LTD CHAPTER 5 Court of Appeals dismissed the petition before the trial court and upheld the transfer
Court of Appeals dismissed the petition before the trial court and upheld the transfer certificate
1. Drs. Alendry P. Caviles, Jr. And Flora P. Caviles Vs. Evelyn T. Bautista And Ramon T.
Bautista
FACTS:
1. On September 22, 1982, petitioners-appellees, the spouses Alendry and Flora Caviles, Jr.
filed with the then Court of First Instance of Manila, against Renato C. Plata for recovery of a
sum of money and an application for the issuance of a writ of preliminary attachment. On
September 24, 1982, the CFI issued the writ prayed for and on October 4, 1982, Deputy Sheriff
of the court issued a Notice of Attachment over a piece of real estate owned by Plata covered
by Transfer Certificate of Title No. S-33634 of the Las Pias Registry.
2. The Notice of Attachment was entered in the Primary Entry Book (also known as Day Book)
on October 6, 1982, but was not annotated on TCT No. S-33634 by the Register of Deeds, nor
did the deputy sheriff or the plaintiffs, now herein petitioners-appellees, take any step to
annotate the attachment on the TCT No. S-33634.
3. On October 18, 1982, Plata sold the property covered by TCT No. S-33634 to herein
respondents-appellants, the spouses Evelyn and Ramon Bautista, free, of course, from the
attachment or any encumbrance, and on the same date Plata's TCT No. S-33634 was cancelled
and in lieu thereof TCT No. 57006 was issued in the name of respondents-appellants. From then
on, respondents-appellants appear to have taken over and resided in the property.
4. No action was taken by petitioners-appellees to annotate the attachment as indeed they
remained ignorant that the property had been sold and a new title issued until very much later
when, after obtaining a favorable judgment in Civil Case No. 82-12668 on September 30, 1983,
they attempted execution. Thus, even as petitioners-appellees were able to obtain a writ of
execution on February 3, 1984, the levy effected on February 21, 1984, was in (sic) still in regard
to the by-then-cancelled TCT No. S-3364. The Notice of Levy was entered in the Day Book on
February 22, 1984.
5. On March 30, 1987, close to 4 1/2 years after the property was bought by respondents-
appellants, and 3 years after levy on execution was effected, the property was sold on execution
to petitioners-appellees.
6. The Certificate of Sale was entered in the Day Book on April 2, 1987, but when its inscription
was sought to be made the first time such idea entered petitioners-appellees' mind, apparently
it was found out that Plata's certificate had been cancelled and a new one issued to
respondents-appellants. The entry was made nonetheless on the title of respondents-appellants
which annotation the Register of Deeds, however, refused to sign. Upon the matter being
elevated on consulta to the National Land Titles and Deeds Registration Administration, the
Administrator thereof, the Honorable Teodoro G. Bonifacio, opined on February 23, 1988, that
the certificate of sale may be annotated on respondents-appellants' TCT No. 57006.
7. Due to the refusal of respondents-appellants to surrender their owner's copy of TCT No.
57006, the proceedings below were initiated on January 30, 1989, with petitioners-appellees
invoking Section 107 of Presidential Decree No. 1529, which insofar as herein pertinent speaks
of an action to compel surrender of the owner's duplicate of title for annotation of a "voluntary
instrument".
On June 2, 1990, a decision was handed down by Regional Trial Court of Makati and presided
over by the Honorable Job B. Madayag, ordering, inter alia, respondents-appellants to surrender
their owner's duplicate copy of TCT No. 57006 for inscription or annotation of the certificate of
sale, and for the subsequent cancellation of said certificate of title and the issuance of a new
certificate of title in favor of petitioners-appellees.
On September 20, 1991, the Court of Appeals, Second Division, promulgated a decision
reversing the June 2, 1990 decision of Branch 145 of the Regional Trial Court of Makati. The
of title of respondent-appellants Evelyn T. Bautista and Ramon T. Bautista.
ISSUE
Which interest will prevail, that of petitioners (which consists of a notice of attachment duly
entered in the Day Book or Primary Entry Book on October 6, 1982, with corresponding fees
paid for, levy or execution, execution sale, and final deed of sale but without the corresponding
annotation thereof on the certificate of title of subject property)
or
that of respondents (which consists of a deed of sale executed on October 18, 1982, entered in
the Day Book on the same date and a new certificate of title in their favor issued free from the
petitioners' attachment)?
RULING
From the facts, respondent spouses clearly had no notice of any defect, irregularity or
encumbrance in the title of the property they purchased. Neither did they have any knowledge
of facts or circumstances which should have put them on inquiry, requiring them to go behind
the certificate of title. Respondent spouses were clearly innocent purchasers for value and in
good faith at the time they acquired the subject property.
Petitioners themselves admitted in their petition, "Neither can negligence be ascribed to
respondents for their failure to go beyond their certificate of title. . ." In Sandoval vs. Court of
Appeals, we reiterated a long line of decisions and ruled "that one who deals with property
registered under the Torrens system need not go beyond the same, but only has to rely on the
title. He is charged with notice only of such burdens and claims as are annotated on the title."
Likewise, negligence cannot be imputed to petitioners in this case. The records show that
petitioners successfully obtained a writ of preliminary attachment of the subject property in
Civil Case No. 82-12668, and the notice of attachment was then entered in the primary entry
book of the Register of Deeds of Pasay City on October 6, 1982.
But as earlier stated, the notice of attachment was not annotated on the original copy of the
transfer certificate of title TCT No. S-33634. Petitioners later obtained a favorable judgment
and purchased the subject property at the execution sale. When they sought to inscribe the
certificate of sale on Plata's title covering the subject property, they discovered that the latter
had been sold to respondent spouses, the new title thereto TCT No. 57006 now in their
name. The notice of attachment was later inscribed on the cancelled certificate of title on
November 22, 1983, but it was made to appear that it had been annotated on October 6, 1982.
13 This belated inscription is reflected since said inscription followed the earlier entry on
October 18, 1982, of the sale of the subject property to respondent spouses. The notice of
attachment dated October 6, 1982, was also later annotated on TCT No.
57006.
We disagree. Petitioners paid the corresponding fees for the annotation of the notice of
attachment and they had every right to presume that the register of deeds would inscribe said
notice on the original title covering the subject property. The register of deeds had the duty to
inscribe the notice on the original title. This was not a duty of petitioners. This Court has held
that a party which delivers its notice of attachment to the register of deeds and pays the
corresponding fees therefor has a right to presume that the official would perform his duty
properly. In involuntary registration, such as an attachment, levy upon execution, lis pendens
and the like, it has been held that entry thereof in the day book is a sufficient notice to all persons
of such adverse claim. The notice should, of course, be annotated on the back of the
corresponding original certificate of title, but this Court has said that this is an official duty of
the register of deeds which may be presumed to have been regularly performed.
As we have held in DBP vs. Acting Register of Deeds of Nueva Ecija, "current doctrine thus
seems to be that entry alone produces the effect of registration, whether the transaction entered
is a voluntary or involuntary one, so long as the registrant has complied with all that is required
of him for purposes of entry and annotation, and nothing more remains to be done but a duty
incumbent solely on the register of deeds."
Given this parity of good faith and the absence of negligence on the part of both parties, who
between them has a better right to the property in question?
