G.R. No. L-15590; August 31, 1960
ASTURIAS SUGAR CENTRAL, INC., plaintiff-appellee, vs. CORAZON SEGOVIA, ET AL., defendants; F.Z. LEDDA and CO., defendant-appellant.

FACTS

The property in dispute was originally registered under Transfer Certificate of Title (TCT) No. T-2319 in the name of Ponciano Ambrosio. On July 18, 1952, Corazon Segovia de Zayco purchased the property, leading to the cancellation of TCT No. T-2319 and the issuance of TCT No. T-6825 in her name. Annotations from the old title were carried over to the new one, including two notices of attachment: (1) in favor of F.Z. Ledda and Co., Inc. (appellant), dated June 4, 1951, and registered on June 7, 1951 (Entry No. 7112), arising from Civil Case No. 11689 of the Court of First Instance (CFI) of Manila; and (2) in favor of Asturias Sugar Central, Inc. (appellee), dated June 13, 1951, and registered on June 13, 1951 (Entry No. 7145), arising from Civil Case No. 2151 of the CFI of Iloilo.
Subsequently, Ledda purchased Ponciano Ambrosio’s interest at a public auction on March 3, 1952, following a judgment and execution sale in its favor, but this sale was neither registered nor annotated on the certificates of title. Meanwhile, Asturias Sugar Central obtained a final judgment in its case, levied the property on execution, and purchased it at a public auction on October 24, 1953, with the certificate of sale registered.
Asturias Sugar Central then filed an action to quiet title, seeking cancellation of the annotations in favor of Ledda and others, declaration of ownership, and issuance of a new certificate in its name. The trial court ruled in favor of Asturias Sugar Central, ordering cancellation of the annotations and issuance of a new title. Only Ledda appealed.

ISSUE

Whether the execution sale in favor of Ledda, though unregistered, is preferred over the later execution sale in favor of Asturias Sugar Central, based on the priority of registration of their respective attachments.

RULING

Yes. The Supreme Court reversed the trial court’s decision regarding Ledda. The priority of rights over registered land under the Torrens System is determined by the priority of registration of the attachments, not the execution sales. Ledda’s attachment, registered on June 7, 1951, was a levy on execution after final judgment, while Asturias Sugar Central’s attachment, registered on June 13, 1951, was initially a preliminary attachment, with its levy on execution occurring later on October 15, 1953. Since Ledda’s lien was registered first, it enjoys priority. The execution sale to Ledda, though unregistered, relates back to the date of its attachment registration. Asturias Sugar Central, as a junior lien holder, had notice of Ledda’s prior recorded levy and was bound to account for subsequent developments. The action to quiet title was properly instituted as an ordinary civil action, as unanimity among parties was lacking, making proceedings under the Land Registration Act inappropriate. However, since Ledda’s auction sale remains unregistered and Asturias Sugar Central had no actual notice, the latter is granted the right of redemption under Rule 39, Section 25 of the Rules of Court within twelve months from the finality of the judgment.