SECOND DIVISION

[G.R. No. 107653. February 5, 1996]

FELIPA GARBIN, petitioner, vs. THE HONORABLE COURT OF APPEALS (FORMER TENTH DIVISION) and SPOUSES ANTONIO JULIAN and CASIMIRA GARBIN, respondents. DECISION ROMERO, J.: This is a petition for review on certiorari of the decision of the Court of Appeals reversing the Regional Trial Court of Tarlac, Tarlac which had earlier dismissed the complaint for annulment of sale filed by private respondents. The facts are the following: Pablo Garbin and Leoncia Garbin are the parents of petitioner Felipa Garbin (Felipa) and private respondent Casimira Garbin (Casimira) married to private respondent Antonio Julian. Pablo Garbin is the original owner of Lot 12712, Camiling, Tarlac Cadastre with an area of 25,681 square meters, title thereto being evidenced by Original Certificate of Title No. 33251. On October 31, 1955, Pablo Garbin and his wife Leoncia executed a Deed of Absolute Sale of Real Estate purportedly conveying to private respondent Casimira Garbin the undivided northern half of the said lot. Casimira then registered an adverse claim over the property. On May 24, 1970, Pablo Garbin sold the entire Lot 12712, including the northern portion, to petitioner Felipa by virtue of a Deed of Sale. Consequently, Transfer Certificate of Title No. 88932 was issued in favor of Felipa. On July 29, 1974, Felipa and Pablo Garbin filed an ejectment case against private respondent spouses. In that case, the Municipal Trial Court of Camiling, Tarlac decided against private respondents. They appealed the case to the Regional Trial Court of Tarlac which affirmed the questioned decision. Private respondents then filed a petition for review with the Court of Appeals, but said petition was dismissed. They questioned the dismissal in this Court docketed as G.R. No. 59817 but the petition was denied due course. On March 1, 1982, before judgment could become final in the ejectment case, private respondents filed a complaint for annulment of sale, partition and damages with the Regional Trial Court of Tarlac. The issue presented therein was whether or not private respondents, as the alleged first vendees in a double sale, (who annotated the same as an adverse claim on the covering title) have a superior right over petitioner, the subsequent vendee (who received a transfer certificate of title for the entire lot despite prior inscription of the adverse claim). The RTC ruled in favor of petitioner and dismissed the complaint. Aggrieved, private respondents went to the Court of Appeals which reversed and set aside the decision of the trial court. The appellate court said: x x x it is Our view, and so We hold, that, at the very least, the inscription of the adverse claim of plaintiffsappellants on vendor Pablo Garbins OCT No. 33251 did constitute a sufficient notice to the whole world, defendant-appellee Felipa Garbin included, - that the northern half of subject Lot 12712 was deeded out by the registered owner to plaintiffs-appellants. Therefore, defendant-appellee is a buyer in bad faith, with full awareness of the prior sale of the northern half of Lot 12712 to her sister Casimira Garbin, and consequently, the

