Dagupan Trading vs. Macam (1965) – Art.

1544 in favor of the purchaser of land sold in an execution sale, such purchaser
G.R. No. L-18497 May 31, 1965
DAGUPAN TRADING COMPANY, petitioner,
vs.
RUSTICO MACAM, respondent.
FACTS: Sammy Maron and his seven brothers and sisters were pro-
indiviso owners of a parcel land in Pangasinan. Before the land was
registered, they executed two deeds of sale conveying the property to
Rustico Macam (Respondent), who thereafter took possession thereof and
proceeded to introduce substantial improvements therein. One month later,
Original Certificate of Title No. 6942 covering the land was issued in the
name of the Maron's, free from all liens and encumbrances.
"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."
What was the interest and claim of Sammy Maron on the one-eighth portion
of the property at the time of the levy? He had none, because for a
considerable time prior to the levy, his interest had already been conveyed
to Rustico Macam. Therefore, the subsequent levy made on the property
was void and of no effect (in short: the transfer of rights to Dagupan was
void because the levy in favor of Manila Trading was also void). Needless
to say, the unregistered sale and the consequent conveyance of title and
ownership in favor of Rustico 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.

However, by virtue of a final judgment against Sammy Maron in favor of IN VIEW OF ALL THE FOREGOING, the decision appealed from is
the Manila Trading and Supply Company, levy was made upon the affirmed, with costs.
property, and thereafter said interest was sold at public auction in favor of
Manila Trading. Manila Trading later sold all its rights and title to the
property to Dagupan Trading Company (Petitioner).

ISSUE: Who has the better right as between Dagupan Trading Company
and Rustico Macam to the one-eighth share of Sammy Maron in the
property?

If the property were unregistered land, Macam would have the better right
because his claim is based on a prior sale coupled with public, exclusive and
continuous possession thereof as owner. On the other hand, if the land was
duly registered, Dagupan Trading has the better right because the
registration of the deed of sale is the operative act that gives validity to the
transfer.

HELD: Rustico Macam has a better right.

The case at hand does not fall within the two situations presented above.
Here the sale in favor of Rustico Macam was executed before the land was
registered, while the sale in favor of Dagupan Trading was executed after
the same property had been registered. What should determine the issue,
then, is the last paragraph of Section 35, Rule 39 of the Rules of Court. It
provides that upon the execution and delivery of the final certificate of sale