G.R. No. L-31472 November 10, 1981
ALEXANDER LEYSON, petitioner, vs. HON. JUDGE SANTIAGO O. TANADA, FELISA T. NACION, ESTER NACION, FILEMON GACAYAN, EUSEBIO GACAYAN, ADELINA DE LOS SANTOS and HEIRS OF SERGIO GACAYAN, respondents.

FACTS

Petitioner Alexander Leyson was a judgment creditor who won a labor case against Filemon Gacayan. To satisfy the monetary award, the City Sheriff of Cebu levied upon and sold at public auction a parcel of land registered solely in the name of Filemon Gacayan under TCT No. 19114 (Lot No. 7525-B). Leyson was the highest bidder, and after the redemption period lapsed, he obtained a definite deed of sale. He then filed a petition with the land registration court for the issuance of a new certificate of title in his name pursuant to Section 78 of the Land Registration Act.
The land registration court initially granted Leyson’s petition. However, several parties filed motions for reconsideration, asserting conflicting ownership claims. It was revealed that a notice of lis pendens was annotated on the title, stemming from a prior partition case (Civil Case No. R-7181) filed by Adelina de los Santos against her estranged husband, Filemon Gacayan. In that case, the court had declared Filemon and Adelina as co-owners of a one-third portion of a property, though the decision referenced “Lot No. 7525-G.” Other parties had also intervened in that case. Given these conflicting claims, the land registration court reconsidered and denied Leyson’s petition for a new title.

ISSUE

Whether the land registration court erred in denying the petitioner’s application for the entry of a new certificate of title covering the entire Lot No. 7525-B.

RULING

The Supreme Court upheld the denial of a new title for the entire lot but modified the order to recognize Leyson’s limited interest. The Court ruled that the principle of caveat emptor (let the buyer beware) applies to execution sales. A purchaser at a sheriff’s sale acquires only the right, title, and interest that the judgment debtor had in the property at the time of the levy, not a warranty of clear title. The sheriff does not guarantee the title or warrant possession against third-party claims.
The legal logic is anchored on Section 35 of the Rules of Court, which provides that the execution purchaser is substituted to all the rights of the judgment debtor as of the time of the levy. Here, at the time of the levy and sale, Filemon Gacayan’s interest was already subject to the pending partition case and the annotated lis pendens. The final decision in that case established that Filemon was merely a co-owner of a one-third interest in the property, with his spouse Adelina holding the other half of that share. Consequently, Filemon’s alienable interest was only one-half of the one-third share, or a one-sixth (1/6) interest in Lot No. 7525-B.
Therefore, Leyson could only acquire that one-sixth interest through the execution sale. He was not entitled to a new certificate for the entire lot, as there were adverse claims from co-owners and other intervenors. The Supreme Court modified the appealed order, directing the Register of Deeds to annotate Leyson’s ownership right over a one-sixth portion of the lot on TCT No. 19114.