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G.R. No. L-56483: SOSTENES CAMPILLO, vs. COURT OF APPEALS and ZENAIDA DIAZ
VDA. DE SANTOS
1984 May 29, 129 scra 513
Contract of Sale – Efficacy – Need to Register Sale in the Registry of Deeds – PD 1529

Tomas de Vera was the owner of two parcels of land in Tondo, Manila. In 1961, de Vera sold
the lands to Simplicio Santos. Santos however did not register the sale in the Registry of Deeds,
which means that the land was still under de Vera’s name.

On the other hand, de Vera was indebted to Campillo. Campillo obtained a judgment for sum of
money. De Vera’s 3 parcels of land, including those sold to Santos were levied in 1962 in favor
of Campillo. Campillo acquired the land and he was able to have the lands be registered under
his name.

ISSUE: Who has better right over the property: Santos who first bought it w/o registering it or
Campillo who subsequently purchased it at a public auction and have it registered under his
name?

HELD: Campillo has the right over the said properties. It is settled in this jurisdiction that a sale
of real estate, whether made as a result of a private transaction or of a foreclosure or execution
sale, becomes legally effective against third persons only from the date of its registration.
Santos purchase of the two parcels of land may be valid but it is not enforceable against third
persons for he failed to have it registered.

Campillo is a purchaser in good faith as he was not aware of any previous sale for Santos never
caused the annotation of the sale.

Section 51, PD No. 1529, otherwise known as the Property Registration Decree, provides as
follows:

"Section 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."

The purchaser (Campillo) in the execution sale of the registered land in suit, acquires such right
and interest as appears in the certificate of title unaffected by prior lien or encumbrances not
noted therein. This must be so in order to preserve the efficacy and conclusiveness of the
certificate of title which is sanctified under our Torrens system of land registration.