registration of the sale in favor of defendant-appellee did not cleanse her bad faith and the legal consequences thereof, and did not vest in her (appellee) the ownership over the northern half of Lot 12712, as against the first buyer thereof, plaintiff-appellant Casimira Garbin. It is well-settled that in a double sale of real property, ownership thereof shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property (2nd paragraph, Article 1544, New Civil Code of the Philippines). Under this applicable provision of law, mere registration of the sale of real or immovable property is not enough. The good faith of the buyer registering the sale must concur. In the case of defendant-appellee she cannot be considered in good faith, within legal contemplation, and her profession of innocence or lack of knowledge of the prior sale is incredible and unworthy of belief. To be sure, the annotation of plaintiffsappellants adverse claim on the title of vendor Pablo Garbin made defendant-appellee fully aware of such earlier sale. As regards the defense of prescription or laches invoked by defendant-appellee to defeat the claim of plaintiffsappellants over the portion of land in question: We find the same equally undeserving of serious consideration. Considering that before instituting this action on March 2, 1982, plaintiffs-appellants were pre-occupied with the ejectment proceedings commenced against them by defendant-appellee on July 29, 1970; it cannot be said, then, that plaintiffs-appellants slumbered on their rights and had failed to assert their claim seasonably. As a matter of fact, even during the pendency of the ejectment case they did find time to initiate this case under consideration. Plaintiffs-appellants having been busy defending themselves in said ejectment case against them; their inability to file the present action sooner is understandable. It should be borne in mind that the running of the period of prescription is capable of interruption. And, to repeat; during the pendency of the ejectment case aforementioned; We believe that the running of the period of prescription of plaintiffs-appellants cause of action had been interrupted. As regards the equitable principle of laches, the attendant facts and circumstances come to the fore. Whether or not laches set in depends on the surrounding facts and circumstances. Here, We believe that plaintiffs-appellants have not faltered or failed for an unreasonable length of time to assert their claim of ownership. With respect to the southern half of Lot 12712; plaintiffs-appellants stance is also meritorious. When the wife of Pablo Garbin died, her estate was transmitted by operation of the law on intestate succession to plaintiff-appellant Casimira Garbin, defendant-appellee Felipa Garbin, and surviving spouse Pablo Garbin. So, when Pablo Garbin executed the deed of sale in favor of defendant-appellee, he could only convey to the latter his undivided share therein, which was 4/6 of the southern portion of Lot 12712 because as hereinabove pointed out, the northern half of the said lot was effectively conveyed to plaintiffs-appellants, so that he could only dispose of 4/6 of the southern portion. Plaintiff-appellant Casimira Garbin inherited 1/6, and the remaining 1/6 of the southern portion went to defendant-appellee as her inheritance from their mother. Therefore, plaintiffs-appellants own 7/12 of Lot 12712 while defendant-appellee owns 5/12; the northern half being equivalent to 6/12, and out of the other 6/12, Pablo Garbin conveyed 4/12 to appellee Felipa Garbin, who inherited 1/12 in her own right. Plaintiff-appellant Casimira Garbin also inherited 1/12 which portion added to what appellants bought from Pablo Garbin, made appellants area 7/12 of Lot 12712. WHEREFORE, the decision appealed from is hereby SET ASIDE; the sale by Pablo Garbin to defendant-appellee Felipa Garbin of the entire Lot 12712, Camiling, Tarlac Cadastre (Exh. B) is hereby declared null and void and without force and effect, and the resulting TCT No. T-88932 of the latter (Exh. C) is ordered canceled; plaintiffs appellants are adjudged the owners pro-indiviso of seven-twelfth (7/12), including the northern half, of the said lot, with defendant-appellee as the owner of the remaining five-twelfth (5/12) southern portion thereof. To avoid multiplicity of suits; the plaintiffs-appellants and defendant-appellee are hereby given thirty (30) days from finality of this disposition, to submit to the trial court of origin a scheme of partition for subject lot on the basis of their undivided co-ownership of seven-twelfth (7/12) and five-twelfth (5/12), respectively; otherwise,

pursuant to Rule 69, Revised Rules of Court, the lower court shall by order appoint not more than three (3) competent and disinterested commissioners to effect the partition in accordance herewith. Costs against defendant-appellee. SO ORDERED. Petitioner, before this Court, now questions the appellate courts decision stating that: 1. No evidence has been presented by private respondents to prove the validity of the Deed of Absolute sale of Real Estate executed in their favor by Pablo Garbin. 2. The annotation on the title of the adverse claim is not sufficient to prove validity of the said claim. 3. Pablo Garbin himself repudiated the alleged sale to private respondent spouses in testimony before the trial court in the ejectment case, denying knowledge of the sale of subject property to them. 4. Pablo Garbin solely owned the subject lot, as shown by the Original Certificate of Title, and thus the property could not be considered conjugal. 5. Private respondents cause of action had already prescribed. We find the petition meritorious. The central issue to be resolved here is: does the registration of the said adverse claim by private respondents prevail over the title of petitioner which was registered subsequent to the adverse claim? Considering the circumstances peculiar to the present case, we must rule in the negative. Sec. 110 of Act No. 496 (otherwise known as the Land Registration Act) states: whoever claims any right or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in the Land Registration Act for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, and a reference to the volume and page of the certificate of title of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse claimants residence, and designate a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim, and the court, upon a petition of any party in interest shall grant a speedy hearing upon the question of the validity of such adverse claim and shall enter such decree therein as justice and equity may require. If the claim is adjudged to be invalid, the registration shall be canceled. If in any case the court after notice and hearing finds that a claim thus registered was frivolous or vexatious, it may tax the adverse claimant double or treble costs in its discretion. ( Italics supplied) The purpose of the annotation of an adverse claim is to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for by the Land Registration Act, and serve as a notice and warning to third parties dealing with said property that someone is claiming an interest [1] on the same or a better right than the registered owner. It is undisputed that the adverse claim of private respondents was registered pursuant to Sec. 110 of Act No. 496, the same having been accomplished by the filing of a sworn statement with the Register of Deeds of the province where the property was located. However, what was registered was merely the adverse claim and not the Deed of Sale, which supposedly conveyed the northern half portion of the subject property. Therefore, there is still need to resolve the validity of the adverse claim in separate proceedings, as

