[G.R. No. 133303. February 17, 2005] On 14 August 1996, petitioner filed a third-party claim in Civil Case No.
5748 to discharge or annul the attachment levied on the property covered by
BERNARDO VALDEVIESO, petitioner, vs. CANDELARIO DAMALERIO AND
AUREA C. DAMALERIO, respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review under Rule 45 of the Rules of Court,
seeking to set aside the 25 September 1997 Decision and the 10 February 1998
Resolution of the Court of Appeals in CA-G.R. SP No. 43082 entitled, Candelario
Damalerio and Aurea Damalerio v. Honorable Antonio S. Alano, et al.[1]
There is no dispute as to the following facts:
On 05 December 1995, Bernardo Valdevieso (petitioner) bought from
spouses Lorenzo and Elenita Uy a parcel of land consisting of 10,000 square
meters, more or less, located at Bo. Tambler, General Santos City, and covered
by Transfer Certificate of Title (TCT) No. T-30586.[2]
The deed of sale was not registered, nor was the title of the land
transferred to petitioner.[3]
On 07 December 1995, the said property was immediately declared by
petitioner for taxation purposes as Tax Declaration No. l6205 with the City
Assessors Office.[4]
It came to pass that on 19 April 1996, spouses Candelario and Aurea
Damalerio (respondents) filed with the Regional Trial Court (RTC) of General
Santos City, a complaint for a sum of money against spouses Lorenzo and Elenita
Uy docketed as Civil Case No. 5748 with application for the issuance of a Writ
of Preliminary Attachment.[5]
On 23 April 1996, the trial court issued a Writ of Preliminary Attachment by
virtue of which the property, then still in the name of Lorenzo Uy but which had
already been sold to petitioner, was levied. The levy was duly recorded in the
Register of Deeds of General Santos City and annotated upon TCT No. T-
30586.[6]
On 06 June 1996, TCT No. T-30586 in the name of Lorenzo Uy was
cancelled and, in lieu thereof, TCT No. T-74439 was issued in the name of
petitioner.[7] This new TCT carried with it the attachment in favor of respondents.
TCT No. T-74439 on the ground that the said property belongs to him and no
longer to Lorenzo and Elenita Uy.[8]
In a resolution dated 21 October 1996, the trial court ruled for the
petitioner.[9] Citing Manliguez v. Court of Appeals[10] and Santos v. Bayhon,[11] it
held that the levy of the property by virtue of attachment is lawful only when the
levied property indubitably belongs to the defendant. Applying the rulings in the
cited cases, it opined that although defendant Lorenzo Uy remained the
registered owner of the property attached, yet the fact was that he was no
longer the owner thereof as it was already sold earlier to petitioner, hence, the
writ of attachment was unlawful.
Respondents sought reconsideration thereof which was denied by the trial
court in a resolution dated 03 January 1997.[12]
From the unfavorable resolution of the trial court in the third-party claim,
respondents appealed to the Court of Appeals. The appellate court reversed the
resolution and by judgment promulgated on 25 September 1997, it declared
that an attachment or levy of execution, though posterior to the sale, but if
registered before the sale is registered, takes precedence over the sale.[13] The
writ of attachment in favor of the respondents, being recorded ahead of the sale
to petitioner, will therefore take precedence.
Petitioner moved for reconsideration but this was denied by the Court of
Appeals in its Resolution of 10 February 1998.[14]
Hence, this Petition for Review on Certiorari.
The sole issue in this case is whether or not a registered writ of attachment
on the land is a superior lien over that of an earlier unregistered deed of sale.
Petitioner maintains that he has a superior right over the questioned
property because when the same was attached on 23 April 1996, this property
was no longer owned by spouses Uy against whom attachment was issued as it
was already sold to petitioner on 05 December 1995. The ownership thereof was
already transferred to petitioner pursuant to Article 1477[15] in relation to Article
1498[16] of the Civil Code.
Dismissing the allegation that he slept on his rights by not immediately
registering at least an adverse claim based on his deed of sale, petitioner avers
that he promptly worked out for the transfer of registration in his name. The slight
delay in the registration, he claims was not due to his fault but attributable to the
process involved in the registration of property such as the issuance of the
Department of Agrarian Reform clearance which was effected only after
compliance with several requirements.
 Considering the peculiar facts and circumstances obtaining in this case,
petitioner submits it would be in accord with justice and equity to declare him as
having a superior right to the disputed property than the respondents.
Respondents maintain the contrary view. They aver that registration of a
deed of sale is the operative act which binds the land and creates a lien thereon.
Before the registration of the deed, the property is not bound insofar as third
persons are concerned. Since the writ of attachment in favor of respondents was
registered earlier than the deed of sale to petitioner, respondents were of the
belief that their registered writ of attachment on the subject property enjoys
preference and priority over petitioners earlier unregistered deed of sale over
the same property. They also contend that Articles 1477 and 1498 of the Civil
Code as cited by petitioner are not applicable to the case because said
provisions apply only as between the parties to the deed of sale. These
provisions do not apply to, nor bind, third parties, like respondents, because what
affects or binds third parties is the registration of the instrument in the Register of
Deeds. Furthermore, respondents argue that petitioner cannot invoke equity in his
favor unless the following conditions are met: (a) the absence of specific provision
of a law on the matter; and (b) if the person who invokes it is not guilty of delay.
Both conditions have not been met, however, since there is a law on the subject
matter, i.e., Section 51 of Presidential Decree No. 1529, and that petitioner
allegedly slept on his rights by not immediately registering an adverse claim
based on his deed of sale.
We agree with the respondents.
The law applicable to the facts of this case is Section 51 of P.D. No. 1529.
Said Section provides:
Sec. 51. Conveyance and other dealings by registered owner. - An owner of
registered land may convey, mortgage, lease, charge, or otherwise deal with the
same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no
deed, mortgage, lease, or other voluntary instrument, except a will purporting to
