G.R. No. 172316; December 8, 2010
SPOUSES JOSE CHUA and MARGARITA CHUA, Petitioners, vs. THE HONORABLE PEDRO GUTIERREZ, in his capacity as Presiding Judge of Branch 119, Regional Trial Court, Pasay City, PEDRO A. ABADILLA, in his capacity as Sheriff IV of Branch 119, Regional Trial Court, Pasay City, and TAN TEK SING, a.k.a. PETER TAN, Respondents.

FACTS

Petitioners Spouses Chua purchased Townhouse Unit 320 from Benito Chua via a Deed of Absolute Sale dated July 20, 1994, but registered the sale only on January 5, 1995. Meanwhile, respondent Tan Tek Sing filed a collection suit against Benito and secured a writ of preliminary attachment. On November 18, 1994, a notice of levy on attachment was annotated on the Transfer Certificate of Title (TCT) still in Benito’s name. The trial court initially excluded the property from attachment, but the Court of Appeals reversed this, ruling the property subject to the levy. The Supreme Court dismissed petitioners’ appeal on procedural grounds, making the CA decision final.
After the judgment became final, respondent moved for execution against the townhouse. Petitioners moved to quash the writ, arguing they were not the judgment debtors and had acquired the property before the suit. The RTC denied their motion, and the CA affirmed, prompting this petition.

ISSUE

Whether a registered writ of attachment constitutes a superior lien over a prior but unregistered deed of sale, thereby subjecting the property to execution.

RULING

The Supreme Court denied the petition, affirming the CA. The core legal principle is that under the Torrens system, registration is the operative act that binds the land. Applying Section 51 of Presidential Decree No. 1529 (Property Registration Decree), the Court held that any unregistered sale or transaction prior to registration is not binding on third parties. At the time the notice of levy was annotated on November 18, 1994, the title was still in Benito’s name, as petitioners’ deed of sale remained unregistered until January 5, 1995. Consequently, the registered attachment lien gained priority over petitioners’ unregistered claim.
The Court emphasized that a levy on attachment, once duly registered, creates a preference that retroacts to the date of its annotation. This preference is not defeated by a subsequent registration of a prior sale. Therefore, the property, though later registered in petitioners’ names, remained subject to execution to satisfy Benito’s debt. Petitioners’ remedy lies in seeking reimbursement from Benito, the vendor and judgment debtor. The execution was proper as it extended to property that was unquestionably owned by the debtor at the time the lien attached.