there is an absence of registration of the actual conveyance of the portion of land herein claimed by private respondents. From the provisions of the law, it is clear that mere registration of an adverse claim does not make such claim valid, nor is it permanent in character. More importantly, such registration does not confer instant title of [2] ownership since judicial determination on the issue of the ownership is still necessary. Regarding the alleged Deed of Sale by Pablo Garbin in favor of private respondents, the trial court correctly observed: On the assumption that the deed in favor of the plaintiffs was presented for registration as claimed, it should, however, be underscored that the entry in the day book is but a preliminary step of registration, the actual annotation of the memorandum or the issuance of a new certificate of title being the final step to accomplish registration. In Pilapil v. CA, we said: To affect the land sold, the presentation of the Deed of Sale and its entry in the day book must be done with the surrender of the owners duplicate of the certificate of title. Considering further that Pablo Garbin himself denied the sale of the subject property, it is evident that the sale never transpired. In view of the above, the entry in the day book automatically loses force and effect. Thus, it is the Deed of Sale that petitioner registered in her favor and the Transfer Certificate of Title subsequently obtained over the property, which has a superior right thereon. As regards the issue of the ownership by Pablo Garbin of the property, the Original Certificate of Title clearly states that he is the sole owner thereof. There is no basis, therefore, for the ruling of the appellate court that said property is conjugal in character and also for its computation of the shares that Pablo Garbin could dispose of when he executed the Deed of Sale on May 24, 1970 to Felipa. Lastly, on the issue of prescription, we agree with the trial court which found that the action for annulment of sale had already prescribed. x x x the title of the defendant must be upheld for failure or the neglect of the plaintiffs for an unreasonable and unexplained length of time of more that fifteen (15) years since they registered their adverse claim, or for a period of more than three (3) decades since the execution of the deed of sale in their favor upon which their adverse claim is based, to do that which, by exercising diligence, could or should have been done earlier. For it is this negligence or omission to assert a right within reasonable time that is construed that plaintiffs had abandoned their right to claim ownership under the deed of sale, or declined to assert it. Thus, when a person slept in his rights for 28 years from the time of the transaction, before filing the action amounts to laches which cannot be excused even by ignorance resulting from unexcusable negligence (Vda. de Lima vs. Tiu, 52 SCRA 516*1970+). Private respondents, having waited for 36 long years before flung an action to annul the sale to Felipa in the trial court we hold that this constitutes laches. The unexplained interval of 29 years that the plaintiffs allowed to elapse before making any claim or instituting action constitutes laches that places them in estoppel to question the validity of the probate courts order and of [4] the sale executed in pursuant thereof. WHEREFORE, the decision of the Court of Appeals is hereby SET ASIDE and that of the Regional Trial Court REINSTATED. Private respondents complaint for annulment of sale is hereby DISMISSED.
[3]

SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-19248 February 28, 1963

ILUMINADO HANOPOL, plaintiff-appellant, vs. PERFECTO PILAPIL, defendant-appellee. Jesus P. Narvios for plaintiff-appellant. Estacion & Paltriquerra for defendant-appellee. BARRERA, J.: This is a case of double sale of the same parcel of unregistered land decided by the Court of First Instance of Leyte (Civil Case No. 21) in favor of defendant-appellee Perfecto Pilapil, originally appealed by plaintiff-appellant Iluminado Hanopol to the Court of Appeals, but later certified to this Court for proper adjudication, the issues involved being exclusively of law. Appellant Hanopol claims ownership of the land by virtue of a series of purchases effected in 1938 by means of private instruments, executed by the former owners Teodora, Lucia, Generosa, Sinforosa and Isabelo, all surnamed Siapo. Additionally, he invokes in his favor a decision rendered by the Court of First Instance of Leyte (in Civil Case No. 412) on a complaint he filed on June 16, 1948, against the same vendors, who, according to his own averments, took possession of the said property in December, 1945 through fraud, threat and intimidation, pretending falsely to be the owners thereof and ejecting the tenants of Hanopol thereon, and since then had continued to possess the land. Decision declaring him the exclusive owner of the land in question and ordering therein defendants to deliver possession thereof was rendered on September 21, 1958. On the other hand, appellee Pilapil asserts title to the property on the strength of a duly notarized deed of sale executed in his favor by the same owners on December 3, 1945, which deed of sale was registered in the Registry of Deeds of Leyte on August 20, 1948 under the provisions of Act No. 3344. Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1wph1.t The case was submitted for decision without any testimonial evidence, both parties relying exclusively on their documentary evidence consisting, on the part of Hanopol, of the private instruments alluded to and a copy of the decision in the reivindicatory case, and on the part of Pilapil, the notarized deed of sale in his favor bearing annotation of its registration under Act No. 3344. As thus submitted, the trial court rendered the decision adverted 1 to at the beginning of this opinion, mainly upon the authority of the second paragraph of Article 1544 of the New Civil Code, which is a reproduction of Article 1473 of the old Civil Code, the law in force at the time the transaction in this case took place. Appellant Hanopol in his appeal from the decision of the trial court presents two questions of law; firstly, whether or not the judgment in the former case No. 412 against the vendors Siapos is binding upon the defendant-appellee as their successor-in-interest; and secondly, whether or not the registration of the second deed of sale in favor of appellee Pilapil affects his right as the first vendee.

Under the first assignment of error, the appellant contends that inasmuch as appellee claims to be the successorin-interest of the vendors, he is bound by the judgment rendered against the latter. This contention is without merit, because it appears from the documentary evidence that appellee Pilapil derived his right to the land from the sale to him of the said property on December 3, 1945, long before the filing of the complaint against the vendors in 1948. He was not made a party in the case against the Siapos, and there was not even a claim that he had knowledge of said litigation. He cannot, therefore, be bound by such judgment in view of the provision of paragraph (b), Section 44 of Rule 39 of the Rules of Court which speaks of the effect of judgment as follows: ... the judgment so ordered is, in respect to the matter directly adjudged, conclusive between the parties and their successors in interest by title subsequent to commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity. (Emphasis supplied) Since Pilapil was not a party to the action and is not a successor-in-interest by title subsequent to the commencement of the action, having acquired his title in 1945 and the action filed in 1948, the decision in said case cannot be binding on him. Appellant argues under the second issue raised by him that the registration of Pilapil's notarized deed of sale in 1948 under Act No. 3344 "shall be understood to be without prejudice to a third party with a better right". He contends that since at the time the Siapos sold the land in question in 1945 to Pilapil, the former were no longer the owners as they had already sold the same to appellant since 1938, the first sale to him is a better right which cannot be prejudiced by the registration of the second sale. We do not think the quoted proviso in Act No. 3344 justifies appellant's contention. If his theory is correct, then the second paragraph of Article 1544 of the New Civil Code (formerly Article 1473 of the old Code) would have no application at all except to lands or real estate registered under the Spanish Mortgage Law or the Land Registration Act. Such a theory would thus limit the scope of that codal provision. But even if we adopt this latter view, that is, that Article 1544 (formerly Article 1473) only applies to registered land, still we cannot agree with the appellant that by the mere fact of his having a previous title or deed of sale, he has acquired thereby what is referred to in Act No. 3344 as the "better right" that would be unaffected by the registration of a second deed of sale under the same law. Under such theory, there would never be a case of double sale of the same unregistered property. An example of what could be a better right that is protected against the inscription of a subsequent sale is given in the case of Lichauco v. Berenguer (39 Phil. 643). The facts in that case are succinctly stated in the syllabus thereof as follows: .... In 1882 B sold to S a piece of land. After the sale B continued in the possession of the land in the capacity of lessee of S through payment of rent, and continued as such until his death when he was substituted by the administrator of his property. In 1889 B sold again the same piece of land to L who leased it to B himself under certain conditions. Both sales were executed in a public instrument, the one executed in favor of L being registered only in 1907. Thus, S and L acquired possession of the land through the same vendor upon the latter's ceasing to be the owner and becoming the lessee of said S and L, respectively. HELD: (1) That, with reference to the time prior to 1907, the preference should be in favor of the purchaser who first took possession of the land, because this possession, according to the law in force prior to the promulgation of the Civil Code, constituted the consummation of the contract, and also because afterwards the Civil Code expressly establishes that possession in such cases transfers the ownership of the thing sold. (2) That, when a person buys a piece of land and, instead of taking possession of it, leases it to the vendor, possession by the latter after the sale is possession by the vendee, and such possession, in case of a double sale, determines the preference in favor of the one who first took possession of it, in the absence of inscription, in accordance with the provision of article 1473 of the Civil Code, notwithstanding the material and personal possession by the second vendee. (Bautista vs. Sioson, 39 Phil. Rep., 615)

