GR L 56483; (May, 1984) (Digest)
G.R. No. L-56483 May 29, 1984
SOSTENES CAMPILLO, petitioner, vs. HON. COURT OF APPEALS and ZENAIDA DIAZ VDA. DE SANTOS, in her capacity as Administratrix of the Intestate Estate of the late SIMPLICIO S. SANTOS, respondents.
FACTS
On February 27, 1961, Tomas de Vera sold two registered parcels of land to Simplicio Santos. This deed of sale was never presented for registration with the Registry of Deeds of Manila, nor was it annotated on the title, which remained in de Vera’s name. Subsequently, on January 27, 1962, petitioner Sostenes Campillo obtained a money judgment against Tomas de Vera. To satisfy this judgment, the City Sheriff levied upon and sold at public auction on July 25, 1962, three parcels of land still registered under TCT No. 63559 in de Vera’s name, which included the two lots previously sold to Santos. Campillo, as the highest bidder, obtained a certificate of sale and, after the redemption period, secured new titles (TCT Nos. 74019 and 74020) in his name for the disputed lots.
ISSUE
Who has a better right to the disputed parcels of land: Simplicio Santos, the prior unregistered buyer, or Sostenes Campillo, the subsequent buyer at an execution sale who obtained a certificate of title?
RULING
The Supreme Court reversed the Court of Appeals and ruled in favor of petitioner Sostenes Campillo. The legal logic is anchored on the principle of registration under the Torrens system. The Court held that a sale of registered land becomes legally effective against third persons only from the date of its registration. Since the sale from de Vera to Santos was never registered, it remained a mere personal contract between them and did not bind third parties. Consequently, at the time of the levy and execution sale, the properties were, according to the public records, still owned by the judgment debtor, Tomas de Vera. The Sheriff therefore properly levied upon them, and Campillo, as the purchaser at the execution sale, acquired all the rights and interests that de Vera had in the property as reflected on the title. The Court emphasized that a judgment creditor or a purchaser at an execution sale is considered a third party within the purview of the registration law. Thus, Campillo’s registered title, derived from a valid execution sale, must prevail over Santos’s unregistered prior claim. The decision of the trial court, which upheld the validity of the execution sale, was reinstated.