Art. 1544 of the New Civil Code, provides:
If the same thing should have been sold to different vendees, the ownership shall be transferred
to the person who may have first taken possession thereof in good faith, if it should be movable
property,
Should it be immovable property, the ownership shall belong to the person acquiring it who in
good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was
first in the possession; and, in the absence thereof, to the person who presents the oldest title,
provided there is good faith. (Emphasis supplied.)
In the case at bar, the notice of attachment covering the subject property was annotated in the
entry book of the Register of Deeds of Pasay City on October 6, 1982, while the new transfer
certificate of title in the name of respondent spouses was issued on October 18, 1982, the date
when Plata sold the property to said respondents. Petitioners' levy on preliminary attachment
was put into effect when the property was sold on execution to petitioners, after the latter
obtained a writ of execution by virtue of a favorable judgment in Civil Case No. 82-12668.
Petitioners' lien of attachment was properly recorded when it was entered in the primary entry
book of the Register of Deeds on October 6, 1982.
We have also consistently ruled that an auction or execution sale retroacts to the date of levy of
the lien of attachment. When the subject property was sold on execution to the petitioners, this
sale retroacted to the date of inscription of petitioners' notice of attachment on October 6, 1982.
The earlier registration of the petitioners' levy on preliminary attachment gave them superiority
and preference in rights over the attached property as against respondents.
Accordingly, we rule that the execution sale in favor of the petitioner Caviles spouses was
anterior and superior to the sale of the same property to the respondent Bautista spouses on
October 18, 1982. The right of petitioners to the surrender of the owner's duplicate copy of TCT
No. 57006 covering the subject property for inscription of the certificate of sale, and for the
cancellation of said certificate of title and the issuance of a new title in favor of petitioners
cannot be gainsaid.
WHEREFORE, the appealed Decision of the Court of Appeals in CA G.R. CV No. 27758 dated
September 20, 1991, and its Resolution dated November 4, 1991, are hereby SET ASIDE, and
the Decision of Branch 145 of the Regional Trial Court of Makati dated June 2, 1990, is hereby
AFFIRMED and REINSTATED.
No pronouncement as to costs.
SO ORDERED.
Bellosillo, Mendoza, Buena and De Leon, Jr., JJ., concur.
2.
3.
4. REPUBLIC OF THE PHILIPPINES vs. CA
FACTS:
Lot No. 622 of the Mariveles Cadastre was declared public land in a decision before the last war
in Cadastral Case No. 19, LRC Cadastral Record No. 1097. It was segregated from the forest
zone and released and certified by the Bureau of Forestry as an agricultural land for disposition
under the Public Land Act.
On April 26, 1967, Respondents filed in the Court of First Instance of Bataan a petition to reopen
Cadastral Case No. 19, LRC Cadastral Record No. 1097 concerning a portion of Lot No. 622
and other lots to perfect their rights and register their titles to said lots, having allegedly acquired
ownership and possession of said parcels of land by purchase from the original owners thereof,
whose possession of the same including that of the herein respondents, has always been
continuous, open, active, exclusive, public, adverse and in the concept of owners thereof for
more than 30 years.
The lower court found that the petitioner (herein respondents) have complied with all the terms
and conditions which would entitle them to a grant and upon the decision having become final,
Commissioner of Land Registration is hereby directed to issue the corresponding decrees of
registration.
Petitioner Republic of the Philippines, through the Solicitor-General, filed a petition for review
of the decrees of registration under Section 38 of Act No. 496 on the grounds that the entire
proceeding was vitiated by lack of notice to the Solicitor General of the subsequent hearings of
the petition for re-opening of the cadastral proceedings; that the parcels of land are portions of
the public domain opened for disposition only on or about July 6, 1965; that respondents do not
have a registerable title to the land subject matter of the proceedings; and that lower court
without jurisdiction to decree the confirmation of registerable title to respondents over portions
of the public domain and that respondents employed actual fraud in procuring title over the
parcels of land.
Respondents moved to dismiss on the grounds that the trial court has no jurisdiction over the
nature of the action or suit as there is no fraud to justify the setting aside on review of a decree
of registration. The CA affirmed the decision of RTC.
ISSUE:
Whether or not the lots claimed by respondents could be legally be the subject of a judicial
confirmation of title under the Public Land Act.
RULING:
No. Section 48(b) of CA No. 141 applies exclusively to public agricultural land. Forest lads otr
areas covered with forests are excluded. They are incapable of registration and their inclusion
in a title, whether such title be one issued during the Spanish sovereignty or under the present
Torrens System.
A parcel of forest land is within the exclusive jurisdiction of the Bureau of Forestry and beyond
the power and jurisdiction of the cadastral court to register under the Torrens System.
Even if the reopening of the cadastral proceeding was at all possible, private respondents have
not qualified for a grant under Section 48(b) of CA No. 141, the facts being that private
respondents could only be credited with 1 year, 9 months and 20 days possession and occupation
of the lots involved, counted from July 6, 1965, the date when the land area in Sitio San Jose,
Cabcaban, Mariveles, Bataan known as Bataan PMD No. 267, which includes the lots claimed
by respondents, had been segregated from the forest zone and released by the Bureau of Forestry
as an agricultural land for disposition under the Public Land Act.
Neither the private respondents nor their predecessors-in-interest could have possessed the lots
for the requisite period of 30 years as disposable agricultural land.
The decision of the lower court and CA are set aside and reversed because lots in question still
form part of the public domain.
5.
6.
7.
8. LEVISTE VS NOBLEJAS
Facts:
Respodent Villanueva filed an adverse claim over a lot which was the subject of an agreement to
sell executed in her favor by Garcia Realty. She did not present the owners duplicate certificate
of title as required by Sec. 55 of Act No. 496 nor did she register the agreement to sell as provided
for by Sec. 52 of Act No. 496 or the Land Registration Act. Petitioners separately registered notices
of attachments covering the disputed lot, issued in separate cases filed by Garcia Realty. In the
meantime, Garcia Realty executed a contract in favor of Villanueva. However the ROD refused to
register the deed, unless the notices of attachments were carried over on the title to be issued to
Villanueva. The ROD elevated the matter to the Land Registration Commission. The LRC via
enconsulta, ordered the issuance of a new TCT to Villanueva free of any encumbrance.
Issue:
WON the LRC was correct in issuing a new TCT to Villanueva free of any encumbrance.
Held:
No. The basis of respondent Villanueva's adverse claim was an agreement to sell executed in her
favor by Garcia Realty. An agreement to sell is a voluntary instrument as it is a wilful act of the
registered owner. As such voluntary instrument, Section 50 of Act No. 496 expressly provides that
the act of registration shall be the operative act to convey and affect the land. And Section 55 of
the same Act requires the presentation of the owner's duplicate certificate of title for the registration
of any deed or voluntary instrument. The reason for requiring the production of the owner's
duplicate certificate in the registration of a voluntary instrument is that, being a wilful act of the
registered owner, it is to be presumed that he is interested in registering the instrument and would
willingly surrender, present or produce his duplicate certificate of title to the Register of Deeds in
order to accomplish such registration.
In the case at bar, it does not appear that Villanueva attempted to register the agreement to sell
under Section 52 of Act No. 496 and that the registered owner, Garcia Realty, refused to surrender
the duplicate certificate for the annotation of said instrument. Instead, Villanueva merely filed an
adverse claim based on said agreement to sell considering that Section 62 of the Land Registration
Act prescribes the procedure for the registration of Villanueva's interest less than an estate in fee
simple on the disputed lot and there being no showing of her inability to produce the owner's
duplicate certificate, the remedy provided in Section 110 of Act 496, which was resorted to by
Villanueva, is, therefore, ineffective for the purpose of protecting her right or interest on the
disputed lot.