convey or affect registered land, shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as evidence of
authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land
insofar as third persons are concerned, and in all cases under this Decree, the
registration shall be made in the office of the Register of Deeds for the province
or city where the land lies.
It is to be noted that though the subject land was deeded to petitioner as
early as 05 December 1995, it was not until 06 June 1996 that the conveyance
was registered, and, during that interregnum, the land was subjected to a levy on
attachment. It should also be observed that, at the time of the attachment of the
property on 23 April 1996, the spouses Uy were still the registered owners of
said property. Under the cited law, the execution of the deed of sale in favor of
petitioner was not enough as a succeeding step had to be taken, which was the
registration of the sale from the spouses Uy to him. Insofar as third persons are
concerned, what validly transfers or conveys a persons interest in real property is
the registration of the deed. Thus, when petitioner bought the property on 05
December 1995, it was, at that point, no more than a private transaction
between him and the spouses Uy. It needed to be registered before it could bind
third parties, including respondents. When the registration finally took place on
06 June 1996, it was already too late because, by then, the levy in favor of
respondents, pursuant to the preliminary attachment ordered by the General
Santos City RTC, had already been annotated on the title.
The settled rule is that levy on attachment, duly registered, takes preference
over a prior unregistered sale.[17] This result is a necessary consequence of the
fact that the property involved was duly covered by the Torrens system which
works under the fundamental principle that registration is the operative act which
gives validity to the transfer or creates a lien upon the land.[18]
The preference created by the levy on attachment is not diminished even by
the subsequent registration of the prior sale. This is so because an attachment is a
proceeding in rem.[19] It is against the particular property, enforceable against
the whole world. The attaching creditor acquires a specific lien on the attached
property which nothing can subsequently destroy except the very dissolution of
the attachment or levy itself.[20] Such a proceeding, in effect, means that the
property attached is an indebted thing and a virtual condemnation of it to pay
the owners debt.[21] The lien continues until the debt is paid, or sale is had under
execution issued on the judgment, or until the judgment is satisfied, or the
attachment discharged or vacated in some manner provided by law.
Thus, in the registry, the attachment in favor of respondents appeared in the
nature of a real lien when petitioner had his purchase recorded. The effect of the
notation of said lien was to subject and subordinate the right of petitioner, as
purchaser, to the lien. Petitioner acquired ownership of the land only from the
date of the recording of his title in the register, and the right of ownership which
he inscribed was not absolute but a limited right, subject to a prior registered lien
of respondents, a right which is preferred and superior to that of petitioner.[22]
Anent petitioners reliance on the rulings laid down in Manliguez v. Court of
Appeals and Santos v. Bayhon, we find the same to be misplaced. These cases did
not deal at all with the dilemma at hand, i.e. the question of whether or not a
registered writ of attachment on land is superior to that of an earlier unregistered
deed of sale. In Santos, what was involved were machinery and pieces of
equipment which were executed upon pursuant to the favorable ruling of the
National Labor Relations Commission. A third party claimed that the machinery
were already sold to her, but it does not appear in the facts of the case if such
sale was ever registered. Manliguez is similar to Santos, except that the former
involved buildings and improvements on a piece of land. To stress, in both cited
cases, the registration of the sale, if any, of the subject properties was never in
issue.
As to petitioners invocation of equity, we cannot, at this instance, yield to
such principle in the presence of a law clearly applicable to the case. We
reiterate that this Court, while aware of its equity jurisdiction, is first and
foremost, a court of law.[23] While equity might tilt on the side of one party, the
same cannot be enforced so as to overrule positive provisions of law in favor of
the other.[24] Equity cannot supplant or contravene the law.[25] The rule must stand
no matter how harsh it may seem. Dura lex sed lex.
WHEREFORE, the appealed Decision of the Court of Appeals in CA-G.R. SP
No. 43082 dated 25 September 1997, and its Resolution dated 10 February
1998, are hereby AFFIRMED. No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
 charges, attorneys fees and costs of suit. On appeal, the CA affirmed the decision
THE PHILIPPINE COTTON G.R. No. 130389 of the trial court. Not satisfied with the judgment of the appellate court, Pacific
CORPORATION, Mills filed a petition for review before this Court.
Petitioner-Appellant,
Present: During the pendency of the appeal or on June 11, 1988,
the Quezon City Hall was razed by fire thereby destroying the records of the
PUNO, C.J., Chairperson, Registry of Deeds of Quezon City, including the TCTs of Pacific Mills.
- versus - SANDOVAL-GUTIERREZ,
CORONA, Sometime in 1992, Pacific Mills filed a petition for reconstitution of the
AZCUNA, and burned TCTs through administrative reconstitution, in accordance with Republic Act
LEONARDO- DE CASTRO, JJ. No. 6732.[4]On March 23, 1992, the Registry of Deeds of Quezon City issued to
NARAINDAS GAGOOMAL and Pacific Mills the reconstituted TCTs, namely: No. RT-55702 (for TCT No. 136640),
ENGRACIO ANG, No. RT-55704 (for TCT No. 134249), No. RT-55703 (for TCT No. 136441) and
Respondents-Appellees, No. RT-55705 (for TCT No. 222370). However, the aforesaid alleged
annotations of the preliminary attachment in favor of petitioner were not
CHINA BANKING CORPORATION, Promulgated: incorporated in the reconstituted TCTs, but annotated therein was the sale made
Intervenor-Appellee. February 11, 2008 by Pacific Mills to respondents and their payment in full. On even date, the
reconstituted TCTs were cancelled in favor of the respondents. Respondents were
x ---------------------------------------------------------------------------------------- x given the following clean TCT Nos. 56683[5] (for RT-55703), 56684[6] (for RT-
55702), 56685[7] (for RT-55704) and 56686[8] (for RT-55705).

