G.R. No. 45578 - Del Rosario vs. Santos

Case Summary (G.R. No. 45578)

Factual Background

On March 27, 1934, the Court of First Instance of Nueva Ecija, in civil case No. 4929 (Antonio del Rosario et al. vs. Casiano Cornejo), issued a writ of execution of judgment (Exhibit X) in favor of Antonio del Rosario and Apolonia Galicia against Casiano Cornejo. That writ of execution was noted at the back of original certificate of title No. 17379, which covered lot No. 669, after an attachment had been levied on the same date.

The original certificate of title was initially free of liens and encumbrances. After the writ of execution had been filed, registered, and noted on the certificate of title, Casiano Cornejo executed and had ratified before a notary public an instrument (Exhibit 1), dated January 6, 1934, by which he sold lot No. 669 with pacto de retro to Emiliana Santos. Precisely one month after the notation of the writ of execution, the deed of sale with pacto de retro (Exhibit 1) was filed and registered in the office of the register of deeds.

By virtue of the writ of execution, lot No. 669 was sold at public auction on May 3, 1934, and the property was adjudicated to Antonio del Rosario and Apolonia Galicia as the highest bidders for P600 (Exhibit A). During that execution sale, Emiliana Santos filed a third party claim of better right. To proceed with the execution sale despite the claim, the execution creditors filed the bond required under section 451 of Act No. 190, as amended by Act No. 4108. The bond was later cancelled because the third party claimant failed to bring the action required within the period fixed by the cited provision, namely within 120 days from the date of the sale.

Since the period of redemption of one year under section 466 of Act No. 190 elapsed without any redemption by any person mentioned in section 464 of Act No. 190, the provincial sheriff issued the final deed of sale (Exhibit B) on May 3, 1935.

When the purchasers and execution creditors presented that final deed of sale for registration on the same date, it was discovered that original certificate of title No. 17379 had already been cancelled and that transfer certificate of title No. 8211, which was intended to be issued in favor of Emiliana Santos, had been prepared. However, the transfer certificate was never signed by the register of deeds. The writ of execution appeared to have been noted at the back of that incomplete transfer certificate.

On July 18, 1935, the execution creditors filed a motion in the cadastral case seeking an order that the register of deeds cancel transfer certificate of title No. 8211 issued in the name of Emiliana Santos and issue another transfer certificate of title in their favor.

Identical Doctrinal Facts and Governing Principle from Precedent

The Court held that the controlling facts were identical with those in Worcester vs. Ocampo and Ocampo (34 Phil., 646). In that earlier case, a defendant’s pacto de retracto sale had not been recorded at the time an attachment was noted on the certificate of title in favor of the attaching creditor. When the property was subsequently sold at public auction and purchased by the creditor, the purchaser sought inscription under the Torrens system. A subsequent purchaser-opponent relied on the pacto de retracto sale, but the Court ruled that, because the pacto de retracto was unrecorded when the creditor secured a lien by attachment and the attachment was noted first, the purchaser’s right acquired subject to the lien of the attaching creditor and could not be enforced against the land until the creditor’s rights were fully satisfied.

In the present case, the Court applied the same reasoning. It found that when Emiliana Santos acquired her rights by purchase with pacto de retro from Casiano Cornejo regarding lot No. 669 described in original certificate of title No. 17379, those ownership rights became subject to the preferred right acquired by Antonio del Rosario and Apolonia Galicia through the earlier notation of the writ of execution.

The Court emphasized that the relevant timing was that the writ of execution was already filed, registered, and noted at the back of the original certificate of title from March 27, 1934, a month before the deed of sale with pacto de retro was filed and registered. Thus, the deed of sale with pacto de retro could not prevail over the attachment/execution lien already reflected on the Torrens certificate of title.

Effect of the Execution Lien and the Status of Transfer Certificate of Title No. 8211

The Court further held that, because the execution lien had been noted first, Emiliana Santos’s rights acquired after the notation became subordinate to the judgment creditors’ rights. It stated that the preferred right of Antonio del Rosario and Apolonia Galicia over the proceeds of the sale was one that had to be honored through the execution proceedings required by the writ.

With respect to the registration record, the Court observed that transfer certificate of title No. 8211, which was to be issued in the name of Emiliana Santos, was not perfected because the register of deeds never signed it. The register of deeds’ non-signature prevented transfer certificate of title No. 8211 from becoming a completed Torrens title instrument. The Court also noted the presence of the writ of execution noted at the back of the incomplete transfer certificate.

Given this situation, the Court concluded that there existed no legally and valid transfer certificate of title over lot No. 669 in favor of Emiliana Santos that could be cancelled.