Inasmuch as the adverse claim filed by Villanueva was not valid, the same did not have the effect
of a conveyance of her right or interest on the disputed lot and could not prejudice any right that
may have arisen thereafter in favor of third parties.
Consequently, the attachments of Berthelsen, Leviste, and that in Civil Case No. 2489-P of the
Court of First Instance of Rizal covering the disputed lot are superior to that acquired by Villanueva
and will have to be carried over to the new title to be issued in her favor.
9.
10.
11. Lloyds Enterprises & Credit Corp v. Dolleton
Facts:
Respondents were the registered owners of a parcel of land situated in Barangay Putatan,
Muntinlupa City and covered by TCT No. 153554. Erected on the 166- sq m property is a four-
door apartment building being leased by respondents to various tenants. Respondents mortgaged
the property to a certain Joseph Patrick Santos to secure a loan in the amount of P100,000.00.
Upon payment of the loan, Santos executed a release and cancellation of the mortgage. The
same was annotated on the TCT.
TCT No. 153554 in the name of respondents was cancelled and a new TCT No. 197220 was
issued in the name of Gagan on the basis of a Deed of Absolute Sale whereby respondents
purportedly sold to Gagan the subject property for the sum of P120,000.00.
Petitioner lent to Gagan and her live-in partner, Guevarra, the sum of P391,512.00. The loan
was secured by a real estate mortgage on the subject property. After payment of the loan,
petitioner executed a Cancellation of Mortgage. Petitioner granted another loan to Gagan and
Guevarra for a bigger sum of P542,928.00. A new real estate mortgage was constituted over the
property. This undated mortgage deed appears to have been notarized in 1995. The second real
estate mortgage was likewise annotated.
Gagan and Guevarra failed to pay the second loan upon its maturity. Thus, petitioner instituted
extrajudicial foreclosure proceedings on the subject property.
Petitioner sent notices to the apartment tenants informing them about the transfer of the property
to petitioner and allowing them the option either to vacate the apartment or to pay a monthly
rental of P2,000.00. Thus, the apartment tenants did not remit the rentals to respondents
anymore, prompting the latter to cause the annotation of an adverse claim on TCT No.
Respondents filed a complaint, praying among others for the nullification of the Deed of
Absolute Sale, the two real estate mortgage contracts and the extrajudicial foreclosure
proceedings; the cancellation of TCT Nos. 197220 and 210363; and the restoration of TCT No.
153554 in the name of respondents.
Respondents denied having executed the Deed of Absolute Sale and alleged that they had merely
offered to sell to defendant Gagan the subject property for P900,000.00 on installment basis so
that they could pay their loan obligation to Santos.
The summons on defendants Gagan and Guevarra were returned unserved as their whereabouts
were unknown. Upon motion by respondents, the RTC directed the issuance and service of alias
summons by publication. Subsequently, defendants Gagan and Guevarra were declared in
default for failure to file their responsive pleading to the complaint that was published in a
newspaper of general circulation.
In its answer with counterclaim, petitioner raised the defense of lack of cause of action, asserting
that it exercised due diligence in verifying the status of the subject property and that it would
not have accepted the same as security for the loan if the title were not clean. It also claimed
that respondents were guilty of estoppel by laches as they failed to take the necessary measures
to protect their rights and interest.
RTC rendered judgment declaring the Deed of Absolute Sale dated 5 August 1994 as spurious.
Issues:
I. Whether or not CA committed a reversible error in law when it failed to declare petitioner as
mortgagee in good faith as the latter took the necessary steps which an ordinary and prudent
man would have taken before buying the property in question;
II. Whether or not CA erred when it ruled that the petitioner is liable for damages when the
respondent is not entirely without fault;
III. Whether or not CA erred when it failed to rule on the liability of the Gagans in this case;
IV. Whether or not the amount of damages awarded by the honorable court of appeals is
consistent with the existing jurisprudence and norms of morality.
Held:
RTC and the Court of Appeals concur that petitioner did not exercise due diligence in
ascertaining the true ownership of the subject property, notwithstanding the existence of
circumstances which should have impelled it to investigate further. Well-settled is the rule that
factual findings of the RTC, when affirmed by the Court of Appeals, are accorded great weight
and respect by the Court.
The Court cannot sustain petitioners claim that it should not be required to look beyond the
certificate of title for flaws in the ownership of the property in view of the presumption that a
Torrens title is regularly issued and that the burden is on respondents to rebut the presumption
of good faith.
Petitioner is engaged in the business of extending credit to the public and is, thus, expected to
exercise due diligence in dealing with properties offered as security.
The Court explicitly declared that when the purchaser or mortgagee is a financing institution,
the general rule that a purchaser or mortgagee of land is not required to look further than what
appears on the face of the title does not apply.
Applying the principle in Adriano, petitioner must bear the loss of the property because of its
failure to ascertain the true ownership of the subject property, notwithstanding the fact that it is
engaged in the business of offering real estate loans to the public and is, therefore, required to
exercise a higher degree of diligence in investigating the status and condition of the properties
offered as securities.
Petitioner, however, is not without relief even at this juncture. It correctly filed a cross-claim
against defendants Gagan and Guevarra for the purchase price of the foreclosed property in the
amount of P645,000.00 plus other expenses of transfer and litigation, the actual damages it
incurred at the foreclosure sale, and all other expenses for which petitioner may be held liable.
Although the RTC and the Court of Appeals failed to resolve the cross-claim, to avoid further
delay, this Court can very well adjudicate upon the liabilities of defendants Gagan and Guevara
to petitioner. Petitioner submitted in evidence a copy of the sheriffs certificate of sale, evincing
that petitioner paid the amount of P645,000.00 at the foreclosure sale of the subject property.
However, as to other alleged actual expenses incurred by petitioner as a result of the filing of
the case, no evidence was offered to prove the same. Defendants Gagan and Guevara should
ultimately bear the damages incurred by petitioner at the foreclosure sale, considering that no
evidence was presented to prove petitioners complicity in the forgery of the Deed of Absolute
Sale and that the instant controversy arose because of the acts of defendants Gagan and Guevara.
Except for the modified award of moral and exemplary damages due the respondents, the Court
of Appeals decision affirmed, albeit impliedly, the RTC decision in all other respects including
the award of actual litigation expenses and attorneys fees.
WHEREFORE, the instant petition for review on certiorari is PARTIALLY GRANTED and
the Decision of the Court of Appeals in CA-G.R. CV No. 82017 is AFFIRMED IN ALL
RESPECTS with the following MODIFICATIONS: (1) the other monetary awards granted by
the Regional Trial Court, Branch 276, Muntinlupa City are RESTORED and petitioner is
accordingly ORDERED to pay respondents moral damages of P300,000.00, exemplary
damages of P300,000.00, actual litigation expenses of P50,000.00 and attorneys fees of
P100,000.00; and (2) defendants Blesilda Gagan and Feliciano Fajardo Guevarra are
ORDERED to pay jointly and severally petitioner Lloyds Enterprises and Credit Corporation
on its cross-claim the amount.
12.
13.
