GR L 45112; (April, 1939) (Digest)
G.R. No. L-45112; April 3, 1939
APOLONIA GOMEZ, plaintiff-appellee, vs. LEVY HERMANOS, INC., THE PROVINCIAL SHERIFF OF LAGUNA, MARTA MACALALAG, and MARIANO VILLANUEVA, defendants-appellants.
FACTS
The spouses Marta Macalalag and Mariano Villanueva sold two parcels of land to Apolonia Gomez on September 18, 1929, with a right of repurchase within three years. The lands were then under cadastral proceedings. On October 25, 1932, Levy Hermanos, Inc., a judgment creditor of Marta Macalalag, attached the lands and had the attachment annotated on the certificates of title, which had since been issued. Apolonia Gomez filed a third-party claim, but the sheriff proceeded with the auction sale on December 2, 1932, selling the lands to Levy Hermanos, Inc. Only on November 21, 1932, after the attachment annotation, did Gomez cause the inscription of her 1929 pacto de retro sale on the certificates of title. After the redemption period expired, the sheriff executed a final deed of sale in favor of Levy Hermanos, Inc., on December 18, 1933. Gomez had previously sought in the cadastral court to cancel the attachment annotation and obtain titles in her name, but her petition was denied, and she did not appeal. The cadastral court later ordered her to surrender the titles for cancellation and issuance of new ones in favor of Levy Hermanos, Inc., which order she also did not appeal, instead filing this action to annul the auction sale.
ISSUE
Whether the rights of Levy Hermanos, Inc., as a judgment creditor who attached and annotated its lien on the certificates of title prior to the annotation of Gomez’s pacto de retro sale, are superior to the rights of Gomez as the pacto de retro vendee.
RULING
Yes. The Supreme Court reversed the trial court’s judgment in favor of Gomez. Under the Torrens system ( Act No. 496 ), the priority of registration governs the priority of rights. Levy Hermanos, Inc.’s attachment was annotated on October 25, 1932, creating a prior registered lien on the property. Gomez’s title, inscribed only on November 21, 1932, was acquired subject to that prior lien. Therefore, Levy Hermanos, Inc.’s right to execute on the judgment credit is preferred and superior. Furthermore, Gomez is barred from obtaining relief because she did not appeal the final orders of the cadastral court, which denied her petition and ordered the issuance of new titles in favor of Levy Hermanos, Inc.
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