GR 42897; (July, 1937) (Digest)
G.R. No. 42897; July 27, 1937
WILLIAM H. ANDERSON & CO., petitioner-appellant, vs. GREGORIO GARCIA, oppositor-appellee.
FACTS
William H. Anderson & Co. obtained a judgment against Cipriano Obcena. On June 22, 1927, the municipal court of Manila issued an order of execution. On September 7, 1927, two parcels of land (lots 4019 and 4043) registered in Obcena’s name under the Torrens system were levied upon and sold at public auction to Anderson & Co. The certificate of sale was registered and annotated on Obcena’s certificate of title on September 21, 1927. After the redemption period expired, a final deed of sale was executed in favor of Anderson & Co. on July 12, 1934. However, prior to the execution sale, on March 23, 1927, Obcena had sold lot 4019 to Aurora Riquez via an absolute deed of sale. On the same date, Riquez sold the same lot to Gregorio Garcia under a pacto de retro sale. Both deeds were only registered on November 3, 1930. Upon registration, Riquez obtained a new transfer certificate of title, which was then cancelled, and a new title was issued to Garcia. Both new titles bore an annotation of the lien in favor of Anderson & Co. Anderson & Co. filed a petition to cancel the titles issued to Riquez and Garcia and have a title issued in its name. Garcia opposed, claiming superior right as a prior purchaser in good faith. The lower court denied Anderson & Co.’s petition, ruling the issue should be determined in a separate ordinary action.
ISSUE
Who has a superior right over lot No. 4019, William H. Anderson & Co. (the purchaser at the execution sale) or Gregorio Garcia (the prior transferee under an unregistered deed)?
RULING
The Supreme Court ruled in favor of William H. Anderson & Co. 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 only charged with notice of the burdens noted on the certificate of title. At the time of the levy and execution sale, the certificate of title was in Obcena’s name, free from any encumbrance or annotation of the prior sales. Anderson & Co., as a purchaser at the auction sale, had no notice, actual or constructive, of the unregistered conveyances to Riquez and Garcia. Therefore, as a bona fide purchaser for value at the execution sale, it acquired good title superior to that of Garcia, whose prior transfer was unrecorded at the time of the auction sale. The Court ordered the issuance of the corresponding certificate of title in the name of William H. Anderson & Co.
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