14. This is case the for cancellation of the inscription of a Notice of Levy on Execution from a
certificate of Title covering a parcel of real property. The inscription was caused to be made by the
private respondent on Transfer Certificate of Title No. N-79073 of the Register of Deeds of
Marikina, issued in the name of the spouses Ernesto B. Uychocde and Lucita Jarin, and was later
carried over to and annotated on Transfer Certificate of Title No. N-109417 of the same registry,
issued in the name of the spouses Alfredo Sajonas and Conchita R. Sajonas.
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a parcel of
residential land located in Antipolo, Rizal to the spouses Alfredo Sajonas and Conchita R. Sajonas
on installment basis. The property was registered in the names of the Uychocde spouses under
TCT No. N-79073. On August 27, 1984, the Sajonas couple caused the annotation of an adverse
claim based on the said Contract to Sell on the title of the subject property, which was inscribed as
Entry No. 116017.Upon full payment of the purchase price, the Uychocdes executed a Deed of
Sale involving the property in question in favor of the Sajonas couple. The deed of absolute sale
was registered almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Casefor collection of
sum of money against Ernesto Uychocde.On June 25, 1980, a Compromise Agreement was entered
into by the parties in the said case under which Ernesto Uychocde acknowledged his monetary
obligation to Domingo Pilares amounting to P27,800 and agreed to pay the same in two years from
June 25, 1980. When Uychocde failed to comply with his undertaking in the compromise
agreement, defendant-appellant Pilares moved for the issuance of a writ of execution to enforce
the decision based on the compromise agreement, which the court granted in its order dated August
3, 1982.Pursuant to the order of execution dated August 3, 1982, a notice of levy on execution was
issued on February 12, 1985.On February 12, 1985, defendant sheriff Roberto Garcia of Quezon
City presented said notice of levy on execution before the Register of Deeds of Marikina
When the deed of absolute sale dated September 4 1984 was registered on August 28, 1985, TCT
No. N-79073 was cancelled and in lieu thereof, TCT No. N-109417 was ssued in the name of the
Sajonas couple.The notice of levy on execution annotated by defendant sheriff was carried over to
the new title. On October 21, 1985, the Sajonas couple filed a Third Party Claim with the sheriff
of Quezon City, hence the auction sale of the subject property did not push through as scheduled.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of levy on
execution upon defendant-appellant Pilares. Despite said demand, defendant-appellant Pilares
refused to cause the cancellation of said annotation.
he Sajonases filed their complaint in the Regional Trial Court against Domingo Pilares, the
judgment creditor of the Uychocdes. The complaint alleges:
- That at the time the notice of levy was annotated by the defendant, the Uychocde spouses, debtors
of the defendant, have already transferred, conveyed and assigned all their title, rights and interests
to the plaintiffs and there was no more title, rights or interests therein which the defendant could
levy upon
- That the annotation of the levy on execution which was carried over to the title of said plaintiffs
is illegal and invalid and was made in utter bad faith, in view of the existence of the Adverse Claim
annotated by the plaintiffs on the corresponding title of the Uychocde spouses
Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986, raising special and
affirmative defenses, the relevant portions of which are as follows:
- Plaintiff has no cause of action against herein defendants;
- Assuming, without however admitting that they filed an adverse claim against the property
covered by TCT No. 79073 registered under the name of spouses Ernesto Uychocde on August
27, 1984, the same ceases to have any legal force and effect (30) days thereafter pursuant to Section
70 of P.D. 1529
- The Notice of Levy annotated at the back of TCT No. 79073 being effected pursuant to the Writ
of Execution dated August 31, 1982, duly issued by the CFI (now RTC) of Quezon City proceeding
from a decision rendered in Civil Case No. 28859 in favor of herein defendant against Ernesto
Uychocde, is undoubtedly proper and appropriate because the property is registered in the name
of the judgment debtor and is not among those exempted from execution;
- Assuming without admitting that the property subject matter of this case was in fact sold by the
registered owner in favor of the herein plaintiffs, the sale is the null and void and without any legal
force and effect because it was done in fraud of a judgment creditor, the defendant Pilares.
The trial court rendered its decision on February 15, 1989. It found in favor of the Sajonas couple,
and ordered the cancellation of the Notice of Levy from Transfer Certificate of Title No. N-109417.
the court finds that although the title of the subject matter of the Notice of Levy on Execution was
still in the name of the Spouses Uychocde when the same was annotated on the said title, an earlier
Affidavit of Adverse Claim was annotated on the same title by the plaintiffs who earlier bought
said property from the Uychocdes
Pilares appealed to the Court of Appeals, assigning errors on the part of the lower court. The
appellate court reversed the lower courts decision, and upheld the annotation of the levy on
execution on the certificate of title.
The Sajonas couple are now before us, on a Petition for Review on Certiorari, praying to set aside
the Court of Appeals decision
Issues
Whether or not that the adverse claim inscribed in TCT still in force when private respondent
caused the notice of levy on execution to be registered and annotated considering that more than
30 days had already lapse since it was annotated?
Held
The adversed claim inscribed in TCT is still in force.
Refer to Section 110 of Act 496 or the Land Registration Act reads:
Sec. 110. Whoever claims any part or interest in registered lands adverse to the registered owner,
arising subsequent to the date of the original registration, may, if no other provision is made in this
Act for registering the same, make a statement in writing setting forth fully his alleged right or
interest, and how or under whom acquired, and a reference to the volume and page of the certificate
of title of the registered owner, and a description of the land in which the right or interest is claimed.
In construing the law aforesaid, care should be taken that every part thereof be given effect and a
construction that could render a provision inoperative should be avoided, and inconsistent
provisions should be reconciled whenever possible as parts of a harmonious whole. For taken in
solitude, a word or phrase might easily convey a meaning quite different from the one actually
intended and evident when a word or phrase is considered with those with which it is associated.
In ascertaining the period of effectivity of an inscription of adverse claim, we must read the law in
its entirety.
At first blush, the provision in question would seem to restrict the effectivity of the adverse claim
to thirty days. But the above provision cannot and should not be treated separately, but should be
read in relation to the sentence following, which reads:
After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a
verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the
lapse of thirty days, then it would not have been necessary to include the foregoing to clarify and
complete the rule. For then, no adverse claim need be cancelled. If it has been automatically
terminated by mere lapse of time, the law would not have required the party in interest to do a
useless act. A statutes clauses and phrases must not be taken separately, but in its relation to the
statutes totality.
A statute is passed as a whole and not in parts or sections, and is animated by one general purpose
and intent. Consequently, each part or section should be construed in connection with every other
part or section so as to produce a harmonious whole.
The law, taken together, simply means that the cancellation of the adverse claim is still necessary
to render it ineffective, otherwise, the inscription will remain annotated and shall continue as a lien
upon the property.For if the adverse claim has already ceased to be effective upon the lapse of said
period, its cancellation is no longer necessary and the process of cancellation would be a useless
ceremony.
The limitation on the period of effectivity is immaterial in determining the validity or invalidity of
an adverse claim which is the principal issue to be decided in the court hearing. It will therefore
depend upon the evidence at a proper hearing for the court to determine whether it will order the
cancellation of the adverse claim or not.
The reason why the law provides for a hearing where the validity of the adverse claim is to be
threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where
the propriety of his claimed interest can be established or revoked, all for the purpose of
determining at last the existence of any encumbrance on the title arising from such adverse claim.
Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will be
precluded from registering a second adverse claim based on the same ground.
It was held that validity or efficaciousness of the claim may only be determined by the Court upon
petition by an interested party, in which event, the Court shall order the immediate hearing thereof
and make the proper adjudication as justice and equity may warrant.
