Spouses Castro sold a parcel of unregistered coconut land in Surigao del Norte to Manuelito Palileo. The sale is evidenced by a notarized deed of sale and Palileo exercised acts of ownership through his mother and also paid real estate taxes.
Meanwhile, a judgment over a civil case was rendered agains Enriqur Castro ordering him to pay 22K to Radiowealth Finance Co.
Pursuant to this, the provincial sheriff levied upon and sold in public auction the subject land that was previously sold to Palileo. A certificate of sale was issued in favor of Radiowealth being the lone bidder and after the expiration of the period of redemption, a deed of final sale was also executed in their favor and both deeds was registered to the Registry of Deeds.
WON the sale in public auction is valid.
Had Art.1544 been applied, the judgment should be rendered in favor of Radiowealth being the one who registered the land first. But since the subject land is an unregistered land, a different rule should apply.
Under Act.3344 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.
Article 1544 of the Civil Code has no application to land not registered under the torrens system. It was explained that this is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of the judgment debtor, and merely acquires the latter's interest in the property sold as of the time the property was levied upon. As such, the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale.