STATUTORY CONSTRUCTION

Sajonas vs Court of Appeals

Timeline of Events: January 1986, the Sajonas spouses demanded the
Pilares (defendant-appellant) filed cancellation of the notice of levy on execution upon Pilares,
a Civil Case for collection of sum through a letter to their lawyer. Despite said demand,
of money against Ernesto defendant-appellant Pilares refused to cause the cancellation
Uychocde. of said annotation.

June 1980 August 3, 1982 August 12, 1982 September 22, 1983 August 27, 1984 September 4, 1984 February 12, 1985 August 22, 1985 August 28, 1985 October 21, 1985

Spouses Uychocde The Sajonas The Uychocdes The deed of When the deed of
agreed to sell a parcel couple caused executed a absolute sale absolute sale dated
of residential land the annotation of Deed of Sale was September 4, 1984 was
located in Antipolo, an adverse involving the registered registered, TCT No. N-
Rizal to the spouses claim based on property in almost a year 79073 was cancelled
Sajonas on installment the said question in favor after and in lieu thereof, TCT
basis as evidenced by a Contract to Sell of the Sajonas No. N-109417 was
Contract to Sell dated on the title of the couple upon the issued in the name of
September 22, 1983. subject property, full payment of the Sajonas couple.
A Compromise Pilares moved for
The property was which was the purchase The notice of levy on
Agreement was the issuance of a
registered in the names inscribed as price. execution annotated by
entered into by the writ of execution to
of the Uychocde Entry No. defendant sheriff was
parties in the said enforce the decision
spouses under TCT No. 116017. carried over to the new
case under which based on the Pursuant to the order of execution
N-79073 of the Register title.
Uychocde compromise a notice of levy on execution was
acknowledged his agreement, which of Deeds of Marikina, issued.
Rizal. the Sajonas couple filed
monetary obligation the court granted in
On the same date, defendant a Third Party Claim with
to Pilares its order When
A writ of execution was issued. sheriff Garcia of Quezon City the sheriff of Quezon
amounting to Uychocde failed to
presented said notice of levy on City, hence the auction
P27,800 and comply with his
execution before the Register of sale of the subject
agreed to pay the undertaking in the
Deeds of Marikina and the same property did not push
same in two years. compromise
was annotated at the back of the through as scheduled
agreement.
TCT of the subject land.
Rulings:
RTC:

In view thereof, plaintiffs-appellees filed a complaint in the RTC of Rizal, against Pilares, the judgment creditor of the
Uychocdes. The trial court rendered its decision in favor of the Sajonas couple, and ordered the cancellation of the Notice
of Levy from TCT No. N-109417. The court a quo stated, thus:

…It is a well settled rule in this jurisdiction that actual notice of an adverse claim is equivalent to registration and the
subsequent registration of the Notice of Levy could not have any legal effect in any respect on account of prior inscription
of the adverse claim annotated on the title of the Uychocdes.

On the issue of whether or not plaintiffs (Sajonas) are buyers in good faith of the property of the spouses Uychocde even
notwithstanding the claim of the defendant that said sale executed by the spouses was made in fraud of creditors, the
Court finds that the evidence in this instance is bare of any indication that said plaintiffs as purchasers had notice
beforehand of the claim of the defendant over said property or that the same is involved in a litigation between said
spouses and the defendant. Good faith is the opposite of fraud and bad faith, and the existence of any bad faith must be
established by competent proof.
Rulings:
RTC:

In view thereof, plaintiffs-appellees filed a complaint in the RTC of Rizal, against Pilares, the judgment creditor of the Uychocdes. The
trial court rendered its decision in favor of the Sajonas couple, and ordered the cancellation of the Notice of Levy from TCT No.
N-109417. The court a quo stated, thus:

…It is a well settled rule in this jurisdiction that actual notice of an adverse claim is equivalent to registration and the
subsequent registration of the Notice of Levy could not have any legal effect in any respect on account of prior
inscription of the adverse claim annotated on the title of the Uychocdes.

On the issue of whether or not plaintiffs (Sajonas) are buyers in good faith of the property of the spouses Uychocde even
notwithstanding the claim of the defendant that said sale executed by the spouses was made in fraud of creditors, the Court finds
that the evidence in this instance is bare of any indication that said plaintiffs as purchasers had notice beforehand of the claim of
the defendant over said property or that the same is involved in a litigation between said spouses and the defendant. Good faith is
the opposite of fraud and bad faith, and the existence of any bad faith must be established by competent proof.

CA:

Pilares appealed to the CA assigning errors on the part of the lower court. The appellate court reversed the lower court’s decision,
and upheld the annotation of the levy on execution on the certificate of title. The respondent appellate court upheld private
respondents’ theory when it ruled:

The above staled conclusion of the lower court is based on the premise that the adverse claim filed by plaintiffs-
appellees is still effective despite the lapse of 30 days from the date of registration. However, under the provisions
of Section 70 of P.D. 1529, an adverse claim shall be effective only for a period of 30 days from the date of its registration.