In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title No. N-79073
was still in effect on February 12, 1985 when Quezon City Sheriff Roberto Garcia annotated the
notice of levy on execution thereto. Consequently, he is charged with knowledge that the property
sought to be levied upon on execution was encumbered by an interest the same as or better than
that of the registered owner thereof. Such notice of levy cannot prevail over the existing adverse
claim inscribed on the certificate of title in favor of the petitioners.
15.
16.
17.
18.
19.
20.
21.
22. Yared v. Ilarde
FACTS:
On October 17, 1990, petitioner Estrella Tiongco Yared filed an amended complaint2 before the
Regional Trial Court against private respondents Jose B. Tiongco and Antonio Doronila, Jr for
"annulment of affidavit of adjudication, sales, transfer certificates of title, reconveyance and
damages."
Yared alleged that Tiongco, on the basis of an affidavit of adjudication dated April 17, 1974
alleging that he is the sole surviving heir of the previous owner, Maria Luis de Tiongco,
succeeded in having the subject properties registered in his name, to the prejudice of the other
surviving heir of the previous owner, petitioner among them. Petitioner and respondent
Tiongco's father were siblings, and both were among several heirs of Maria Luis de Tiongco.
The aforesaid affidavit of adjudication was registered with the Office of the Register of Deeds
of Iloilo City on May 10, 1974. Petitioner prayed that the properties be reconveyed to the
original registered owners, subject to partition among the lawful heirs, and that respondent
Tiongco be ordered to pay damages and costs.
To protect her interest in the properties during the pendency of the case, petitioner caused to be
annotated on Transfer Certificate of Title Nos. T-52547, T-4666 and T-52546,3 which covered
Lot Nos. 3244, 3246 and 1404, respectively. TCT Nos. T-92383 and T-5050 were derived or
transferred from TCT Nos. T-52547 and T-4666 respectively and registered in the name of
Tiongco.
Jose B. Tiongco, on three separate occasions, he filed motions seeking the cancellation of the
notices of lis pendens. All these motions were denied.
On December 14, 1993, the respondent judge issued a Decision6 dismissing petitioner's
complaint and private respondent's counterclaim. The trial court found that petitioner's cause of
action had already prescribed.
Petitioner filed a notice of appeal on December 17, 1993. As before, respondent Tiongco filed
a motion for cancellation of the notices of lis pendens dated December 21, 1993; this was denied
in an Order dated January 10, 1994. He filed a "Second Motion for Reconsideration" which was
also denied in an Order dated January 26, 1994. Displaying remarkable tenacity, respondent
Tiongco filed a "Third Motion for Reconsideration." This time, however, his arguments proved
persuasive. In an Order13 dated February 14, 1994, the respondent judge ruled in favor of
Tiongco.
On April 5, 1994, the Register of Deeds cancelled the annotation of notices of lis pendens
ISSUE: w/n the Court of Appeals in ordering the cancellation of the annotation of notices of lis
pendens
HELD: NO
The doctrine of lis pendens is founded upon reasons of public policy and necessity, the purpose
of which is to make known to the whole world that properties in litigation are still within the
power of the court until the litigation is terminated and to prevent the defeat of the judgment or
decree by subsequent alienation.18 The notice of lis pendens is an announcement to the whole
world that a particular real property is in litigation, and serves as a warning that one who acquires
an interest over said property does so at his own risk, or that he gambles on the result of the
litigation over said property.19
Rule 13, Section 14 of the 1997 Rules of Civil Procedure20 and Section 76 of Presidential
Decree No. 1529,21 otherwise known as the Property Registration Decree provide the statutory
bases for notice of lis pendens. From these provisions, it is clear that such a notice is proper only
in:
a) An action to recover possession of real estate; b) An action to quiet title thereto;
c) An action to remove clouds thereon;
d) An action for partition; and
e) Any other proceedings of any kind in Court directly affecting title to the land or the use or
occupation thereof or the building thereon.22
Thus, all petitioner has to do is to assert a claim of possession or title over the subject property
to put the property under the coverage of the rule.23 It is not necessary for her to prove
ownership or interest over the property sought to be affected by lis pendens.
Whether as a matter, of procedure24 or substance,25 the rule is that a notice of lis pendens may
be cancelled only on two (2) grounds, namely (1) if the annotation was for the purpose of
molesting the title of the adverse party, or (2) when the annotation is not necessary to protect
the title of the party who caused it to be recorded.
The petition should be dismissed, also, for there being a clear violation of the doctrine of judicial
hierarchy that we have taken pains to emphasize in past jurisprudence.
Thus, we ruled in Vergara v. Suelto27 that:
[t]he Supreme Court is a court of last resort, and must so remain if its is to satisfactorily perform
the functions assigned to it by fundamental charter and immemorial tradition. It cannot and
should not be burdened with the task of dealing with causes in the first instance. Its original
jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely
necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should
generally be exercised relative to actions or proceedings before the Court of Appeals, or before
constitutional or other tribunals, bodies or agencies whose acts for some reason or another, are
not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also
within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these
courts that the specific action for the writ's procurement must be presented. This is and should
continue to be the policy in this regard, a policy that courts and lawyers must strictly observe.
23.
24. AFP Mutual Benefits v. CA
Facts:
Prior to September 7, 1976, Investco, Inc. was the owner of six (6) parcels of raw land, located
in Quezon City and Marikina (Metro Manila, now a City), registered under titles in the names
of its predecessors-in-interests, Angela Perez-Staley and Antonio Perez, Jr.
On September 7, 1976, Investco, Inc. agreed to sell the six (6) parcels of land to Solid Homes
for P10,211,075.00, payable in installments from July 22, 1977 to January 22, 1983. Among
other terms, the parties agreed that Solid Homes would pay the amount of P100,000.00 as down
payment upon execution of the contract; that Solid Homes would pay P1,942,215.00 as
additional down payment on July 22, 1977, October 22, 1977, and January 22, 1978; and that
Solid Homes would pay the balance of P8,188.860.00 in ten (10) semi-annual installments for
a period of five (5) years, with interest at twelve (12%) percent per annum. The first installment
was due on July 22, 1978. Paragraph 2 of the contract stipulates that:
"Should the (Vendee) fail to pay any of the installments on the due date thereof, he shall pay
interest on the installment due at the rate of 1% per month for a total period of only two months
or pro rata thereof, and should the (Vendee) still fail to pay the installment due including interest
after the grace period of two months, the entire balance of the purchase price agreed upon shall
become immediately due and demandable, and the (Vendee) shall pay the same within a period
of thirty (30) days from the expiration of the grace period, without the need for judicial action
on the part of the (Vendor)."
The parties further agreed that Solid Homes would evict the squatters in the property or obtain
a waiver from them, that it would cause the original titles to be cancelled and new ones issued
in the name of Investco, Inc. and that Investco, Inc. would contribute one-half of the expenses
in clearing the property of occupants, in an amount not exceeding P350,000.00. On or about
March 28, 1979, the Register of Deeds of Marikina issued in favor of Investco, Inc. Transfer
Certificate of Title Nos. 36518, 36680, 36681, 36682, 36683 and 36684 covering the Marikina
portion of the property. The contract of sale to Solid Homes was not registered with the Registry
of Deeds of Marikina nor annotated on the original titles issued in the name of Investco, Inc.
