OPINION
ABAD SANTOS, J.:
The question posed in this case is which of the two sales of the two
parcels of registered lands should be accorded legal protection.
The voluntary sale to Simplicio Santos was made in 1961. The sale was not registered in the Registry of Property.
The involuntary sale to Sostenes Campillo was made in 1962. The sale
was registered in the Registry of Property. In fact, Campillo was
issued a transfer certificate of title and later two transfer
certificates of title for each of the parcels.
The contract of sale is a consensual contract, i.e. it is perfected by
mere consent. But ownership of the thing sold shall be transferred to
the vendee only upon the actual or constructive delivery thereof. (Art.
1477, Civil Code.) In other words, there must be tradition.
In the case of lands registered under Act No. 496, as amended, said law
provides for a special kind of tradition. Sec. 50 provides:
“Sec. 50. An owner of registered land may convey, mortgage,
lease, charge, or otherwise deal with the same as fully as if it had not
been registered. He may use forms of deeds, mortgages, leases, or
other voluntary instruments like those now in use and sufficient in law
for the purpose intended. But no deed, mortgage, lease, or other
voluntary instrument, except a will, purporting to convey or affect
registered land, shall take effect as a conveyance or bind the land, but
shall operate only as a contract between the parties and as evidence of
authority to the clerk or register of deeds to make registration. The
act of registration shall be the operative act to convey and affect the
land, and in all cases under this Act the registration shall be made in
the office of the register of deeds for the province or provinces or
city where the land lies.”
Since the sale made in favor of the first vendee did not comply with the
above-quoted provision, the transaction was ineffectual as to third
persons. And since the sale made in favor of the second vendee complied
with the relevant provision, the sale to him was good and should be
protected.
CONCURRING OPINION
AQUINO, J.:
I concur.
In case of double sale of realty, the ownership passes to the vendee who
in good faith first recorded it in the Registry of Property, (Art.
1544, Civil Code). Hence, the petitioner has the better right to the
disputed parcels of land because the sale in his favor was recorded.