DECISION On February 8, 1993, petitioner wrote the Registry of Deeds of Quezon

AZCUNA, J.:
This is a petition for review on certiorari[1] assailing the Decision[2] of the
Court of Appeals (CA) promulgated on August 29, 1997 in CA-G.R. CV No.
50332.
The facts of record would indicate that Pacific Mills, Inc. (Pacific Mills)
originally owned five parcels of land covered by Transfer Certificates of Title
(TCT) Nos. 136640, 136441, 222370 and 134249. These properties were
subsequently purchased by respondents on an installment basis from Pacific Mills
on July 19, 1979.[3]
On June 23, 1983, petitioner filed a collection case against Pacific Mills
before the Regional Trial Court (RTC) of Pasig, Branch 162 on the ground of
alleged failure to fulfill its obligation under a contract of loan. After hearing, the
trial court issued a writ of preliminary attachment in favor of petitioner.
Thereafter, on August 17, 1983, the writ of preliminary attachment was
annotated on TCT Nos. 136640, 136441, 222370 and 134249.
On December 27, 1985, the RTC of Pasig rendered a decision ordering
Pacific Mills to pay its obligation under the loan agreement plus interest, penalty
City requesting for the annotation of the notice of levy, and, subsequently, the
annotation of a favorable decision of this Court rendered on August 3, 1992, on
the new TCTs issued to respondents.
On February 10, 1993, Samuel C. Cleofe, the Quezon City Register of
Deeds, informed respondents that the letter-request for re-annotation of notice of
levy had been entered in the Primary Entry Book 574/Volume 24, and asked
them to surrender their owners duplicate copies of TCT Nos. 56683 to 56686.[9]
Immediately upon receipt of the said letter, respondents verified the
original copies of titles in the possession of the Registry of Deeds and discovered
that the following annotations were included at the back of the titles: Request for
Re-Annotation of Notice of Levy and Letter Request for Annotation of Entry of
Judgment of Supreme Court.
Thereafter, respondents filed on March 3, 1993, a Petition for the
Cancellation of Annotations in Land Titles before the RTC of Quezon City, Branch
100, docketed as Civil Case No. Q-6056(93). Later on, petitioner was
impleaded as an additional respondent, while China Banking Corporation filed a
complaint-in-intervention for being a mortgagee of the real properties, together
with all the improvements thereon.
 On March 29, 1995, the trial court rendered judgment in favor of
respondents. The dispositive portion of the decision reads:
WHEREFORE, premises above considered, there being
no justification for the Quezon City Register of Deeds in making
the annotation on petitioners original TCT Nos. 56683 (RT-
55703), 56684 (RT-55702), 56685 (RT-55748) and 56686
(RT-55705), said respondent is hereby ordered to DELETE
therefrom the said annotation request for annotation and the
annotated Supreme Court decision against the Pacific Mills, Inc.
and to desist from its request for petitioners to submit their
owners duplicate of titles to annotate such request of the
Philippine Cotton Corporation.
There being no justiciable issue in the complaint-in-
intervention, let the annotations of a mortgage executed by
petitioners on December 18, 1992 in favor of intervenor China
Banking Corporation remain on petitioners subject TCTs.
SO ORDERED.[10]
The trial court ratiocinated that:
Under the circumstances, respondent [the Registry of
Deeds of Quezon City] should and could have properly
refused such request instead of immediately annotating it. In
the same light, The Register of Deeds may likewise properly
refuse registration of an order attachment when it appears that
the title involved is not in the name of the defendant and there
is no evidence submitted to indicate that the said defendant
has any present or future interest in the property covered by
the titles. (Gotauco vs. Register of Deeds of Tayabas, 59 Phil.
756, 1934 and Geonanga vs. Hodges, 55 O.G. p. 2891, April
21, 1958). (Underscoring Supplied)[11]
Unsatisfied with the outcome of the case, petitioner filed a notice of
appeal before the CA, contending that:
THE REGISTER OF DEEDS OF QUEZON CITY HAS THE
AUTHORITY TO RE-ANNOTATE THE NOTICE OF LEVY AND TO
ANNOTATE THE ENTRY OF JUDGMENT OF THE SUPREME
COURT ON TRANSFER CERTIFICATES OF TITLE NOS. 56683,
56684, 56685 AND 56686, ALL ISSUED IN THE NAME OF THE
PETITIONERS-APPELLEES AS A RESULT OF AN ADMINISTRATIVE
RECONSTITUTION OF TITLES.[12]
In its August 29, 1997 decision, the appellate court dismissed the appeal
because the issue raised by the petitioner was a pure question of law, over which
the CA had no jurisdiction.
Hence, this petition.
Petitioner presents the following assignment of errors:
FIRST ERROR
THE LOWER COURT ERRED IN NOT SUSTAINING THE
AUTHORITY OF THE QUEZON CITY REGISTER OF DEEDS TO
VALIDLY RE-ANNOTATE THE INCUMBRANCE/LIENS AND
ANNOTATE THE SUPREME COURT DECISION ON THE
ADMINISTRATIVELY RECONSTITUTED TRANSFER CERTIFICATES
OF TITLES (TCTs) IN FAVOR OF PETITIONER-APPELLANT.
SECOND ERROR
THE LOWER COURT, IN CONSEQUENCE THEREOF, LIKEWISE
ERRED IN ORDERING THE QUEZON CITY REGISTER OF DEEDS
TO DELETE THE ANNOTATION THAT READS: REQUEST FOR
ANNOTATION AND THE ANNOTATED SUPREME COURT
DECISION AGAINST PACIFIC MILLS, INC., FROM PETITIONERS
ORIGINAL TCT NOS. 96683 [sic] (RT-55703), 56684 (RT-
55702), 56685 (RT-55748) AND 56686 (RT-55705) AND TO
DESIST FROM REQUESTING RESPONDENTS/APPELLEES TO
SUBMIT THEIR OWNERS DUPLICATE OF TITLES FOR
ANNOTATION OF PETITIONER PHILIPPINE COTTON
CORPORATIONS REQUEST.[13]
Petitioner asserts that a cursory reading of Section 71 of Presidential
Decree No. 1529 shows that it is the ministerial duty of the Register of Deeds, in
the matter of an attachment or other liens in the nature of involuntary dealing in
registered land, to send notice by mail to a registered owner requesting him to
produce his duplicate certificate so that a memorandum of attachment or other
lien may be made thereon. This provision, according to petitioner, actually
applies whenever a writ of attachment has been issued by a court of competent
jurisdiction after hearing on the issuance of the said writ. The notice of attachment
not having been dissolved, it was ministerial on the part of the Register of Deeds
to record the notice on the TCTs he issued.
Petitioner would persuade this Court that it is the ministerial duty of the
Register of Deeds to record any encumbrance or lien on respondents existing
TCTs. It cites, as proof of its supposition, Sections 10 and 71 of the Property
Registration Decree (P.D. No. 1529), which are quoted as follows:
Section 10. General functions of Registers of
Deeds. The office of the Register of Deeds constitutes a public
repository of records of instruments affecting registered or
unregistered lands and chattel mortgages in the province or
city wherein such office is situated.
It shall be the duty of the Register of Deeds to
immediately register an instrument presented for registration
dealing with real or personal property which complies with all
the requisites for registration. He shall see to it that said
instrument bears the proper documentary and science stamps
and that the same are properly cancelled. If the instrument is
not registrable, he shall forthwith deny registration thereof and
inform the presentor of such denial in writing, stating the
ground or reason therefor, and advising him of his right to
appeal by consulta in accordance with Section 117 of this
Decree.
xxx
Section 71. Surrender of certificate in involuntary
dealings. If an attachment or other lien in the nature of
involuntary dealing in registered land is registered, and the
duplicate certificate is not presented at the time of registration,
the Register of Deeds, shall, within thirty-six hours thereafter,
send notice by mail to the registered owner, stating that such
paper has been registered, and requesting him to send or