However, after paying the amount of P2,042,215.00 corresponding to the downpayment, and
the amount of P4,084,430.00 representing the first four (4) semi-annual installments and a
portion of the fifth installment, Solid Homes made no further payment to Investco, Inc. after
February 19, 1981. The postdated checks issued by Solid homes to Investco, Inc. intended for
the remaining installments were dishonored, leaving a balance of P4,300,282.91 due under the
contract in Investco, Inc.s favor.
On March 13, 1981, Investco, Inc. and its predecessors-in-interests Angela Perez-Staley and
Antonio Perez, Jr. filed with the Court of First Instance of Rizal, Pasig, Branch 26 an action for
specific performance and damages against Solid Homes, Inc.[4] In the complaint, Investco, Inc.
and co-plaintiffs sought to collect from Solid Homes, Inc. the sum of P4,800,282.91
representing the balance on the purchase price due under the contract, reimbursement of
P350,000.00 representing Investco, Inc.s contribution to the expenses for eviction of squatters
and the further sum of P99,559.00 for science and transfer taxes, and actual and moral damages,
including attorneys fees.
On April 20, 1981, Solid Homes filed with the trial court an answer to Investco, Inc.s complaint
alleging that the purchase price under the contract was "not yet due" and that the former, in fact,
exceeded the installment payments due thereon. Solid Homes prayed for dismissal of Investco,
Inc.s complaint, and interposed a counterclaim for the refund of its excess payments, moral
damages in the sum of P500,000.00, and attorneys fees of P20,000.00 "or in the sum equivalent
to 10% of whatever amount is awarded in favor of defendant."[5]
On September 20, 1984, Solid Homes filed with the Register of Deeds of Marikina a notice of
lis pendens with reference to Civil Case No. 40615 requesting that the same be annotated on the
titles in Investco, Inc.s name. On the same date, the notice of lis pendens was recorded as Entry
No. 117191 of the primary Entry Book, Volume 14 of the Office of the Register of Deeds of
Marikina, Metro Manila.
However, the notice of lis pendens was not actually annotated on the titles in the name of
Investco, Inc.
On February 14, 1985, the trial court rendered judgment in favor of Investco, Inc. ordering solid
Homes to pay plaintiffs P4,800,282.91, representing the balance of the purchase price due under
the contract, with interest thereon from February 23, 1981 until paid; P99,559.00 representing
science and transfer taxes advanced by Investco to Solid Homes and P250,000.00 as attorneys
fees and expenses of litigation.[6]
On May 27, 1985, the trial court ordered the original record transmitted to the appellate court in
view of Solid Homes filing of a notice of appeal.[7]
In the meantime, on April 23, 1984, Investco, Inc. offered to sell the property to AFP Mutual
Benefit Association, Inc. for P27,079,767.00, subsequently reduced to P24,000,000.00, payable
in installments. Investco, Inc. furnished AFP MBAI with certified true copies of the titles
covering the Marikina property.
In June, 1984, AFP MBAI verified the titles with the Register of Deeds of Marikina, Metro
Manila and found that copies of the titles that Investco, Inc. gave were genuine and faithful
reproductions of the original titles on file with the Register of Deeds. AFP MBAI noted that
there were no liens or encumbrances annotated on the titles.
Moreover, AFP MBAI, through its Real Estate Committee, made an ocular inspection of the
property sometime in June and July, 1984 "to determine the nature of the property and its (metes)
and bounds." During the inspection, AFP MBAI found that the Investco, Inc. property was
underdeveloped raw land "which is mostly cogonal, (with) few trees and shrubs x x x and
bounded on one side by the Marikina River."[8] AFP MBAI confirmed the presence of squatter
shanties numbering about twenty (20) to thirty (30). Except for a foot path used by the squatters,
there was no development on the property.
After determining that the Investco property was suitable for the housing project of the Armed
Forces of the Philippines and that the titles covering the same were "clean" and "genuine," AFP
MBAI agreed to purchase the same from Investco, Inc. for the price of P24,000,000.00, payable
in installments for a period of one (1) year.
On October 10, 1984, Investco, Inc. executed a "Deed of Absolute Sale" conveying the property
to AFP MBAI for the price of P24,000,000.00, payable in installments until October 10,
1985.[9] Among other terms, Investco, Inc. warranted to AFP MBAI that "it has good and valid
title over the properties subject of (the) sale and (that it ) shall hold (AFP MBAI) free from any
adverse claim of whatever nature and from liens an encumbrances of third parties."[10]
In November, 1984, AFP MBAI again verified the records of the Register of Deeds of Marikina,
Metro Manila and confirmed "(t)he absence of any lis pendens, adverse claims or any liens or
encumbrance (on) the originals of the title(s) x x x." AFP MBAI also inquired from the
Malacaang Legal Office, the Land Registration Commission, and the Metropolitan Trial Court
of Marikina if there were cases and other problems concerning the property, but found no case
involving either Investco, Inc. or the property pending with said court and offices.[11] AFP
MBAI also obtained a certification from the Clerk of the Metropolitan Trial Court of Marikina
that Investco, Inc. "has no pending case before (that) court."[12]
In April, 1985, AFP MBAI completed its payments of the purchase price.
On April 26, 1985, the Register of Deeds of Marikina issued Transfer Certificates of Title Nos.
N-104941, N-104942, N-104943, N-104944, N-104945 and N-104946 in the name of AFP
MBAI. The titles issued were "clean" and contained no annotation of any lien, encumbrance, or
adverse claim by a third party.
On November 28, 1985, Solid Homes commenced action[13] before the Regional Trial Court,
Marikina, against the Register of Deeds, AFP MBAI and Investco, Inc. for "annotation of lis
pendens and damages" with temporary restraining order and preliminary injunction. In its
verified complaint, Solid Homes prayed that (a) the Register of Deeds be ordered to annotate on
the titles registered in the name of Investco, Inc. the notice of lis pendens dated September 19,
1984 in relation to civil Case No. 40615, and to carry over the same to the titles in the name of
AFP MBAI; (b) alternatively, to declare AFP MBAI as a buyer in bad faith, bound by the
judgment to be rendered in Civil Case No. 40615; and (c) AFP MBAI and Investco, Inc. be
ordered to pay Solid Homes jointly and severally, unspecified amount of actual, moral and
exemplary damages, as well as attorney fees of P100,000.00 plus "ten (10%) percent of the total
amount to be awarded to plaintiff." Solid Homes also prayed for an order to enjoin provisionally
the Register of Deeds from registering any deed affecting the titles in derogation of solid Homes
rights under the contract executed between itself and Investco, Inc.
In due time, AFP MBAI and Investco, Inc. filed with the trial court an answer to the complaint.
After pre-trial and trial, on April 25, 1990, the trial court rendered decision holding that:
"Accordingly, judgment is hereby rendered as follows:
1. Ordering defendant Register of Deeds for (sic) Marikina to annotate the Notice of Lis
Pendens, dated September 19, 1984 regarding Civil Case No. 40615 on the titles registered in
the name of defendant AFP MBAI, that is TCT Nos. 104941,104942, 104943, 104944 and
104945 and 104946.
2. Declaring defendant AFP MBAI as a buyer in bad faith and accordingly bound by the final
judgment in Civil Case No. 40615, RTC, Pasig, now CA-G.R. No. 13400.
3. Ordering defendant Investco, Inc. to pay plaintiff nominal damages in the amount of
P200,000.00 and exemplary damages in the amount of P100,000.00.
