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DRS. ALENDRY P. CAVILES v. EVELYN T. BAUTISTA

FACTS:

This case involves a dispute over a piece of real estate owned by respondent-appellants, the spouses Evelyn and Ramon Bautista. The property was previously owned by Renato C. Plata and covered by Transfer Certificate of Title No. S-33634 of the Pasay City (now Las Pinas) Registry. On September 22, 1982, petitioners-appellees, the spouses Alendry and Flora Caviles, Jr., filed a civil case against Plata for recovery of a sum of money and applied for the issuance of a writ of preliminary attachment. The writ was granted and on October 4, 1982, Deputy Sheriff Jaime L. de Leon issued a Notice of Attachment over the property. However, the attachment was not annotated on TCT No. S-33634 by the Register of Deeds, and the petitioners did not take any step to annotate the attachment.

On October 18, 1982, Plata sold the property to the respondents-appellants, free from any encumbrances. The title was subsequently cancelled, and TCT No. 57006 was issued in the name of the respondents. The petitioners were unaware of the sale and the issuance of a new title until later when they attempted execution of a favorable judgment in their civil case. It was only then that they discovered the property had been sold and a new title issued. They sought to annotate the certificate of sale on the respondents' title, but the Register of Deeds refused to sign. As a result, the petitioners initiated proceedings to compel the surrender of the owner's duplicate copy of TCT No. 57006 and the annotation of the certificate of sale.

The Regional Trial Court ruled in favor of the petitioners and ordered the respondents to surrender their owner's duplicate copy of the certificate of title for inscription of the certificate of sale. However, the Court of Appeals reversed the trial court's decision and upheld the respondents' title. The petitioners now raise several errors, including the application of relevant case precedents to the present case.

(Source: Bautista v. Caviles, G.R. No. 99942, February 16, 1993)

ISSUES:

  1. Which interest will prevail, that of petitioners or that of respondents?

  2. Can negligence be imputed to either party?

  3. Between the petitioners and the respondents, who has a better right to the property in question?

  4. Whether the execution sale in favor of the petitioners is superior to the sale of the same property to the respondents.

RULING:

  1. The interest of respondents will prevail. They are considered innocent purchasers for value and in good faith since they had no notice of any defect, irregularity, or encumbrance in the title of the property they purchased. They relied on the owner's duplicate certificate of title, which was free from the notice of attachment. The fact that the notice of attachment was not annotated on the original copy of the title does not affect their rights as innocent purchasers.

  2. Negligence cannot be imputed to either party. Petitioners paid the corresponding fees for the annotation of the notice of attachment and had every right to presume that the register of deeds would properly inscribe said notice on the original title. It was the duty of the register of deeds to do so, not the duty of the petitioners. Similarly, respondents cannot be faulted for relying solely on the certificate of title and not going beyond it.

  3. The Supreme Court ruled that the execution sale in favor of the petitioners is superior to the sale of the same property to the respondents. The Court held that the earlier registration of the petitioners' levy on preliminary attachment gave them superiority and preference in rights over the attached property as against the respondents.

PRINCIPLES:

  • One dealing with property registered under the Torrens System need not go beyond the certificate of title and is charged with notice only of burdens and claims that are annotated on the title.

  • Involuntary registration, such as an attachment, levy upon execution, and lis pendens, can be considered a sufficient notice to all persons of an adverse claim.

  • The duty to annotate a notice of attachment on the original certificate of title lies with the register of deeds, and parties who have paid the corresponding fees have the right to presume that the duty will be properly performed.

  • An entry in the day book or entry book of the Register of Deeds is sufficient notice of an adverse claim in involuntary registration, such as an attachment, levy on execution, or lis pendens.

  • An auction or execution sale retroacts to the date of levy of the lien of attachment.

  • The ownership of immovable property sold to different vendees shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.