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Radiowealth Finance Company Vs
Radiowealth Finance Company Vs
PALILEO
FACTS: Defendant spouses Castro sold to plaintiff-appellee Palileo (private respondent herein), a parcel of
unregistered coconut land situated in 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. Since the execution of
the deed of sale, appellee Palileo exercised acts of ownership over the land through his mother as administratrix or
overseer. Appellee has continuously paid the real estate taxes on said land from 1971 until the present.
A judgment was rendered against defendant Castro by the then CFI to pay herein defendant-appellant
Radiowealth Finance Company (petitioner herein). Upon the finality of the judgment, a writ of execution was
issued. Pursuant to said writ, defendant provincial Sheriff levied upon and finally sold at public auction the subject
land that defendant Enrique Castro had earlier sold to appellee Palileo. 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 with the RD.
Learning of what happened to the land, private respondent 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.
ISSUE: Who, as between two buyers of unregistered land, is the rightful owner—the 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 RD
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 RD.
It must be stressed however that this case deals with a parcel of unregistered land and a different set of rules
applies. We affirm the decision of the CA.
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.
Applying this principle, the CA 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.
NOTES: Findings of fact of the CA are conclusive on this Court and will not be disturbed unless there is grave abuse
of discretion. The finding of the CA 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 CA that private respondent was
not a mere administrator of the property. That he exercised acts of ownership through his mother also remains
undisputed.