G.R. No. 179884 ; January 25, 2012
DURAWOOD CONSTRUCTION AND LUMBER SUPPLY, INC., Petitioner, vs. CANDICE S. BONA, Respondent.

FACTS

Petitioner Durawood Construction and Lumber Supply, Inc. (Durawood) filed a sum of money case against LBB Construction and its president. The Regional Trial Court (RTC) granted Durawood’s application for a writ of preliminary attachment. On June 17, 2004, Sheriff Leyva levied on a parcel of land covered by TCT No. R-17571 in LBB Construction’s name, and a Notice of Levy on Attachment was annotated on the title.
Respondent Candice S. Bona (Candice) moved to intervene, claiming she and her siblings were co-owners of the levied property by virtue of a Deed of Absolute Sale dated June 2, 2004, from LBB Construction. She asserted the sale was entered in the Registry of Deeds books on June 16, 2004 (Entry No. 30549), while the levy was entered on June 17, 2004 (Entry No. 30590). The RTC granted her motion to intervene.
Durawood obtained a favorable final judgment. Upon execution, it discovered TCT No. R-17571 had been cancelled and a new title, TCT No. R-22522, had been issued in the names of Candice and her siblings on June 16, 2004. Durawood filed a Motion to Reinstate the Notice of Levy on the new title, alleging the cancellation and issuance were antedated and unauthorized. It presented a certification that Atty. Edgar D. Santos was the Acting Register of Deeds of Antipolo City from June 1-30, 2004, not Atty. Randy A. Rutaquio, who signed the new title. Durawood argued the levy annotation was not carried over to the new title despite no court order dissolving the writ.
Atty. Rutaquio claimed the sale was entered in the Primary Entry Book prior to the levy, but the levy was inscribed on the old title first due to assignment to different examiners. He relied on an October 6, 2004 opinion from the LRA Administrator stating that since the deed of sale was considered registered on June 16, 2004, it took precedence over the June 17, 2004 levy.
The RTC granted Durawood’s motion, ordering the reinstatement of the levy on TCT No. R-22522, finding the cancellation unauthorized and the alienation in fraud of creditors. Candice appealed to the Court of Appeals (CA), which reversed the RTC. The CA held that the sale, being registered first on June 16, 2004, prevailed over the subsequently registered levy on June 17, 2004, pursuant to the rule on priority under the Land Registration Act. Durawood filed this Petition for Review.

ISSUE

Whether the sale of the property to respondent Candice Bona and her siblings, which was registered on June 16, 2004, has priority over the levy on attachment annotated on June 17, 2004, such that the levy should not be reinstated on the new title issued to the buyers.

RULING

The Supreme Court GRANTED the petition, REVERSED the Court of Appeals Decision, and REINSTATED the RTC Order directing the reinstatement of the notice of levy on attachment on TCT No. R-22522.
The Court ruled that the sale to the Bonas could not be considered registered on June 16, 2004. Registration is the act of entering or recording the deed in the Register of Deeds’ books, which must be performed by the proper official. The certification established that Atty. Edgar D. Santos was the Acting Register of Deeds authorized to perform such acts on June 16, 2004. Atty. Randy A. Rutaquio, who signed the new title, had no authority on that date. Therefore, the alleged registration and issuance of the new title on June 16, 2004, were void. The letter from the LRA Administrator, issued months later, could not validate an unauthorized act.
Consequently, the only valid and extant registration act was the annotation of the Notice of Levy on Attachment on TCT No. R-17571 on June 17, 2004. This levy, arising from a writ of preliminary attachment, created a lien on the property from the date of its annotation. The subsequent cancellation of the old title and issuance of a new one without carrying over this existing lien was improper. The purchaser of property subject to a writ of attachment is charged with knowledge of the annotation in the certificate of title and buys the property subject to that encumbrance.
The Court found no need to delve into the allegations of fraud under the Civil Code, as the resolution of the case hinged on the invalidity of the purported registration of the sale. The levy on attachment, being the only duly registered encumbrance, must be reinstated on the new title.