G.R. No. 142687 - Spouses Rodriguez vs. Court of Appeals

Respondents Spouses Antonio and Maridel Calingo owned a house and lot located at No. 7903 Redwood Street, Marcelo Green Village, Parañaque, Metro Manila.
The property was mortgaged to the Development Bank of the Philippines, later absorbed by the Home Mutual Development Fund (HMDF) or Pag-ibig.

On April 27, 1992, respondents Calingo sold the property to respondents Spouses Christopher and Ma. Angelica Barrameda, who assumed the mortgage with the Development Bank of the Philippines.
Respondents Barrameda issued two checks amounting to ₱678,539.76, for which respondents Calingo issued a receipt dated April 24, 1992.
On April 23, 1992, respondent Antonio Calingo informed HMDF/Pag-ibig about the sale via a letter and affidavit, but these were served only on October 2, 1992.

On May 29, 1992, respondents Barrameda filed an affidavit of adverse claim, recorded as Entry No. 3439 at the back of the certificate of title.
On June 1, 1992, respondent Ma. Angelica wrote HMDF seeking assistance on the loan settlement and property transfer.
Respondents Barrameda took possession of the property on June 2, 1992.

On July 13, 1992, a notice of levy with attachment due to a writ of execution was annotated on the certificate of title, issued in favor of petitioners Spouses Francisco and Bernardina Rodriguez, creditors of respondents Calingo.
Petitioners’ counsel sent a letter on July 21, 1992, to respondents Barrameda inquiring about their occupation of the property.
On August 21, 1992, respondents Barrameda paid the remaining ₱364,992.07 to respondents Calingo, who acknowledged receipt and waived further claims except for the mortgage.

On October 7, 1992, respondents Barrameda executed a joint affidavit asserting ownership by virtue of the deed of sale and challenged the legality of the levy.
Petitioners’ counsel responded on October 15, 1992, emphasizing that the deed of sale was unregistered and that HMDF records reflected ownership by respondents Calingo.
Notice of Sheriff’s Sale was posted on November 9, 1992, scheduling an auction of the property on December 3, 1992.
On November 20, 1992, respondents Barrameda filed a Notice of Third Party Claim, and on December 2, 1992, they filed a petition for quieting of title and preliminary injunction to enjoin the sale.

The Regional Trial Court of Makati dismissed respondents Barrameda’s petition, holding their adverse claim insufficient and that the sale prior to registration was ineffective against third parties. It also suspected collusion to defraud creditors.
The Court of Appeals reversed the trial court, ruling that the adverse claim on the certificate of title was still effective during the levy and that the notice of levy could not prevail over the adverse claim.
Petitioners’ motion for reconsideration was denied, prompting this petition to the Supreme Court.

Whether respondents Barrameda’s affidavit of adverse claim on the property could prevail over a notice of levy on execution issued to satisfy petitioners’ judgment against respondents Calingo.
Whether the deed of sale with assumption of mortgage, which was not registered, could bind third parties such as petitioners.
Whether the alleged collusion between respondents Barrameda and Calingo affected the validity of the sale and ownership claims.