.... Because L had to receive his possession from B who was a mere lessee of S and as such had no possession to give, inasmuch as his possession was not for himself but in representation of S, it follows that L never possessed the land.. .... The effect which the law gives to the inscription of a sale against the efficacy of the sale which was not registered is not extended to other titles which the other vendee was able to acquire independently as, in this case, the title by prescription. It thus appears that the "better right" referred to in Act No. 3344 is much more than the mere prior deed of sale in favor of the first vendee. In the Lichauco case just mentioned, it was the prescriptive right that had supervened. Or, as also suggested in that case, other facts and circumstances exist which, in addition to his deed of sale, the first vendee can be said to have better right than the second purchaser. In the case at bar, there appears to be no clear evidence of Hanopol's possession of the land in controversy. In fact, in his complaint against the vendors, Hanopol alleged that the Siapos took possession of the same land under claim of ownership in 1945 and continued and were in such possession at the time of the filing of the complaint against them in 1948. Consequently, since the Siapos were in actual occupancy of the property under claim of ownership, when they sold the said land to appellee Pilapil on December 3, 1945, such possession was transmitted to the latter, at least constructively, with the execution of the notarial deed of sale, if not actually and physically as claimed by Pilapil in his answer filed in the present case. Thus, even on this score, Hanopol cannot have a better right than appellee Pilapil who, according to the trial court, "was not shown to be a purchaser in bad faith". WHEREFORE, finding no error in the decision appealed from, the same is hereby affirmed, with costs against the appellant. So ordered.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 83432 May 20, 1991 RADIOWEALTH FINANCE COMPANY, petitioner, vs. MANUELITO S. PALILEO, respondent. Rolando A. Calang for petitioner. Sisenando Villaluz, Sr. for respondent. GANCAYCO, J.:p If the same piece of land was sold to two different purchasers, to whom shall ownership belong? Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith. There is no ambiguity regarding the application of the law with respect to lands registered under the Torrens System. Section 51 of Presidential Decree No. 1529 (amending Section 50 of Act No. 496 clearly provides that the act of registration is the operative act to convey or affect registered lands insofar as third persons are concerned. Thus, a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which 1 are noted on the face of the register or certificate of title. Following this principle, this Court has time and again held that a purchaser in good faith of registered land (covered by a Torrens Title) acquires a good title as against all 2 the transferees thereof whose right is not recorded in the registry of deeds at the time of the sale. The question that has to be resolved in the instant petition is 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 ownerthe 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. The facts as found by the Court of Appeals are as follows: 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 sale is evidenced by a notarized Deed of Absolute Sale (Exh. "E"). The deed was not registered in the Registry of Property for unregistered lands in the province of Surigao del Norte. Since the execution of the deed of sale, appellee Manuelito Palileo who was then employed at Lianga Surigao del Sur, exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix or overseer. Appellee has continuously paid the real estate taxes on said land from 1971 until the present (Exhs. "C" to "C-7", inclusive). On November 29, 1976, a judgment was rendered against defendant Enrique T. Castro, in Civil Case No. 0103145 by the then Court of First Instance of Manila, Branch XIX, 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 from November 2, 1975 until fully paid, and the further sum of P2,235.03 as attorney's fees, and to pay the costs. Upon the finality of the judgment, a writ of execution was issued. Pursuant to said writ, defendant provincial Sheriff