4. Ordering defendant AFP Mutual Benefit Association, Inc., to pay plaintiff the amount of
P50,000.00 as nominal damages and P50,000.00 as exemplary damages.
5. Ordering defendants Investco and AFP MBAI to pay attorneys fees of P50,000.00 jointly and
severally.
6. Dismissing the counterclaim of defendants.
7. Ordering private defendants to pay treble costs.
8. On the cross-claim of defendant AFP MBAI against defendant Investco, Inc., ordering the
latter to reimburse the former the amount of P11,000.00 paid pursuant to the Deed of Absolute
Sale presented for registration, Exhibit "7".
"SO ORDERED."[14]
Aggrieved thereby, AFP MBAI appealed the decision to the Court of Appeals.[15]
On November 29, 1992, the Court of Appeals rendered decision the dispositive portion of which
is quoted in the opening paragraph of this decision.
On December 24, 1991, AFP MBAI filed with the Court of Appeals a motion for reconsideration
of the decision, which Solid Homes opposed. On March 17, 1991, the Court of Appeals denied
the motion.[16]
Hence, this petition.[17]
Issue: Whether Solid Homes is entitled to the annotation of its notice of lis pendens on the titles
of Investco, Inc. and AFP Mutual Benefit Association, Inc., in relation to Civil Case No. 40615
of the Regional Trial Court, Pasig and thereby be bound by the final judgment therein.
Held: Basically, Solid Homes complaint was one for "annotation of lis pendens and other
matters with prayer for restraining order and writ of preliminary injunction" against Investco,
Inc. AFP MBAI and the Register of Deeds of Marikina, to cause the annotation of lis pendens
in the titles of Investco, Inc. and AFP MBAI. Actually, therefore, the suit is to compel the
Register of Deeds of Marikina to annotate the notice of lis pendens on the titles of AFP MBAI
with a claim for damages against Investco, Inc. and AFP MBAI for depriving Solid Homes of
its rights to the property as provided under the contract to buy and sell. In its verified complaint,
Solid Homes alleged that "the act of defendant Register of Deeds in not causing the annotation
of the lis pendens on the titles then registered in the name of defendant Investco, Inc. and in
issuing titles in the name of defendant AFP Mutual Benefit Association, Inc., without carrying
over the proper annotation of lis pendens are contrary to law".[18] On the basis of this allegation,
it prayed for an order directing the Register of Deeds of Marikina "to cause the annotation" of
the notice of lis pendens on the old and new titles.
Obviously, the Register of Deeds obligation to annotate the notice of lis pendens is one that
arises from law.[19] Hence, the action is actually one for mandamus to compel the performance
of a clear legal duty.[20] There is no such action as one for "annotation of lis pendens," as Solid
Homes sought in its complaint.
"Lis pendens is a Latin term which literally means a pending suit or a pending litigation while
a notice of lis pendens is an announcement to the whole world that a particular real property is
in litigation, serving as a warning that one who acquires an interest over the said property does
so at his own risk, or that he gambles on the result of the litigation over the said property. It is
but a signal to the intending buyer or mortgagee to take care or beware and to investigate the
prospect or non-prospect of the litigation succeeding before he forks down his money."[21]
A notice of lis pendens is not and can not be sought as a principal action for relief. "The notice
is but an incident to an action, an extra-judicial one to be sure. It does not affect the merits
thereof. It is intended merely to constructively advise, or warn, all people who deal with the
property that they so deal with it at their own risk, and whatever rights they may acquire in the
property in any voluntary transaction are subject to the results of the action, and may well be
inferior and subordinate to those which may be finally determined and laid down therein."[22]
The notice of lis pendens--that real property is involved in an action--is ordinarily recorded
without the intervention of the court where the action is pending.[23] As a settled rule, notice
of lis pendens may be annotated only where there is an action or proceeding in court which
affects title to or possession of real property.[24]
Under Presidential Decree No. 1529, known as the "Property Registration Decree of 1978", the
Register of Deeds may deny registration of the notice of lis pendens, which denial may be
appealed by the applicant en consulta (Section 10, paragraph 2) to the Commissioner of Land
Registration.[25] Section 117 of P.D. No. 1529 provides:
"When the Register of Deeds is in doubt with regard to the proper step to be taken or
memorandum to be made in pursuance of any deed, mortgage or other instrument present to him
for registration, or where any party in interest does not agree with the action taken by the
Register of Deeds with reference to any such instrument, the question shall be submitted to the
Commissioner of Land Registration by the Register of Deeds, or by the party in interest thru the
Register of Deeds.
"Where the instrument is denied registration, the Registration of Deeds shall notify the interested
party in writing, setting forth the defects of the instrument or legal grounds relied upon, and
advising him that if he is not agreeable to such ruling, he may, without withdrawing the
documents from the Registry, elevate the matter by consulta within five days from receipt of
notice of the denial of registration to the Commissioner of Land Registration.
The Register of Deeds shall make a memorandum of the pending consulta on the certificate of
title which shall be cancelled motu proprio by the Register of Deeds after final resolution or
decision thereof, or before resolution, if withdrawn by petitioner.
"The Commissioner of Land Registration considering the consulta and the records certified to
him after notice to the parties and hearing, shall enter an order prescribing the step to be taken
or memorandum to be made. His resolution of ruling in consultas shall be conclusive and
binding upon all Register of Deeds, provided, that the party in interest who disagrees with the
final resolution, ruling or order of the Commissioner relative to consultas may appeal to the
Court of Appeals within the period and in the manner provided in Republic Act No. 5434."
Here, the Register of Deeds of Marikina denied the annotation of the notice of lis pendens on
the ground that the complaint in Civil Case No. 40615 was for collection of a sum of money and
did not involve the titles to or possession of the subject property.[26] If Solid Homes did not
agree with the denial of the Register of Deeds, it could appeal the same en consulta to the
Commissioner of Land Registration.[27] The resolution of the Commissioner may then be
appealed to the Court of Appeals, which has exclusive jurisdiction to decide the same, "within
the period and in the manner provided in Republic Act No. 5434."[28]
In its questioned decision, the Court of Appeals held that the action filed by Investco, Inc.
against Solid Homes "is not exclusively for payment of the unpaid installments on the purchase
price of the subject properties and damages, but also one for rescission of the contract to sell
and to buy the subject properties executed by defendant Investco, Inc. in favor of (Solid Homes)
which necessarily involves delivery of possession and ownership of the same."[29]
We do not agree. This ruling conflicts with the final decision of the Supreme Court on the
case.[30] What is more, in determining the nature of plaintiffs (Investco, Inc.) action in Civil
Case No. 40615 and defendant Solid Homes counterclaim thereto, the Court of Appeals went
beyond the allegations in the complaint and ventured into speculation and conjecture. There is
nothing in Investcos complaint in Civil Case No. 40615 that even remotely suggests that
Investco, Inc. has rescinded the contract, or that it sought the rescission of the sale as an
alternative remedy. Specific performance and rescission are alternative remedies which a party
may not avail himself of at the same time.[31]
The nature of an action is determined by the allegations of the complaint.[32]
Investcos complaint was an action for collection of sums of money, damages and attorneys
fees[33] to recover from Solid Homes unpaid installments on the purchase price of the subject
property. To emphasize, the case was an action for collection of unpaid installments on the
purchase price subject real property. In such case, the annotation of a notice of lis pendens on
the titles of the property was not proper as the action was in personam.[34]
Consequently, the doctrine of lis pendens is inapplicable to this case. The Register of Deeds of
Marikina correctly denied the annotation of the notice of lis pendens on the titles of Investco,
Inc. and the AFP MBAI.[35]
Even on the basis of Solid Homes counterclaim, which is disregarded in determining the nature
of the action, notice of lis pendens is improper as the counterclaim was also for sums of money-
-alleged excess payment and for damages--not one affecting title to or possession of real
property. Such counterclaim did not convert the nature of the action into a real action involving
title to or possession of subject property.