produce his duplicate certificate so that a memorandum of the
attachment or other lien may be made thereon. If the owner
neglects or refuses to comply within a reasonable time, the
Register of Deeds shall report the matter to the court, and it
shall, after notice, enter an order to the owner to produce his
certificate at a time and place named therein, and may
enforce the order by suitable process. (Underscoring supplied)
The Court is not in accord with the stance of petitioner. Section 10 of P.D.
No. 1529 merely involves the general functions of the Register of Deeds, while
Section 71 thereof relates to an attachment or lien in a registered land in which
the duplicate certificate was not presented at the time of the registration of the said
lien or attachment.
A special law specifically deals with the procedure for the reconstitution
of Torrens certificates of title lost or destroyed. Under Section 4 of Act No. 26:[14]
Liens and other encumbrances affecting a destroyed
or lost certificate of title shall be reconstituted from such of the
sources hereunder enumerated as may be available, in the
following order:
(a) Annotations or memoranda appearing on
the owners, co-owners, mortgagees or lessees
duplicate;
(b) Registered documents on file in the
registry of deeds, or authenticated copies
thereof showing that the originals thereof had
been registered; and
(c) Any other document which, in the
judgment of the court, is sufficient and
proper basis for reconstituting the liens or
encumbrances affecting the property covered
by the lost or destroyed certificate of title.
(Underscoring supplied)
Furthermore, Sections 8 and 11 of the same Act provide for the
procedure for the notation of an interest that did not appear in the reconstituted
certificate of title, mandating that a petition be filed before a court of competent
jurisdiction:
Section 8. Any person whose right or interest was duly
noted in the original of a certificate of title, at the time it was lost
or destroyed, but does not appear so noted on the reconstituted
certificate of title, which is subject to the reservation provided in
the preceding section, may, while such reservation subsists, file
a petition with the proper Court of First Instance for the
annotation of such right or interest on said reconstituted
certificate of title, and the court, after notice and hearing, shall
 determine the merits of the petition and render such judgment
as justice and equity may require. The petition shall state the
number of the reconstituted certificate of title and the nature,
as well as a description, of the right or interest claimed.
(Underscoring supplied)
xxx
Section 11. Petitions for reconstitution of registered
interests, liens and other encumbrances, based on sources
enumerated in sections 4(b) and/or 4(c) of this Act, shall be
filed, by the interested party, with the proper Court of First
Instance. The petition shall be accompanied with the necessary
documents and shall state, among other things, the number of
the certificate of title and the nature as well as a description of
the interest, lien or encumbrance which is to be reconstituted,
and the court, after publication, in the manner stated in section
nine of this Act, and hearing shall determine the merits of the
petition and render such judgment as justice and equity may
require. (Underscoring supplied)
Clearly, therefore, it is not the ministerial function of the Register of
Deeds to record a right or an interest that was not duly noted in the reconstituted
certificate of title. As a matter of fact, this task is not even within the ambit of the
Register of Deeds job as the responsibility is lodged by law to the proper courts.
The foregoing quoted provisions of the law leave no question nor any doubt that
it is indeed the duty of the trial court to determine the merits of the petition and
render judgment as justice and equity may require.
This conclusion is bolstered by Chapter X,[15] Section 108 of P.D. No.
1529, which provides:
Sec. 108. Amendment and alteration of certificates. No
erasure, alteration, or amendment shall be made upon the
registration book after the entry of a certificate of title or of a
memorandum thereon and the attestation of the same by the
Register of Deeds, except by order of the proper Court of
First Instance. A registered owner or other person having an
interest in registered property, or, in proper cases, the
Register of Deeds with the approval of the Commissioner of
Land Registration, may apply by petition to the court upon
the ground that the registered interests of any description,
whether vested, contingent, expectant inchoate appearing
on the certificate, have terminated and ceased; or that new
interest not appearing upon the certificate have arisen or
been created; or that an omission or error was made in
entering the certificate or any memorandum thereon, or on
any duplicate certificate; or that the name of any person on
the certificate has been changed; or that the registered owner
has married, or, if registered as married, that the marriage has
been terminated and no right or interest of heirs or creditors
will thereby be affected, or that a corporation which owned
registered land and has been dissolved has not yet conveyed
the same within three years after its dissolution; or upon any
other reasonable ground; and the court may hear and
determine the petition after notice to all parties in interest,
and may order the entry or cancellation of a new
certificate, the entry or cancellation of a memorandum upon
a certificate, or grant any other relief upon such terms and
conditions, requiring security or bond if necessary, as it may
consider proper: Provided, however, That this section shall not
be construed to give the court authority to reopen the judgment
or decree of registration, and that nothing shall be done or
ordered by the court which shall impair the title or other
interest of a purchaser holding a certificate for value and in
good faith, or his heirs and assigns, without his or their written
consent. Where the owners duplicate certificate is not
presented, a similar petition may be filed as provided in the
preceding section,
All petitions or motions filed under this section as well
as under any other provision of this Decree after original
registration shall be filed and entitled in the original case in
which the decree or registration was entered. (Underscoring
supplied)
The courts intervention in the amendment of the registration book after
the entry of a certificate of title or of a memorandum thereon is categorically
stated in the Property Registration Decree and cannot be denied by the mere
allegations of petitioner. Hence, the contentions that the Register of Deeds
may validly re-annotate the incumbrance/liens and annotate the Supreme Court
decision on the administratively reconstituted transfer certificates of titles (TCTs)
have no basis in law and jurisprudence.
Petitioner further submits that the issuance of the TCTs to respondents is
fraudulent. It suggests that under Sections 69 and 73 of P.D. No. 1529, any
person whose interest does not appear on a reconstituted title may file a request
directly with the Register of Deeds.
As correctly observed by respondents, P.D. No. 1529 principally
pertains to the registration of property, while R.A. No. 26 is a special law on the
procedure for the reconstitution of Torrens certificates of title that were lost or
destroyed. Specifically, Section 69[16] of P.D. No. 1529 refers to an attachment
that arose after the issuance of a certificate of title; while Section 71[17] of the
same law pertains to the registration of the order of a court of an attachment
that was continued, reduced, dissolved or otherwise affected by a judgment of
the court. Undoubtedly, the foregoing provisions find no application in the present
case since petitioner insists that its interest was annotated prior to the
reconstitution of the disputed certificates of title.