Marietta E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, 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. After the period of redemption has ( sic) expired, a deed of final sale was also executed by the same Provincial Sheriff. Both the certificate of sale and the deed of final sale were registered 3 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. Hence, this petition for review on certiorari. In its petition, Radiowealth Finance Company presents the following errors: 1. THE COURT OF APPEALS ERRED IN NOT FINDING THAT THE DEED OF ABSOLUTE SALE (EXHIBIT B) ALLEGEDLY EXECUTED BY ENRIQUE CASTRO IN FAVOR OF APPELLEE MANUELITO PALILEO, WAS SIMULATED OR FICTITIOUS. 2. THE COURT OF APPEALS ERRED IN NOT FINDING APPELLEE MANUELITO PALILEO AS ADMINISTRATOR ONLY OF THE DISPUTED PROPERTY; AND 3. THE COURT OF APPEALS ERRED IN NOT FINDING DEFENDANT-APPELLANT RADIOWEALTH FINANCE COMPANY OWNER OF THE DISPUTED PROPERTY BY REASON OF THE CERTIFICATE OF SALE AND THE DEED OF FINAL SALE WHICH WERE ALL REGISTERED IN THE REGISTER OF DEEDS, HENCE, SUPERIOR TO THAT OF THE DEED OF SALE IN 4 POSSESSION OF MANUELITO PALILEO, FOR BEING NOT REGISTERED. As regards the first and second assigned errors, suffice it to state that findings of fact of the Court of Appeals are conclusive on this Court and will not be disturbed unless there is grave abuse of discretion. The finding of the Court of Appeals that the property in question was already sold to private respondent by its previous owner before the execution sale is evidenced by a deed of sale. Said deed of sale is notarized and is presumed authentic. There is no substantive proof to support petitioner's allegation that the document is fictitious or simulated. With this in mind, We see no reason to reject the conclusion of the Court of Appeals that private respondent was not a mere administrator of the property. That he exercised acts of ownership through his mother also remains undisputed. Going now to the third assigned error which deals with the main issue presented in the instant petition, We observe that the Court of Appeals resolved the same in favor of private respondent due to the following reason; what the Provincial Sheriff levied upon and sold to petitioner is a parcel of land that does not belong to Enrique Castro, the judgment debtor, hence the execution is contrary to the directive contained in the writ of execution 5 which commanded that the lands and buildings belonging to Enrique Castro be sold to satisfy the execution. There is no doubt that had the property in question been a registered land, this case would have been decided in favor of petitioner since it was petitioner that had its claim first recorded in the Registry of Deeds. For, as already mentioned earlier, it is the act of registration that operates to convey and affect registered land. Therefore, a bona fidepurchaser of a registered land at an execution sale acquires a good title as against a prior transferee, if such transfer was unrecorded. However, it must be stressed that this case deals with a parcel of unregistered land and a different set of rules applies. We affirm the decision of the Court of Appeals. 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.

The case of Carumba vs. Court of Appeals is a case in point. It was held therein that Article 1544 of the Civil Code has no application to land not registered under Act No. 496. Like in the case at bar, Carumba dealt with a double sale of the same unregistered land. The first sale was made by the original owners and was unrecorded while the second was an execution sale that resulted from a complaint for a sum of money filed against the said original 7 owners. Applying Section 35, Rule 39 of the Revised Rules of Court, this Court held that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the execution sale though the latter was a buyer in good faith and even if this second sale was registered. 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. Applying this principle, the Court of Appeals correctly held that 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. WHEREFORE, in view of the foregoing, the decision of the Court of Appeals in CA-G.R. CV No. 10788 is hereby AFFIRMED. No costs. SO ORDERED.