G.R. No. L-11596; March 16, 1959
ALTO SURETY & INSURANCE CO., plaintiff-appellee, vs. ELEUTERIO LIMCACO, ET AL., defendants-appellants.

FACTS

On January 19, 1950, plaintiff Alto Surety & Insurance Co. filed an action against defendants to recover a sum based on an indemnity agreement. The Court of First Instance of Manila rendered a judgment in favor of the plaintiff, which became final and executory. A writ of execution was subsequently issued, leading to the levy and sale at public auction of a parcel of land belonging to defendant Emilio D. Dizon, which was covered by Transfer Certificate of Title No. 15198. The property was adjudicated to the plaintiff as the highest bidder. After negotiations for repurchase failed, the plaintiff filed a petition in the same case to cancel the original title and have a new one issued in its name, and to be placed in possession of the property under Section 31, Rule 39 of the Rules of Court. Defendants opposed the petition verbally, arguing that the court lacked jurisdiction as such a petition should be filed in the original registration case. The lower court overruled the opposition and issued an order directing the Register of Deeds to cancel the title and issue a new one in the plaintiff’s name, and directing the sheriff to place the plaintiff in possession. Defendants appealed from this order.

ISSUE

Whether the lower court acted within its jurisdiction in granting the plaintiff’s petition to cancel the original certificate of title and issue a new one in its name, and to be placed in possession of the property acquired through an execution sale.

RULING

The Supreme Court ruled that the lower court acted in excess of its jurisdiction in ordering the cancellation of the original certificate of title and the issuance of a new one in the plaintiff’s name. The property is registered under Act No. 496 (the Land Registration Act). Under Section 78 of said Act, a person claiming under an execution may petition the court for entry of a new certificate after the redemption period expires. Furthermore, Section 112 of the same Act mandates that any petition filed after original registration shall be filed and entitled in the original case in which the decree of registration was entered. Citing Gavan vs. Wislizenus, 48 Phil. 632, the Court emphasized that land registration proceedings are separate from ordinary civil actions, and petitions under the Land Registration Act must be presented in the original registration case to avoid confusion and maintain the integrity of the registry records. Therefore, that portion of the order was set aside for lack of legal validity.
However, the Court affirmed the portion of the order directing the sheriff to deliver possession of the property to the plaintiff. This was proper under Section 31, Rule 39 of the Rules of Court, which entitles the purchaser at an execution sale, after the expiration of the redemption period without redemption, to a conveyance and possession of the property.
DISPOSITIVE PORTION:
The order appealed from is set aside insofar as it orders the Register of Deeds to issue a new certificate of title in the name of the plaintiff, but affirmed insofar as it orders the sheriff to deliver possession of the property to the plaintiff. No costs.