WHEREFORE, the petition is DENIED. The Decision of the Court of

Appeals in CA-G.R. CV No. 50332, dated August 29, 1997, and the Decision of
the Regional Trial Court of Quezon City, Branch 101, in Civil Case No. Q-
6056(93),[18] are hereby AFFIRMED.

No costs.

SO ORDERED.

ADOLFO S. AZCUNA
Associate Justice
G.R. No. L-27587 February 18, 1970
AMADO CARUMBA, petitioner,
vs.
THE COURT OF APPEALS, SANTIAGO BALBUENA and ANGELES BOAQUIÑA
as Deputy Provincial Sheriff, respondents.
Luis N. de Leon for petitioner.
Reno R. Gonzales for respondents.
REYES, J.B.L., J.:
Amado Carumba petitions this Supreme Court for a certiorari to review a decision
of the Court of Appeals, rendered in its Case No. 36094-R, that reversed the
judgment in his favor rendered by the Court of First Instance of Camarines Sur
(Civil Case 4646).
The factual background and history of these proceedings is thus stated by the
Court of Appeals (pages 1-2):
On April 12, 1955, the spouses Amado Canuto and Nemesia
Ibasco, by virtue of a "Deed of Sale of Unregistered Land with
Covenants of Warranty" (Exh. A), sold a parcel of land, partly
residential and partly coconut land with a periphery (area) of
359.09 square meters, more or less, located in the barrio of
Santo Domingo, Iriga, Camarines Sur, to the spouses Amado
Carumba and Benita Canuto, for the sum of P350.00. The
referred deed of sale was never registered in the Office of the
Register of Deeds of Camarines Sur, and the Notary, Mr.
Vicente Malaya, was not then an authorized notary public in the
place, as shown by Exh. 5. Besides, it has been expressly
admitted by appellee that he is the brother-in-law of Amado
Canuto, the alleged vendor of the property sold to him. Amado
Canuto is the older brother of the wife of the herein appellee,
Amado Carumba.
On January 21, 1957, a complaint (Exh. B) for a sum or money
was filed by Santiago Balbuena against Amado Canuto and
Nemesia Ibasco before the Justice of the Peace Court of Iriga,
Camarines Sur, known as Civil Case No. 139 and on April 15,
1967, a decision (Exh. C) was rendered in favor of the plaintiff
and against the defendants. On October 1, 1968, the ex-
officio Sheriff, Justo V. Imperial, of Camarines Sur, issued a
"Definite Deed of Sale (Exh. D) of the property now in question
in favor of Santiago Balbuena, which instrument of sale was
registered before the Office of the Register of Deeds of
Camarines Sur, on October 3, 1958. The aforesaid property
was declared for taxation purposes (Exh. 1) in the name of
Santiago Balbuena in 1958.
The Court of First instance, finding that after execution of the document Carumba
had taken possession of the land, planting bananas, coffee and other vegetables
thereon, declared him to be the owner of the property under a consummated
sale; held void the execution levy made by the sheriff, pursuant to a judgment
against Carumba's vendor, Amado Canuto; and nullified the sale in favor of the
judgment creditor, Santiago Balbuena. The Court, therefore, declared Carumba
the owner of the litigated property and ordered Balbuena to pay P30.00, as
damages, plus the costs.
The Court of Appeals, without altering the findings of fact made by the court of
origin, declared that there having been a double sale of the land subject of the
suit Balbuena's title was superior to that of his adversary under Article 1544 of
the Civil Code of the Philippines, since the execution sale had been properly
registered in good faith and the sale to Carumba was not recorded.
We disagree. While under the invoked Article 1544 registration in good faith
prevails over possession in the event of a double sale by the vendor of the same
piece of land to different vendees, said article is of no application to the case at
bar, even if Balbuena, the later vendee, was ignorant of the prior sale made by
his judgment debtor in favor of petitioner Carumba. The reason is that the
purchaser of unregistered land at a sheriff's 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. This is specifically
provided by section 35 of Rule 39 of the Revised Rules of Court, the second
paragraph of said section specifically providing that:
Upon the execution and delivery of said (final) deed the
purchaser, redemptioner, or his assignee 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, except as
against the judgment debtor in possession, in which case the
substitution shall be effective as of the time of the deed ...
(Emphasis supplied)
While the time of the levy does not clearly appear, it could not have been made
prior to 15 April 1957, when the decision against the former owners of the land
was rendered in favor of Balbuena. But the deed of sale in favor of Canuto had
been executed two years before, on 12 April 1955, and while only embodied in
a private document, the same, coupled with the fact that the buyer (petitioner
Carumba) had taken possession of the unregistered land sold, sufficed to vest
ownership on the said buyer. When the levy was made by the Sheriff, therefore,
the judgment debtor no longer had dominical interest nor any real right over the
land that could pass to the purchaser at the execution sale.1 Hence, the latter must
yield the land to petitioner Carumba. The rule is different in case of lands
covered by Torrens titles, where the prior sale is neither recorded nor known to
the execution purchaser prior to the levy;2 but the land here in question is
admittedly not registered under Act No. 496.

WHEREFORE, the decision of the Court of Appeals is reversed and that of the
Court of First Instance affirmed. Costs against respondent Santiago Balbuena.

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando,

Teehankee, Barredo and Villamor, JJ., concur.
RURAL BANK OF STA. BARBARA G.R. No. 130223 In an Order dated 7 May 1993, the RTC ordered the issuance of the
[PANGASINAN], INC., Writ of Attachment petitioner prayed for, to wit:
Petitioner, Present:
WHEREFORE, let a Writ of Attachment be issued against
CARPIO MORALES,* J., all the properties of [Spouses Soliven] not exempt from
- versus - CHICO-NAZARIO,** execution or so much thereof as may be sufficient to satisfy the
Acting Chairperson, [herein petitioners] principal claim of P338,000.00 upon filing
VELASCO, JR., of [petitioners] bond in the amount of P100,000.00.[2]
THE MANILA MISSION OF NACHURA, and
THE CHURCH OF JESUS CHRIST OF PERALTA, JJ.
LATTER DAY SAINTS, INC., Upon the filing by petitioner of the required bond, the RTC issued the
Respondent. Promulgated: Writ of Attachment on 21 May 1993. Acting on the authority of said Writ, Sheriff
Reynaldo C. Daray attached the subject property, which was then still covered by
August 19, 2009 TCT No. T-125213 in the name of the spouses Soliven. The Writ of Attachment
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x was annotated on TCT No. T-125213 on 24 May 1993. Thus, when TCT No. T-
125213 of the spouses Soliven was cancelled and TCT No. 195616 of petitioner
was issued on 28 April 1994, the annotation on the Writ of Attachment was
DECISION carried from the former to the latter.

CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court seeking to set aside the Decision[1] dated 29 July 1997 of the Court of
Appeals in CA-G.R. SP No. 41042 affirming the Orders dated 9 October 1995
and 27 February 1996 of the Regional Trial Court (RTC), Branch 43, of Dagupan
City, in Civil Case No. D-10583.
Spouses Tomas and Maria Soliven (spouses Soliven) were the registered
owners, under Transfer Certificate of Title (TCT) No. T-125213, of a parcel of
land located in Barangay Maninding, Sta. Barbara, Pangasinan (subject
property). On 18 May 1992, the spouses Soliven sold the subject property to
respondent Manila Mission of the Church of Jesus Christ of Latter Day Saints, Inc.
(Manila Mission). However, it was only on 28 April 1994 when TCT No. T-125213
in the name of the spouses Soliven was cancelled, and TCT No. 195616 was
issued in the name of respondent.
While Civil Case No. D-10583 was still pending before the RTC,
respondent executed an Affidavit claiming title and ownership over the subject
property, and requested the Ex-Officio Provincial and City Sheriff to release the
said property from attachment. The Sheriff, however, advised respondent to file
a motion directly with the RTC.
On 16 March 1995, respondent filed with the RTC, in Civil Case No. D-
10583, a Motion to Release Property from Attachment, to which petitioner, in
turn, filed an Opposition. After hearing, the RTC issued an Order on 9 October
1995 discharging the subject property from attachment. The RTC decreed in said
Order:
WHEREFORE, the Court hereby directs the Ex-Officio
Provincial Sheriff of Pangasinan and City Sheriff of Dagupan to
discharge and release the subject land from attachment and
orders the notice of attachment on T.C.T. No. 195616 of the
Register of Deeds of Pangasinan be cancelled.[3]

In the meantime, on 15 April 1993, petitioner Rural Bank of Sta.
Barbara (Pangasinan), Inc. filed with the RTC a Complaint against the spouses
Soliven for a sum of money, docketed as Civil Case No. D-10583. The Complaint
of petitioner included a prayer for the issuance of a Writ of Preliminary
Attachment.
Petitioner filed a Motion for Reconsideration of the 9 October
1995 Order of the RTC, arguing that it had a better right over the subject
property and that the filing by respondent with the RTC, in Civil Case No. D-
10583, of a Motion to Release Property from Attachment, was the improper
remedy. In an Order dated 27 February 1996, the RTC denied the Motion for
Reconsideration of petitioner for lack of merit.

