G.R. No. 252396 - Ridon vs. People

The subject property is Townhouse Unit 320, located at Roxas Sea Front Garden, Roxas Boulevard, Pasay City.
The property was originally covered by Transfer Certificate of Title (TCT) No. 127330 registered in the name of Benito Chua.
Petitioners, spouses Jose and Margarita Chua, purchased the property from Benito through a Deed of Absolute Sale executed on July 20, 1994 and registered on January 5, 1995.
After registration, TCT No. 127330 was cancelled and a new title, TCT No. 134590, was issued in the petitioners’ names, although the notice of levy was carried over into the new title.

On November 11, 1994, respondent Tan Tek Sing (a.k.a. Peter Tan) initiated a suit for collection against Benito by filing a case with the Regional Trial Court (RTC) of Pasay City.
Promptly, on November 15, 1994, the RTC issued a writ of preliminary attachment which led the Sheriff to levy Townhouse Unit 320.
On November 18, 1994, a notice of levy on attachment was inscribed on TCT No. 127330 by the Register of Deeds, while the title was still in Benito’s name.

On December 5, 1994, petitioners filed a Motion to Exclude and Remove the Writ of Attachment from the property, asserting that the sale to them had already been executed (albeit unregistered at that time).
Subsequently, on January 5, 1995, the petitioners registered the Deed of Absolute Sale, thereby effecting the transfer of title despite the earlier inscription of the attachment notice.

On April 26, 1995, the RTC rendered a decision making Benito liable to respondent yet excluded Townhouse Unit 320 from the attachment.
Respondent partially appealed the RTC decision; the Court of Appeals (CA) in its February 18, 1999 Decision modified the RTC ruling by subjecting Townhouse Unit 320 to the earlier writ of attachment.
Petitioners’ subsequent motion for reconsideration with the CA was denied on March 1, 2001, and further appeal in this Court (G.R. No. 147339) was dismissed on procedural grounds.
Despite the finality of the CA decision in CA-G.R. CV No. 49959, petitioners moved to quash the writ of execution on the ground that they were not the judgment debtors since the property had been sold to them prior to the suit’s institution.
The RTC denied petitioners’ motion on August 5, 2003 and again on December 3, 2003 upon their Motion for Reconsideration.
Petitioners then filed a petition for certiorari with the CA challenging the RTC orders, but on February 7, 2006, the CA denied their petition and subsequently, on April 17, 2006, its motion for reconsideration was also denied.

Petitioners contended that since the property was already sold and later registered in their names prior to the levy, it should not be subject to execution.
They argued that the property, being in their possession, could not be subjected to the registered attachment.
Additionally, petitioners raised an alternative argument involving a mortgage lien from Philippine American Life Insurance (PHILAM), asserting that the mortgage was superior.
Respondent maintained that the earlier inscription of the attachment on November 18, 1994 provided constructive and actual notice, thereby giving its lien preference over the subsequent registration of the sale and any claims arising from PHILAM’s mortgage.

Whether a registered writ of attachment (inscribed on November 18, 1994) creates a superior lien over a deed of sale that, although valid, was only registered later (January 5, 1995).
Whether the fact that petitioners were not the judgment debtors (given that the property was supposedly already sold to them) negates the effectiveness of the registered attachment.
Whether the argument that the property was already mortgaged to PHILAM and later released, thereby implying a superior claim, has any merit against the prior attachment lien.
Whether the principles of constructive notice and the operative effect of registration under the Torrens system mandate that the registered attachment prevails despite subsequent registration of a sale.