Dagupan Trading Co. v.

Macam

Facts:

In 1955, Sammy Maron and his siblings were pro indiviso owners of a parcel of unregistered land in
Binmaley, Pangasinan. While their application for registration was pending, they executed two deeds of
sale coveying the property to Dagupan Trading Co., who thereafter took possession and introduced
substantial improvements therein. A month later, and OCT covering the land was issued in the name of
the Marons, free from all liens and emcumbrances.

In 1956, by virtue of a final judgment in a civil case against Sammy Maron in favor of the Manila Trading
and Supply Company, levy was made upon whatever interest he had in the property, and thereafter said
interest was sold at public auction to the judgment creditor. The Marons did not exercise their right of
redemption, and the corresponding notice of levy, certificate of sale and the Sheriff’s certificate of final
sale in favor of the Manila Trading and Supply Co. were duly registered. In 1958, the latter sold all its
rights, and title to the property to Rustico Macam. Dagupan Trading then commenced an action against
the latter, praying that it be declared owner of one eighth portion of the land and that a partition of the
whole property be made.

Both the trial court and the appellate court dismissed Dagupan Trading’s complaint.

Issue:

Whether Dagupan Trading has better rights over the property.

Ruling:

Yes, Dagupan Trading has better rights over the property.

The sale in favor of Macam was executed before the land was registered, while the conflicting sale in
favor of Dagupan Trading was executed after the same property had been registered. What should
determine the issue is the last paragraph of Section 35, Rule 39 of the Rules of Court (now Section 33,
Rule 39 of the 1997 Rules of Civil Procedure) stating that upon the execution and delivery of the final
certificate of sale in favor of the purchaser of land sold in an execution sale, such purchaser shall be
substituted to and acquire all the right, title, interest and claim of the judgment debtor to the property as
of the time of the levy. However, since a considerable time prior to the levy has lapsed since Maron
conveyed his interest to Macam fully and irretrievably, he no longer had any interest in the property.
Consequently, the subsequent levy made on the property for the purpose of satisfying the judgment
against Maron was void.

Needless to say, the unregistered sale and the consequent conveyance of title and ownership in favor of
Macam could not have been cancelled and rendered of no effect upon the subsequent issuance of the
Torrens title over the entire parcel of land.