On 12 April 1997, petitioner filed a Petition for Certiorari with this
Court, alleging that the RTC committed grave abuse of discretion, amounting to
lack or excess of jurisdiction, in canceling the Writ of Attachment and ordering the
release of the subject property. The Petition was docketed as G.R. No.
124343. In a Resolution dated 27 May 1997, this Court referred the case to the
Court of Appeals for appropriate action.
The Court of Appeals docketed the Petition for Certiorari as CA-G.R. SP
No. 41042. On 29 July 1997, the Court of Appeals issued the assailed Decision
dismissing the Petition.
Hence, petitioner again comes before this Court via the present Petition
for Review, contending that the Court of Appeals erred in not finding grave
abuse of discretion on the part of the RTC when the latter directed the release of
the subject property from attachment. Petitioner insists that it has a better right to
the subject property considering that: (1) the attachment of the subject property in
favor of petitioner was made prior to the registration of the sale of the same
property to respondent; and (2) respondent availed itself of the wrong remedy in
filing with the RTC, in Civil Case No. D-10583, a Motion to Release Property from
Attachment. We shall discuss ahead the second ground for the instant Petition, a
matter of procedure, since its outcome will determine whether we still need to
address the first ground, on the substantive rights of the parties to the subject
property.
Propriety of the Motion to
Release Property from
Attachment
According to petitioner, the Motion to Release Property from Attachment
filed by respondent before the RTC, in Civil Case No. D-10583, is not the proper
remedy under Section 14, Rule 57 of the Rules of Court,[4] which provides:
SEC. 14. Proceedings where property claimed by third
person.If the property attached is claimed by any person other
than the party against whom attachment had been issued or his
agent, and such person makes an affidavit of his title thereto, or
right to the possession thereof, stating the grounds of such right
or title, and serves such affidavit upon the sheriff while the latter
has possession of the attached property, and a copy thereof
upon the attaching party, the sheriff shall not be bound to keep
the property under attachment, unless the attaching party or his
agent, on demand of the sheriff, shall file a bond approved by
the court to indemnify the third-party claimant in a sum not less
than the value of the property levied upon. In case of
disagreement as to such value, the same shall be decided by the
court issuing the writ of attachment. No claim for damages for
the taking or keeping of the property may be enforced against
the bond unless the action therefor is filed within one hundred
twenty (120) days from the date of the filing of the bond.
The sheriff shall not be liable for damages for the
taking or keeping of such property, to any such third-party
claimant, if such bond shall be filed. Nothing herein contained
shall prevent such claimant or any third person from vindicating
his claim to the property, or prevent the attaching party from
claiming damages against a third-party claimant who filed a
frivolous or plainly spurious claim, in the same or a separate
action.
When the writ of attachment is issued in favor of the
Republic of the Philippines, or any officer duly representing it,
the filing of such bond shall not be required, and in case the
sheriff is sued for damages as a result of the attachment, he
shall be represented by the Solicitor General, and if held liable
therefor, the actual damages adjudged by the court shall be
paid by the National Treasurer out of the funds to be
appropriated for the purpose.
Petitioner argues that, pursuant to the aforequoted section, the remedy
of a third person claiming to be the owner of an attached property are limited to
the following: (1) filing with the Sheriff a third-party claim, in the form of an
affidavit, per the first paragraph of Section 14; (2) intervening in the main action,
with prior leave of court, per the second paragraph of Section 14, which allows a
third person to vindicate his/her claim to the attached property in the same x x x
action; and (3) filing a separate and independent action, per the second
paragraph of Section 14, which allows a third person to vindicate his/her claim to
the attached property in a separate action.
Respondent explains that it tried to pursue the first remedy, i.e., filing a
third-party claim with the Sheriff. Respondent did file an Affidavit of Title and
Ownership with the Sheriff, but said officer advised respondent to file a motion
directly with the RTC in the main case. Respondent heeded the Sheriffs advice by
filing with the RTC, in Civil Case No. D-10583, a Motion to Release Property from
Attachment. The Court of Appeals recognized and allowed said Motion,
construing the same as an invocation by respondent of the power of control and
supervision of the RTC over its officers, which includes the Sheriff.
We agree with the Court of Appeals on this score. The filing by
respondent of the Motion to Release Property from Attachment was made on the
advice of the Sheriff upon whom respondent served its Affidavit of Title and
Ownership. Respondent should not be faulted for merely heeding the Sheriffs
advice. Apparently, the Sheriff, instead of acting upon the third-party claim of
respondent on his own, would rather have some direction from the RTC. Indeed,
the Sheriff is an officer of the RTC and may be directed by the said court to
allow the third-party claim of respondent. Therefore, the filing of the Motion in
question can be deemed as a mere continuation of the third-party claim of
respondent, in the form of its Affidavit of Title and Ownership, served upon the
Sheriff, in accord with the first paragraph of Section 14, Rule 57 of the Rules of
Court.
Alternatively, we may also consider the Motion to Release Property from
Attachment, filed by respondent before the RTC, as a Motion for Intervention in
Civil Case No. D-10583, pursuant to the second paragraph of Section 14, Rule
56, in relation to Rule 19 of the Rules of Court. Respondent, to vindicate its claim
to the subject property, may intervene in the same case, i.e., Civil Case No. D-
10583, instituted by petitioner against the spouses Soliven, in which the said
property was attached. Respondent has the personality to intervene, as it is so
situated as to be adversely affected by a distribution or other disposition of
property in the custody of the court or of an officer thereof.[5] The RTC, in acting
upon and granting the Motion to Release Property from Attachment in its Order
dated 9 October 1995, is deemed to have allowed respondent to intervene in
Civil Case No. D-10583.
Moreover, it may do petitioner well to remember that rules of procedure
are merely tools designed to facilitate the attainment of justice. They were
conceived and promulgated to effectively aid the court in the dispensation of
justice. Courts are not slaves to or robots of technical rules, shorn of judicial
discretion. In rendering justice, courts have always been, as they ought to be,
conscientiously guided by the norm that on the balance, technicalities take a
backseat to substantive rights, and not the other way around.Thus, if the
application of the Rules would tend to frustrate rather than promote justice, it is
always within the power of the Court to suspend the rules, or except a particular
case from its operation.[6] Hence, even if the Motion to Release Property from
Attachment does not strictly comply with Section 14, Rule 56 of the Rules of Court,
the RTC may still allow and act upon said Motion to render substantive justice.
This leads us to the substantive issue in this case, on which between the
two transactions should be given priority: the previous yet unregistered sale of
the subject property by the spouses Soliven to respondent, or the subsequent but
duly annotated attachment of the same property by petitioner.
Previous yet unregistered
sale versus subsequent but
duly annotated attachment
Petitioner does not dispute the allegation of respondent that the subject
property was sold by the spouses Soliven to respondent on 18 May 1992, before
petitioner instituted Civil Case No. D-10583 against the spouses Soliven on 15
April 1993; the RTC ordered the issuance of the Writ of Attachment on 7 May
1993; and the attachment of the subject property pursuant to the Writ on 27
May 1993.
Neither did petitioner offer evidence to counter the following documents
presented by respondent establishing the fact of the sale of the subject property
to the latter by the spouses Soliven: (1) the notarized Deed of Sale dated 18
May 1992; (2) BPI Managers Check No. 010685 dated 8 May 1992 in the sum
of P42,500.00 to represent the tender of payment of capital gains tax; (3) BIR
Official Receipt No. 0431320 dated 18 May 1992 of BPI Check No. 010625
for the payment of the sum of P8,5000.00; and (4) a letter dated 11 August
1992 of Manila Missions former counsel, Lim Duran & Associates, to the Revenue
District Officer, District 7, Bureau of Internal Revenue, relative to its request for
the reconsideration/condonation of the assessment of the capital gains tax on its
purchase of the subject property.
Petitioner, however, invokes jurisprudence wherein this Court in a number
of instances allegedly upheld a subsequent but duly annotated attachment, as
opposed to a previous yet unregistered sale of the same property. Petitioner
particularly calls our attention to the following paragraph in Ruiz, Sr. v. Court of
Appeals[7]:
[I]n case of a conflict between a vendee and an attaching
creditor, an attaching creditor who registers the order of
attachment and the sale of the property to him as the highest
bidder acquires a valid title to the property, as against a
vendee who had previously bought the same property from the
registered owner but who failed to register his deed of sale.
This is because registration is the operative act that binds or
affects the land insofar as third persons are concerned. It is upon
registration that there is notice to the whole world.
 In the more recent case Valdevieso v. Damalerio,[8] we have expounded
on our foregoing pronouncement in Ruiz.
