LAW ON SALES | RADIOWEALTH FINANCE COMPANY VS. PALILEO, 197 SCRA 245, MAY 20, 1991

RADIOWEALTH FINANCE COMPANY VS. PALILEO, 

197 SCRA 245, MAY 20, 1991

 

TOPIC/DOCTRINE

Act No. 3344, registration of instruments affecting unregistered lands is “without prejudice to a third party with a better right”.

 

FACTS

On April 13, 1970, defendant spouses Enrique Castro and Herminia R. Castro sold to plaintiff-appellee Manuelito Palileo (private respondent herein), a parcel of unregistered coconut land situated in Candiis, Mansayaw, Mainit, Surigao del Norte. The deed was not registered in the Registry of Property for unregistered lands. Since the execution of the deed of sale, appellee Manuelito Palileo exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix or overseer.

On November 29, 1976, a judgment was rendered against defendant Enrique T. Castro, in Civil Case to pay herein defendant-appellant Radiowealth Finance Company (petitioner herein), the sum of P22,350.35 with interest thereon at the rate of 16% per annum. Upon the finality of the judgment, a writ of execution was issued. Pursuant to said writ, defendant provincial Sheriff Marietta E. Eviota, levied upon and finally sold at public auction the subject land that defendant Enrique Castro had sold to appellee Manuelito Palileo on April 13, 1970. A certificate of sale was executed by the Provincial Sheriff in favor of defendant-appellant Radiowealth Finance Company, being the only bidder. Both the certificate of sale and the deed of final sale were registered with the Registry of Deeds.”

Learning of what happened to the land, private respondent Manuelito Palileo filed an action for quieting of title over the same. After a trial on the merits, the court a quo rendered a decision in his favor. On appeal, the decision of the trial court was affirmed.

 

ISSUE

Whether or not the rule provided in Article 1544 of the Civil Code as discussed above, is applicable to a parcel of unregistered land purchased at a judicial sale. To be more specific, this Court is asked to determine who, as between two buyers of unregistered land, is the rightful owner—the first buyer in a prior sale that was unrecorded, or the second buyer who purchased the land in an execution sale whose transfer was registered in the Register of Deeds.

 

RULING

The court held that Under Act No. 3344, registration of instruments affecting unregistered lands is “without prejudice to a third party with a better right”. The aforequoted phrase has been held by this Court to mean that the mere registration of a sale in one’s favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded.https://www.instagram.com/lawyalstudent/

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