GR 42323; (May, 1935) (Digest)
G.R. No. L-42323; May 27, 1935
THE DIRECTOR OF LANDS, petitioner, vs. ESTEBAN ABAD, ET AL., claimants. LA URBANA, MUTUAL BUILDING AND LOAN ASSOCIATION, claimant-appellant. LEVY HERMANOS, INC., claimant-appellee.
FACTS
Levy Hermanos, Inc. obtained a writ of attachment against the properties of Crecenciano M. Torres, including Lot No. 296-A, and registered the notice of attachment with the Register of Deeds of Occidental Negros on January 14, 1931. The registration was entered in the official entry book, but the Register of Deeds negligently failed to annotate the attachment on the corresponding Transfer Certificate of Title (TCT) No. 13126, as required by law. Seven months later, on August 14, 1931, La Urbana registered a mortgage on the same lot executed by Torres, and the Register of Deeds annotated this mortgage on TCT No. 13126 without noting the prior attachment. Levy Hermanos later acquired the lot at an execution sale. Upon discovering the error, Levy Hermanos filed a motion in court to compel the annotation of its attachment and deed of sale on the certificate of title, which the trial court granted. La Urbana appealed, arguing its mortgage lien should be superior since the attachment was not annotated on the title.
ISSUE
Whether the attachment lien of Levy Hermanos, which was registered in the entry book but not annotated on the certificate of title, is superior to the subsequently registered mortgage lien of La Urbana, which was annotated on the title.
RULING
Yes. The Supreme Court affirmed the trial court’s order. Under the Torrens system, registration in the entry book of the Register of Deeds constitutes effective registration and produces all legal effects from the time of entry. Levy Hermanos’ attachment was duly registered upon entry in the book, giving it priority. La Urbana, as a mortgagee, had the right to rely on the face of the certificate of title, and its failure to discover the unannotated attachment was due to the Register of Deeds’ negligence, not its own fault. However, the law protects the priority of a duly registered encumbrance, even if the official negligently fails to annotate it on the title. The Court emphasized that a person dealing with registered land is not bound to look beyond the certificate of title, but this principle does not alter the legal priority established by the date of registration in the entry book.
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