On 5 December 1995, therein petitioner Bernardo Valdevieso
(Valdevieso) bought a parcel of land from spouses Lorenzo and Elenita Uy
(spouses Uy), the registered owners thereof. On 19 April 1996, therein
respondents, spouses Candelario and Aurea Damalerio (spouses Damalario), filed
a Complaint against the spouses Uy for a sum of money before the RTC of
General Santos City. On 23 April 1996, the RTC issued a Writ of Preliminary
Attachment by virtue of which the subject parcel of land was levied. The levy was
duly recorded in the Register of Deeds, and annotated on the TCT of the spouses
Uy over the subject parcel of land. It was only on 6 June 1996 that the TCT in the
name of the spouses Uy was cancelled, and a new one issued in the name of
Valdevieso. As in the case at bar, the annotation on the attachment was carried
over to Valdeviesos TCT.Valdevieso filed a third-party claim before the RTC
seeking to annul the attachment. In a resolution, the RTC ruled in Valdeviesos
favor, but the Court of Appeals reversed said RTC resolution. On appeal, we
adjudged:
The sole issue in this case is whether or not a registered
writ of attachment on the land is a superior lien over that of an
earlier unregistered deed of sale.
xxxx
The settled rule is that levy on attachment, duly
registered, takes preference over a prior unregistered
sale. This result is a necessary consequence of the fact that the
property involved was duly covered by the Torrens system which
works under the fundamental principle that registration is the
operative act which gives validity to the transfer or creates a
lien upon the land.
The preference created by the levy on attachment is
not diminished even by the subsequent registration of the prior
sale. This is so because an attachment is a proceeding in rem. It
is against the particular property, enforceable against the
whole world. The attaching creditor acquires a specific lien on
the attached property which nothing can subsequently destroy
except the very dissolution of the attachment or levy itself. Such
a proceeding, in effect, means that the property attached is an
indebted thing and a virtual condemnation of it to pay the
owners debt. The lien continues until the debt is paid, or sale is
had under execution issued on the judgment, or until the
judgment is satisfied, or the attachment discharged or vacated
in some manner provided by law.
Thus, in the registry, the attachment in favor of
respondents appeared in the nature of a real lien when
petitioner had his purchase recorded. The effect of the notation
of said lien was to subject and subordinate the right of
petitioner, as purchaser, to the lien. Petitioner acquired
ownership of the land only from the date of the recording of his
title in the register, and the right of ownership which he inscribed
was not absolute but a limited right, subject to a prior registered
lien of respondents, a right which is preferred and superior to
that of petitioner.[9]
It is settled, therefore, that a duly registered levy on attachment takes
preference over a prior unregistered sale.
Nonetheless, respondent argues that there is a special circumstance in
the case at bar, which should be deemed a constructive registration of the sale of
the subject property in its favor, preceding the attachment of the same property
by petitioner.
Knowledge of previous yet
unregistered sale
In Ruiz, the very case cited by petitioner, we made a qualification of the
general rule that a duly annotated attachment is superior to an unregistered prior
sale. In fact, we resolved Ruiz in favor of the vendee in the unregistered prior
sale, because knowledge of the unregistered sale by the attaching creditor is
deemed equivalent to registration. We explained in Ruiz:
But where a party has knowledge of a prior existing
interest which is unregistered at that time he acquired a right to
the same land, his knowledge of that prior unregistered
interest has the effect of registration as to him. Knowledge of
an unregistered sale is equivalent to registration. As held
in Fernandez v. Court of Appeals [189 SCRA 780 (1990)],
Section 50 of Act No. 496 (now Sec.
51 of P.D. 1529), provides that the registration
of the deed is the operative act to bind or
affect the land insofar as third persons are
 concerned. But where the party has knowledge
of a prior existing interest which is unregistered
at the time he acquired a right to the same
land, his knowledge of that prior unregistered
interest has the effect of registration as to
him. The torrens system cannot be used as a
shield for the commission of fraud (Gustillo v.
Maravilla, 48 Phil. 442). As far as private
respondent Zenaida Angeles and her husband
Justiniano are concerned, the non-registration
of the affidavit admitting their sale of a
portion of 110 square meters of the subject
land to petitioners cannot be invoked as a
defense because (K)nowledge of an
unregistered sale is equivalent to registration
(Winkleman v. Veluz, 43 Phil. 604).
This knowledge of the conveyance to Honorato Hong
can not be denied. The records disclose that after the sale,
private respondent was able to introduce improvements on the
land such as a concrete two-door commercial building, a
concrete fence around the property, concrete floor of the whole
area and G.I. roofing. Acts of ownership and possession were
exercised by the private respondent over the land. By these
overt acts, it can not therefore be gainsaid that petitioner was
not aware that private respondent had a prior existing interest
over the land.[10]
In the case at bar, respondent averred in its Motion to Release Property
from Attachment that the construction of a church edifice on the subject property
was about to be finished at the time the Writ of Preliminary Attachment was
implemented on 24 May 1993, and that the construction of the church was
actually completed by mid-1993.Respondent asserts that since petitioner did not
deny these allegations, much less adduce evidence to the contrary, then the latter
tacitly recognized the construction of the church.
Petitioner contends, on the other hand, that respondent failed to present
evidence to prove the fact that a church had already been constructed on the
subject property by the time the said property was attached, thus, constituting
notice to petitioner of the claim or right of respondent to the same.
Was there, at the time of the attachment, knowledge on the part of
petitioner Rural Bank of the interest of respondent Manila Mission on the subject
property?
If the allegation of respondent Manila Mission anent the building of the
chapel even before the issuance of the writ of attachment is true, this case would
be similar to Ruizwhere the vendee of the subject property was able to introduce
improvements. However, respondent Manila Mission presented no evidence of the
building of the chapel other than its bare allegation thereof. More importantly,
even assuming for the sake of argument that the chapel was indeed being built at
the time of the attachment of the property, we cannot simply apply Ruiz and
conclude that this confirms knowledge of a previous conveyance of the property
at that time. In Ruiz, the attaching party was the wife of the vendor of the subject
property, whom she sued for support. It was thus very probable that she knew of
the sale of the property to the vendee therein, considering that the vendee had
already introduced improvements thereon. In the case at bar, there is no special
relationship between petitioner Rural Bank and the spouses Soliven sufficient to
charge the former with an implied knowledge of the state of the latters
properties. Unlike in the sale of real property, an attaching creditor is not
expected to inspect the property being attached, as it is the sheriff who does the
actual act of attaching the property.
Neither did respondent Manila Mission present any evidence of
knowledge on the part of petitioner Rural Bank of the prior existing interest of
the former at the time of the attachment. Respondent Manila Mission merely
argues that there was a tacit recognition on the part of petitioner Rural Bank of
the construction of the chapel when the latter did not deny this allegation in its
Opposition to the Motion to Discharge Property from Attachment.
The Motion, however, merely mentions the construction of the chapel and
does not charge petitioner Rural Bank with knowledge of the construction. There
was, therefore, nothing to deny on the part of petitioner Rural Bank, as the mere
existence of such construction at that time would not affect the right of petitioner
Rural Bank to its lien over the subject property. Also, the mention in the Motion of
the construction of the chapel would have the effect of being a notice of an
adverse third-party claim only at the time of such Motion. Since such notice, which
was deemed in Ruiz as constructive registration of the sale, was effected
only after the attachment of the subject property, it could not affect the validity
of the attachment lien.
In sum, our decisions in Ruiz v. Court of Appeals and Valdevieso v.
Damalerio oblige us to rule that the duly registered levy on attachment by
petitioner Rural Bank takes preference over the prior but then unregistered sale
of respondent Manila Mission. There was likewise no evidence of knowledge on
the part of petitioner Rural Bank of any third-party interest in the subject
property at the time of the attachment. We are, therefore, constrained to grant
the instant Petition for Review and nullify the Orders of the RTC discharging the
subject property from attachment.

Nevertheless, respondent Manila Mission would not be left without

remedy. It could file a counter-bond pursuant to Section 12, Rule 57[11] of the
Rules of Court in order to discharge the attachment. If respondent Manila Mission
fails to do the same and the property ends up being subjected to execution,
respondent can redeem the property and seek reimbursement from the spouses
Soliven.

WHEREFORE, the instant Petition for Review on Certiorari is

hereby GRANTED. The Decision dated 29 July 1997 of the Court of Appeals in
CA-G.R. SP No. 41042 affirming the Orders of
the Regional Trial Court of Dagupan City dated 9 October 1995 and 27
February 1996 issued in Civil Case No. D-10583 is hereby REVERSED and SET
ASIDE. No pronouncement as to costs.

SO ORDERED.