Uy v. Medina
REITERATIONFacts
The Antecedents: Respondents Spouses Francisco and Natividad Medina executed a Deed of Conditional Sale, later a Deed of Absolute Sale, over a parcel of land in favor of petitioner Jay Hidalgo Uy. Subsequently, respondent Swift Foods, Inc. filed an action for sum of money against the Medinas, obtaining a favorable judgment and a writ of execution. Respondent Sheriff Antonio Managuelod then levied upon and scheduled for auction the parcel of land previously sold to petitioner Uy. Procedural History: Petitioner Uy filed a Complaint for Annulment of Sale with Damages against the Medinas, Sheriff Managuelod, and Swift Foods, Inc. The Regional Trial Court (RTC) ruled in favor of Uy, declaring the auction sale null and void for non-compliance with notice requirements. Swift Foods, Inc. appealed to the Court of Appeals (CA), which reversed the RTC's decision, holding that the validity of the notice of levy and auction sale was not properly raised as an issue and that the levy on execution, being registered earlier, was superior to the subsequent registration of the deed of sale. The Petition: Petitioner Uy filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision. He argues that the appellate court erred in reversing the trial court's findings by deciding on matters not pleaded and not the subject of the proceeding, and in ruling that the levy on execution is superior to the subsequent registration of a deed of sale. The petition seeks a reversal of the CA's affirmation of the levy's superiority and the annulment of the auction sale.
Issue(s)
Whether the Court of Appeals erred in reversing the trial court’s findings by deciding the case on a matter that was not pleaded nor the subject of the proceeding. Whether the Court of Appeals erred in ruling that the levy on execution is superior to the subsequent registration of a deed of sale.
Ruling
The petition is denied. The Decision of the Court of Appeals dated October 13, 2005, and its Resolution dated April 6, 2006, in CA-G.R. CV No. 82703, are AFFIRMED.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in reversing the trial court’s findings by deciding the case on a matter that was not pleaded nor the subject of the proceeding: The Supreme Court affirmed the CA's finding that the validity of the Amended Sheriff’s Notice of Levy and Auction Sale was not an issue pleaded by the petitioner. The appellate court observed that the main basis for the petitioner's cause of action was the existence of other properties of the Medinas that could be levied upon, not the infirmity of the sheriff's notice. The Court reiterated the rule that a judgment must conform to and be supported by both the pleadings and the evidence, and must be in accordance with the theory of the action on which the pleadings were framed and the case was tried. To enter an order exceeding the scope of relief sought by the pleadings, absent notice, would violate due process and surprise the defendant. The Court noted that the petitioner failed to attach a copy of his Complaint to the petition, hindering a review of whether the issue was properly pleaded, and thus relied on the CA's factual findings. On the issue of whether the Court of Appeals erred in ruling that the levy on execution is superior to the subsequent registration of a deed of sale: The Supreme Court affirmed the CA's ruling that a prior registration of a lien creates a preference. Even though the sale of the land to the petitioner occurred before the judgment in favor of Swift and the issuance of the writ of execution, the failure to register the sale with the Register of Deeds negated any priority the petitioner might have acquired. The Court emphasized that under the Torrens System, registration is the operative act that conveys or affects registered land, especially concerning third persons. Sections 51 and 52 of Presidential Decree No. 1529 (Property Registration Decree) were cited, stating that no deed shall take effect as a conveyance or bind the land until registered, and that registration serves as constructive notice to all persons. Consequently, the levy on execution, registered on September 1, 1998, took precedence over the sale to the petitioner, despite the latter's subsequent registration on September 14, 1998. This preference in favor of the levy on execution retroacts to the date of the levy to prevent the preference from becoming nugatory.
Main Doctrine
A levy on execution, duly registered, takes preference over a prior unregistered sale, as registration is the operative act that gives validity to the transfer or creates a lien upon the land under the Torrens System. The preference created by the levy on attachment is not diminished even by the subsequent registration of the prior sale because an attachment is a proceeding in rem enforceable against the whole world.