Facts:

The case involves Sostenes Campillo as the plaintiff and appellee, and the Philippine National Bank (PNB) and the Register of Deeds of Pasay City as defendants. The appeal was taken by PNB from the decision of the Court of First Instance of Manila in Civil Case No. 43301, which was initiated by Campillo on June 2, 1960. The lower court's decision declared Campillo as the owner of the property covered by Transfer Certificate of Title No. 8067 and ordered the Register of Deeds to cancel the said title and issue a new one in favor of Campillo, subject to the mortgage encumbrance of PNB. The court also ordered PNB to pay attorney's fees of P1,000 and the costs of the action, while denying the damages prayed for by Campillo and dismissing PNB's counterclaim for lack of merit.

The background of the case reveals that on May 5, 1959, the Court of First Instance of Manila rendered a decision in Civil Case No. 35447, where a compromise agreement was approved between Campi...

Facts:

1. Compromise Agreement and Judgment

   • On May 5, 1959, the Court of First Instance of Manila rendered a decision in Civil Case No. 35447, approving a compromise agreement between Sostenes Campillo (plaintiff) and Justiniano D. Quirino (defendant). The agreement stipulated that Quirino owed Campillo P45,837.28, with interest, and required Quirino to pay the amount within six months. Failure to pay would result in the issuance of a writ of execution.

2. Execution and Levy on Property

   • After the judgment became final and executory, a writ of execution was issued. The Sheriff of Manila levied on Quirino's personal properties, but the sale only netted P1,031.55. An alias writ of execution was issued on March 15, 1960, leading to the attachment and levy of Quirino's rights, title, and interest in a parcel of land in Pasay City, covered by T.C.T. No. 236-A. The property was mortgaged to the Philippine National Bank (PNB) for P13,000.00.

3. Third Party Claim by PNB

   • On April 5, 1960, PNB filed a third-party claim, asserting it was the mortgagee of the property. Despite this, the execution sale proceeded on April 8, 1960, with Campillo as the highest bidder. Campillo assumed the mortgage, and the certificate of sale was registered on April 12, 1960.

4. PNB's Alleged Ownership

   • PNB claimed it had acquired the property through an extra-judicial foreclosure sale on December 17, 1958, and that the redemption period expired on December 17, 1959, making it the absolute owner. However, the foreclosure sale was only registered on April 21, 1960.

5. Campillo's Action

   • Campillo filed a case on June 2, 1960, seeking to be declared the rightful owner of the property, to redeem it from PNB, and to recover damages. The trial court ruled in favor of Campillo, declaring him the owner and ordering PNB to pay attorney's fees.

Issue:

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Ruling:

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Ratio:

1. Registration as a Requirement for Effectiveness

   • Under Section 50 of Act 496 (Land Registration Act), a sale of real estate, whether through private transaction, foreclosure, or execution, becomes legally effective against third parties only upon registration. Since PNB's foreclosure sale was registered after the execution sale, it did not affect Campillo's rights.

2. Priority of Rights Based on Registration

   • The rights of Campillo, as the execution purchaser, took precedence over PNB's claim because the execution sale was registered before the foreclosure sale. The property was still legally owned by Quirino at the time of the levy and execution sale.

3. No Redemption Rights for PNB

   • PNB could not claim ownership or redemption rights over the property because its foreclosure sale was not registered at the time of the execution sale. The property was properly sold as Quirino's asset, and Campillo assumed the mortgage encumbrance.

Conclusion:

The Supreme Court upheld the lower court's decision, affirming Campillo's ownership of the property and ordering PNB to pay attorney's fees. The Court emphasized the importance of registration in determining the validity and priority of property rights.