G.R. No. L-45290; April 19, 1939
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant. CHING LIU & CO., petitioner-appellee, vs. PAULA MERCADO, oppositor-appellant.

FACTS

Fernando Go Chioco owned a parcel of land registered under the Torrens system. He mortgaged it to Ching Yng Si. Subsequently, Paula Mercado obtained a writ of attachment against Go Chioco’s interest in the same property, which was duly annotated on the certificate of title. Mercado later secured a judgment against Go Chioco, but the execution was returned unsatisfied. Ching Yng Si then foreclosed the mortgage, purchased the property at auction, and later sold it to Ching Liu & Co. The new transfer certificate of title issued to Ching Liu & Co. still carried the annotation of Mercado’s attachment. Ching Liu & Co. filed a motion to cancel this annotation, which the trial court granted. Mercado appealed.

ISSUE

Whether a duly registered writ of attachment creates a lien on the property that survives a foreclosure sale and must be respected by the subsequent purchaser, and whether the attaching creditor is a necessary party to the foreclosure suit.

RULING

Yes. The Supreme Court reversed the trial court’s order. A writ of attachment, once duly annotated on a Torrens certificate of title, constitutes a specific lien on the property from the moment of its registration. This lien is as effective as a mortgage lien and attaches to the property itself. Since Mercado’s attachment was registered prior to the foreclosure, it created a vested interest in the property. Consequently, under the Code of Civil Procedure, Mercado, as a party claiming a subordinate interest in the mortgaged premises, was a necessary party to the foreclosure proceedings and should have been included as a defendant. Her lien was not extinguished by the foreclosure sale to which she was not made a party. The annotation on the title must therefore remain.

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