Director of Lands v. Abad

G.R. No. L-42323 · 1935-05-27 · J. GODDARD, J.: · Primary: Civil; Secondary: Remedial

REITERATION

Facts

The Antecedents: Levy Hermanos, Inc. initiated civil case No. 8562 and subsequently caused a notice of attachment to be filed and entered in the day book of the register of deeds of Occidental Negros on January 14, 1931. This attachment affected lot No. 296-A and its improvements. Lot No. 296-A had been previously conveyed in part by George Ramos in June 1929. Later, after segregation, lot No. 296-A was sold by Ramos, through his attorney-in-fact, to Crecenciano Torres on March 5, 1931. On August 14, 1931, La Urbana, Mutual Building and Loan Association, filed a mortgage which was noted on transfer certificate of title No. 13126. The register of deeds failed to note the earlier attachment on the transfer certificate of title and only discovered this omission around April 9, 1932. At this point, the register of deeds filed a motion under section 112 of Act No. 496 to have the annotation of the attachment entered on the transfer certificate of title and to compel La Urbana to surrender the owner's duplicate. Procedural History: Levy Hermanos, Inc., having become the purchaser at an execution sale in civil case No. 8562, filed a motion in the Court of First Instance of Occidental Negros. They sought to have the register of deeds annotate the January 14, 1931 attachment on transfer certificate of title No. 13126, with the original date and time of registration, and to compel La Urbana to surrender the owner's duplicate certificate. The Court of First Instance, presided over by Judge Braulio Bejasa, granted the motion and ordered the annotation. La Urbana appealed this order to the Supreme Court, raising five assignments of error that challenged the validity and effect of the attachment and the court's orders, including the denial of their motion for reconsideration. The Appeal: La Urbana appealed the order of the Court of First Instance of Occidental Negros, assigning five errors. These assignments of error questioned the validity of the attachment, arguing that Crecenciano M. Torres was not the owner of the property at the time of attachment. La Urbana also contended that an attachment noted only in the entry book but not on the title certificate does not constitute a lien on the property described in that certificate. Furthermore, they argued that their mortgage should not be subordinate to the attachment of Levy Hermanos, Inc., as the attachment was not noted on the corresponding certificate of title. La Urbana also asserted that the trial court erred in granting Levy Hermanos, Inc.'s motion instead of denying it, and in denying their subsequent motion for reconsideration.

Issue(s)

Whether the Court of First Instance erred in not declaring the supposed attachment of Levy Hermanos, Inc. null because at the time of the attachment Crecenciano Torres was not the owner of the property attached. Whether an attachment entered in the day/entry book of the register of deeds but not annotated on the certificate of title constitutes a gravamen affecting the registered property. Whether the mortgage of La Urbana is subordinate to the attachment of Levy Hermanos, Inc., despite the attachment not appearing on the certificate of title. Whether the Court of First Instance erred in granting the motion of Levy Hermanos, Inc., to have the annotation entered and to compel surrender of the owner\'s duplicate instead of denying it. Whether the Court of First Instance erred in denying the motion for new trial (mocion de nueva vista) presented by the appellant La Urbana.

Ruling

The Supreme Court, En Banc, affirmed the order of the Court of First Instance without costs. The Court held that the entry of the notice of attachment in the register of deeds\' entry book, with the date and time noted, constituted registration and notice under Act No. 496 (Secs. 51 and 56), and that Levy Hermanos\' attachment had effect as against subsequent instruments; the Court therefore sustained the order requiring annotation of the attachment on the transfer certificate and the surrender of the owner\'s duplicate as appropriate to protect Levy Hermanos\' interests.

Ratio Decidendi

On Whether the attachment was null because Torres was not owner at the time: The Supreme Court examined the conveyances and found that, although an earlier instrument (Exhibit H) conveyed a portion to Torres\' wife, Torres as a married man had an attachable interest in lot No. 296-A on January 14, 1931 as a member of the conjugal partnership. The Court refused to declare the attachment null on the basis that Torres allegedly was not owner; it held that Torres had an attachable interest at the time the notice of attachment was filed. The Court relied on the record showing the sequence of conveyances and the status of Torres within the conjugal partnership to determine attachability. Because an interest existed that could be subjected to attachment, the first assignment of error was overruled. This reasoning emphasizes that formal title on the certificate is not the sole determinant of whether an interest is attachable under the law. The Court therefore affirmed the lower court\'s finding that Levy Hermanos\' attachment was valid as to Torres\' attachable interest. On Whether an entry in the register\'s book but not on the certificate constitutes a gravamen: The Court applied Sections 51 and 56 of Act No. 496 and prior authority to hold that registration in the entry book is "notice to all" and "shall be regarded as registered from the time so noted." The Court explicitly relied on its prior decision in G.R. No. 41342 to apply the principle that inscription in the registry\'s books produces the effects the law gives to registration and that notation on the certificate is not the sole operative act for notice. The Court reasoned that the statutory scheme contemplates the registries\' entry book as the formal receptacle of registration and that persons are charged with notice from the time of entry. It observed that the language of the cited sections is plain and unqualified and therefore controls the legal effect of the registration. The Court concluded that the absence of annotation on the certificate due to register\'s omission does not negate the legal effect of the earlier entry in the day book. On Whether La Urbana\'s mortgage is subordinate to Levy\'s attachment: The Court held that priority is determined by the time of registration and that Levy\'s attachment, being timely entered in the register\'s entry book, took precedence over the later mortgage. The Court acknowledged La Urbana\'s legitimate expectation to rely on the register of deeds\' proper performance but stressed that the register\'s failure to annotate did not defeat Levy\'s preexisting registrational priority under Sections 51 and 56. The Court emphasized the protective policy of the Torrens system and quoted the Quimson v. Suarez principle that a person dealing with the owner of registered land is not bound to go behind the certificate; nevertheless the statutory entry is what gives notice. The Court thus concluded that La Urbana\'s mortgage was subject to the attachment already registered by Levy Hermanos. On Whether granting Levy\'s motion was erroneous: The Court found no error in ordering the register of deeds to annotate the transfer certificate with the attachment and in compelling surrender of the owner\'s duplicate so that the annotation could be made with the original date and time of registration. The Court reasoned that such relief was authorized by section 112 of Act No. 496 and was necessary to safeguard the interests of the party who had lawfully registered an attachment. It further considered the register\'s negligence and the equities involved, concluding that ordering annotation to reflect the true time of original registration corrects the registry record and vindicates the rights arising from the earlier registration. The Court therefore affirmed the grant of the motion. On Denial of the Motion for New Trial by La Urbana: The Court treated the assignments together and found no basis for setting aside the order or for granting a new trial; the legal effect of Levy\'s timely entry in the register of deeds\' books remained controlling under Act No. 496. The Court reasoned that La Urbana\'s arguments amounted to attempting to rely upon the register\'s omission to obtain priority, which the statutory scheme does not permit when the attachment was properly entered in the registry\'s books. The denial of the motion for new trial was therefore upheld as the underlying ruling on registration and notice was legally sound and consistent with precedent. The Court affirmed the lower court\'s exercise of authority under the Land Registration Law to correct the registry record and protect Levy Hermanos\' rights.

Main Doctrine

Registration of an instrument in the entry book of the register of deeds is notice to all under Act No. 496 (Secs. 51 and 56) and is effective from the time so noted; a person dealing with the owner of registered land is not bound to go behind the certificate of title.