The rule that "all persons dealing with property covered by Torrens Certificate of title are not
required to go beyond what appears on the face of the title"[36] applies herein with full vigor.
In the absence of anything to excite suspicion, the buyer is not obligated to look beyond the
certificate to investigate the titles of the seller appearing on the face of the certificate.[37]
"Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor
rests the burden of proof."[38] Here, Solid Homes alleged that Investco, Inc. and AFP MBAI
"confederated with each other in entering into the aforementioned sale in order to deprive herein
plaintiff (Solid Homes) of its rights over subject properties under the Contract to Sell and to
Buy..."[39] However, Solid Homes adduced no evidence to prove such allegation of bad faith.
The conclusion is inevitable that contrary to the holding of the Court of Appeals, AFP MBAI
was a purchaser in good faith and for value, and, consequently, acquired valid and indefeasible
titles to the Investco, Inc. property.
Resultantly, we find the appeal via certiorari of solid Homes[40] without merit. Its objective
was to compel AFP MBAI to execute a deed of transfer of the titles to parcels of land originally
covered by the agreement to buy and sell between Solid Homes, Inc. and Investco, Inc. and for
Solid Homes to pay AFP MBAI, in substitution of Investco, Inc. the amount of P4,800,282.91
with interest thereon at one per cent per month from March 22, 1982, until paid. Thus, if Solid
Homes would succeed in its scheme in the case, it would unjustly enrich itself enormously,
acquiring subject property now worth billions of pesos[41] for the measly sum of P4,800,282.91
with interest at one per cent a month from March 22, 1982, which it was unable to pay Investco,
Inc. in the first place.
Solid Homes claim is predicated on the assumption that AFP MBAI is a transferee pendente lite
of Investco, Inc. of the subject parcels of land and bound by the result of the suit.[42] Such claim
is not factually or legally correct. In the absence of a valid notice of lis pendens annotated in the
titles, AFP MBAI is a buyer in good faith and for value, and thus, acquired clean and valid titles
to the property in question.
WHEREFORE, the Court:
(1) In G. R. No. 104769, GRANTS the petition, and SETS ASIDE the Court of Appeals decision
in CA-G.R. CV No. 27398 and, in lieu thereof, renders judgment:
(a) dismissing the complaint in Civil Case No. 52999 of the Regional Trial Court, Pasig Branch
165;
(b) ordering the Register of Deeds of Marikina to cancel the notice of lis pendens annotated on
Transfer Certificates of Title Nos. N-104941, N-104942, N-104943, N-104944, N-104945 and
N-104946 of the Register of Deeds for Marikina, Metro Manila;
(c) Ordering respondent Solid Homes, Inc. to pay AFP MBAI P300,000.00 as attorneys fees
and expenses of litigation; and costs.
(2) In G.R. No. 135016, DENIES the petition, for lack of merit.
With costs against Solid Homes, Inc.
SO ORDERED.
25.
26.
27. Magdalena Homeowners Assoc. V. CA GR No. L-60323
FACTS:
Magdalena Estate, Inc. (MEI) located at New Manila, Quezon City owned a subdivision with a
total area of 355,490 square meters. The lot in question was Lot 15, measuring 7,100 sq.m,
which is a part of Lot 15 Block 18 had initially been set aside as the subdivision's "open space,"
i.e., reserved for use as a park, playground or recreational zone.
Subsequently, the subdivision plan was amended by substituting the earlier designated open
space with another lot covering the same area and was approved by QC City Council. The
Council authorized the subdivision to alienate Lot 15 thereafter. MEI then had the original open
space (a portion of Lot 15, Block 18) result resurveyed and subdivided into several lots. The
new plan, (LRC) Pcs-2299, was approved in due course by the Land Registration Commission.
MEI donated to the City Government certain lots in its subdivision for use as parks and
playgrounds; and the donation was ratified by the Council. After the donation of the parks and
playgrounds, MEI disposed of the entire Lot 15, Block 18 including that part thereof or
originally designated as open space (measuring 7,100 square meters). A part of Lot 15, was sold
to the Development Bank of the Philippines (DBP) by way of dacion en pago and the remaining
part were sold to third parties who thereafter constructed houses thereon.
The Magdalena homeowners association brought a suit to recover the original open space and
alleged that the Quezon City (QC) Government has no authority substituting the open space.
They have caused a notice of lis pendens be recorded at the Registry of Deeds.
The lower court rendered a favorable decision for petitioner but was appealed to CA to obtain
favorable modifications. While the case was pending, MEI and DBP filed in separate motions
praying for the cancellation of the notice of lis pendens annotated on the titles of the lots in
Block 12 of the subdivision. These motions were favorably granted. Hence, the petition at bar,
for nullification of the resolutions.
ISSUE:
W/N the CA had no jurisdiction to take cognizance of and grant the motion to cancel notice of
lis pendens since no motion had ever been filed in court a quo.
HELD:
Under Rule 14 sec 24 of the Rules of Court and Section 76 of PD 1529, a notice of lis pendens
is proper in the following cases: a) an action to recover possession of real estate; b) an action to
quiet title thereto; c) an action to remove clouds thereon; d) an action for partition; and e) any
other proceedings of any kind in Court directly affecting the title to the land or the use or
occupation thereof or the buildings thereon.
The notice of lis pendens- that the real property is involved in an action- is ordinarily recorded
w/o the intervention of the court where it is pending. The notice is an incident in an action and
merely a warning to all who deal with the property that they so deal with it at their own risk,
and whatever rights they may acquire in the property in any voluntary transactions are subject
to the results of the action, and may be inferior and subordinate to those which may be finally
determined and laid down therein. The cancellation of such precautionary notice therefore is
also a mere incident and may be ordered by the Court having jurisdiction over it at any time. Its
continuance or removal - like the continuance or removal of a preliminary attachment or
injunction is not a contingent on the existence of a final judgment in the action, and ordinarily
has no effect on the merits.
In the case at bar, CA has jurisdiction by virtue of the perfection of the petitioners appeal. The
rule that no questions may be raised for the first time on appeal have reference only to those
affecting the merits of the action, and not to mere incidents, e.g., cancellation of notices of lis
pendens, or, to repeat, the grant or dissolution of provisional remedies.
The Court of Appeals found as a fact that the case had dragged on and had been unnecessarily
prolonged by repeated amendments of the complaints by the plaintiffs, and that the
circumstances on record justified the conclusion that the annotation of the notice of lis pendens
was intended to molest and harass the defendants.
That determination, and the conclusion that Presidential Decree No. 1529 "authorizes the
cancellation of notices of lis pendens before final judgment upon order of the Court, upon the
grounds previously mentioned," are not whimsical or capricious, despotic, arbitrary or
oppressive in the premises so as to call for correction by the extraordinary remedy of certiorari.
WHEREFORE, the petition is DISMISSED, with costs against the petitioners.
IT IS SO ORDERED.

28.