Radiowealth vs.

Palileo

Facts:

Spouses Enrique Castro and Herminia Castro sold to Manuelito Palileo a parcel of unregistered coconut land.

The sale is evidenced by a notarized Deed of Absolute Sale but was not registered in the Registry of Property for
unregistered lands.

Since the execution of the sale, Palileo, exercised acts of ownership by continuously paying for the real estate taxes
from 1971 until the present.

Meanwhile, a judgment was rendered against Enrique Castro to pay his debt to Radiowealth Finance Company.
Upon the finality of the judgment, the property which sold to Palileo was sold at public auction, with Radiowealth
being the only bidder.

Both the certificate of sale and the deed of final sale executed in favor of Radiowealth, were registered with the
Register of Deeds.

Upon learning what happened to the land, Palileo filed an action for quieting of title over the same.

Issue: Who is the rightful owner of the unregistered land?

Held:

PALILEO is the rightful owner. What the Provincial Sheriff levied upon and sold to Radiowealth is a parcel of land that
does not belong to Castro, hence the execution is contrary to the directive contained in the writ of execution which
commanded that the lands and buildings belonging to Castro be sold to satisfy the execution.

Art. 1544 of the Civil Code is not applicable to unregistered lands. It cannot be invoked to benefit the purchaser at
the execution sale though the latter was a buyer in good faith and even if the second sale was registered, because
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.