Dagupan Trading Co. v. Macam
REITERATIONFacts
The Antecedents: Sammy Maron and his seven siblings were co-owners of an unregistered parcel of land. On June 19 and September 21, 1955, they executed deeds of sale conveying the property to appellee Rustico Macam. Macam took possession and introduced improvements. On October 14, 1955, Original Certificate of Title No. 6942 was issued in the names of the Marons. On August 4, 1956, a levy was made on Sammy Maron's share in the property by virtue of a judgment against him in favor of Manila Trading and Supply Company. This interest was sold at public auction to the judgment creditor, and subsequently, on March 1, 1958, the latter sold its rights to appellant Dagupan Trading Company. Procedural History: Appellant Dagupan Trading Company filed a complaint praying to be declared owner of one-eighth of the land, for partition, and for damages. The trial court dismissed the complaint, and the Court of Appeals affirmed the dismissal. The Petition: The case reached the Supreme Court on appeal, questioning who has the better right to Sammy Maron's one-eighth share between Dagupan Trading Company and Rustico Macam.
Issue(s)
Whether appellant Dagupan Trading Company has a better right than appellee Rustico Macam to the one-eighth share of Sammy Maron in the property. Whether the levy in execution on Sammy Maron's share was valid.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, holding that appellee Rustico Macam has the better right to the one-eighth share of Sammy Maron. The levy in execution made on Sammy Maron's share was declared void and of no effect.
Ratio Decidendi
On the issue of who has the better right to Sammy Maron's share: The Court distinguished between unregistered and registered land. If the land were unregistered, Macam's prior sale coupled with possession would prevail. If it were registered, the registered conveyance to appellant might prevail. However, the present case involves a sale to Macam before registration and a conflicting conveyance (via levy and sale) after registration. The Court held that the operative act determining ownership in this scenario is the provision of the Rules of Court regarding execution sales. Specifically, upon the execution of the final certificate of sale, the purchaser acquires the right, title, and interest of the judgment debtor as of the time of the levy. In this case, at the time of the levy on Sammy Maron's share, he had already conveyed his interest to Macam. Therefore, the levy was made on a property interest that Sammy Maron no longer possessed. Consequently, the subsequent levy and sale were void and of no effect. The unregistered sale to Macam, coupled with his possession and introduction of improvements, could not be nullified by the subsequent issuance of a Torrens title or the subsequent levy and sale. The Court emphasized that upholding Macam's right is in accordance with justice and equity, given his prior acquisition and possession of the property. On the validity of the levy in execution: The Court found the levy in execution to be void and of no effect. This is because the judgment debtor, Sammy Maron, had no longer any right or interest in the property at the time of the levy. His interest had been previously conveyed to appellee Rustico Macam through deeds of sale executed on June 19 and September 21, 1955. The levy was made on August 4, 1956, which was subsequent to the conveyance of Maron's interest. Therefore, the sheriff could not validly levy upon and sell an interest that the judgment debtor no longer owned. The Court cited Buson vs. Licuaco and Landig vs. U.S. Commercial Company in support of the principle that a subsequent levy on property already conveyed is void.
Main Doctrine
A levy in execution on a property is void and of no effect if the judgment debtor had already conveyed his interest in said property prior to the levy, even if the conveyance was unregistered and the property was subsequently registered under the Torrens system.