Appellate Issues and the Court’s Disposition

On appeal, Emiliana Santos assigned as error that the Court of First Instance erred in ordering the cancellation of transfer certificate of title No. 8211 and the issuance of another in favor of the spouses Antonio del Rosario and Apolonia Galicia. She also contended that the trial court erred in failing to sustain her opposition on the ground that the court had no jurisdiction to order the cancellation and issuance upon a simple motion. She further assigned error in the denial of her motion for new trial.

The Court held that, in light of the governing doctrine from Worcester vs. Ocampo and Ocampo (34 Phil., 646) and the fact that the writ of execution was noted before the pacto de retro sale was filed and registered, the judgment appealed from had to be adjusted. It therefore reversed the decision in so far as it ordered the cancellation of transfer certificate of title No. 8211, and affirmed the judgment in all other respects. The Court taxed the costs to the appellant.

Legal Basis and Reasoning

The Court’s reasoning rested on the operation of sections 50 and 51 of Act No. 496, as applied in Worcester vs. Ocampo and Ocampo (34 Phil., 646). Those provisions, as interpreted in that precedent, dictated that when a pacto de retracto had not been recorded, filed, or entered in the office of the register of deeds until after the attachment lien had been secured and noted, the buyer acquired a right subject to the attaching creditor’s lien. The

Case Syllabus (G.R. No. 45578)

Parties and Procedural Posture

Antonio del Rosario and Apolonia Galicia sought relief in a cadastral case through a motion filed before the register of deeds of Nueva Ecija.
Emiliana Santos opposed the execution sale by filing a third party claim of better right and later appealed from the Court of First Instance of Nueva Ecija judgment that ordered cancellation of a transfer certificate of title.
The appeal questioned the trial court’s authority to order cancellation and the denial of appellant’s motion for new trial.
The dispositive ruling of the Court of First Instance ordered the cancellation of transfer certificate of title No. 8211 and the issuance of another in favor of the spouses Antonio del Rosario and Apolonia Galicia upon payment of corresponding fees.
The Supreme Court reversed the appealed judgment in so far as it ordered the cancellation of transfer certificate of title No. 8211, while affirming it in other respects.

Key Factual Allegations

On March 27, 1934, the Court of First Instance of Nueva Ecija issued a writ of execution in civil case No. 4929, Antonio del Rosario et al. vs. Casiano Cornejo, and the writ was noted at the back of original certificate of title No. 17379 covering lot No. 669.
The original certificate of title No. 17379 was described as free of all liens and encumbrances at the time the writ of execution was noted.
On April 27, 1934, a deed of sale with pacto de retro dated January 6, 1934 was filed and registered by Casiano Cornejo in favor of Emiliana Santos, and it was later described as being registered and noted at the register of deeds after the writ of execution had already been noted.
Exactly one month after the registration of the writ of execution, the pacto de retro deed was filed and registered in the same office, making the recording sequence pivotal to priority.
By virtue of the writ, lot No. 669 was sold at public auction on May 3, 1934, and the execution creditors Antonio del Rosario and Apolonia Galicia became the highest bidders for P600.
Emiliana Santos filed a third party claim of better right in connection with the auction sale.
The execution creditors posted a bond in favor of the provincial sheriff pursuant to section 451 of Act No. 190, as amended by Act No. 4108, to proceed with the sale pending the third party claim.
The bond was later cancelled because the third party claimant failed to bring the action required under section 451 within the statutory period of 120 days.
After the redemption period of one year under section 466 of Act No. 190 had elapsed without redemption by any person mentioned in section 464, the provincial sheriff issued the final deed of sale on May 3, 1935.
When the execution creditors presented the final deed of sale for registration on May 3, 1935, it was discovered that original certificate of title No. 17379 had already been cancelled and that transfer certificate of title No. 8211 (prepared to issue in favor of Emiliana Santos) already existed.
Transfer certificate of title No. 8211 was described as incomplete because the register of deeds never signed it, and the execution writ appeared noted at the back of that incomplete certificate.
On July 18, 1935, the execution creditors filed a motion in the cadastral case seeking to compel the register of deeds to cancel transfer certificate of title No. 8211 and to issue another certificate in their favor.
The Court treated the recording facts as identical to the priority issue decided in Worcester vs. Ocampo and Ocampo (34 Phil., 646).

Statutory Framework

The Court applied the execution and third party claim regime under section 451 of Act No. 190, as amended by Act No. 4108, including the consequences of failing to file the required action within 120 days.
The Court applied the redemption rules under section 466 of Act No. 190, tied to the one-year period after an ordinary execution sale.
The Court referenced section 464 of Act No. 190 as specifying the persons entitled to redeem and noted that none redeemed within the legally fixed period.
The Court relied on th