SAJONAS VS.

CA
G.R. No. 102377 July 5, 1996
FACTS:
On September 22, 1983, spouses Uychocde agreed to sell a parcel of residential land
located in Antipolo, Rizal to the spouses Sajonas on installment basis as evidenced by
a Contract to Sell dated September 22, 1983. The property was registered in the names
of the Uychocde spouses under TCT No. N-79073 of the Register of Deeds of Marikina,
Rizal.
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
on September 4, 1984. The deed of absolute sale was registered almost a year after, or
on August 28, 1985.
Meanwhile, it appears that Pilares (defendant-appellant) filed a Civil Case for collection
of sum of money against Ernesto Uychocde. On June 1980, a Compromise Agreement
was entered into by the parties in the said case under which Uychocde acknowledged
his monetary obligation to Pilares amounting to P27,800 and agreed to pay the same
in two years. When Uychocde failed to comply with his undertaking in the compromise
agreement, 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. Accordingly, a writ of execution was issued on August 12, 1982 by the
CFI of Quezon City. Pursuant to the order of execution a notice of levy on
execution was issued on February 12, 1985. On the same date, defendant sheriff
Garcia of Quezon City presented said notice of levy on execution before the Register of
Deeds of Marikina and the same was annotated at the back of the TCT of the subject
land.
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 issued
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 1986, the Sajonas spouses demanded the cancellation of the notice of levy
on execution upon Pilares, through a letter to their lawyer. Despite said demand,
defendant-appellant Pilares refused to cause the cancellation of said annotation. 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.
Dissatisfied, 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.
Hence this petition.

ISSUE:
1. THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY
PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS
 ABSOLUTE INASMUCH AS IT FAILED TO READ OR CONSTRUE THE
PROVISION IN ITS ENTIRETY AND TO RECONCILE THE APPARENT
INCONSISTENCY WITHIN THE PROVISION IN ORDER TO GIVE EFFECT TO IT
AS A WHOLE.

HELD: ACCORDINGLY, the assailed decision of the respondent CA dated October 17,
1991 is hereby REVERSED and SET ASIDE. The decision of the RTC finding for the
cancellation of the notice of levy on execution from Transfer Certificate of Title No. N-
109417 is hereby REINSTATED. The inscription of the notice of levy on
execution on TCT No. N-109417 is hereby CANCELLED.

The question may be posed, was the adverse claim inscribed in the TCT still in force
when private respondent caused the notice of levy on execution to be registered and
annotated in the said title, considering that more than thirty days had already lapsed
since it was annotated ? (Pilares argues that the adverse claim ceases to have any
legal force and effect (30) days after August 27, 1984 pursuant to Section 70 of P.D.
1529)
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.
Sentence three, paragraph two of Section 70 of P.D. 1529 provides:

“The adverse claim shall be effective for a period of thirty days from the date of
registration.”

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 caveat 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. 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.
To hold otherwise would be to deprive petitioners of their property, who waited a long
time to complete payments on their property, convinced that their interest was amply
protected by the inscribed adverse claim.

In sum, the disputed inscription of an adverse claim on the TCT 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 the 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

NOTES:
1. Concededly, annotation of an adverse claim is a measure designed to protect the
interest of a person over a piece of real property where the registration of such interest
or right not otherwise provided for by the Land Registration Act or Act 496 (now P.D.
1529 or the Property Registration Decree), and serves a warning to third parties
dealing with said property that someone is claiming an interest on the same or a
better right than that of the registered owner thereof. Such notice is registered by filing
a sworn statement with the Register of Deeds of the province where the property is
located, setting forth the basis of the claimed right together with other dates pertinent
thereto.

2. Under the Torrens system, registration is the operative act which gives validity to
the transfer or creates a lien upon the land. A person dealing with registered land is
not required to go behind the register to determine the condition of the property. He is
only charged with notice of the burdens on the property which are noted on the face of
the register or certificate of title, but nevertheless he is bound by the liens and
encumbrances annotated thereon. One who buys without checking the vendor’s title
takes all the risks and losses consequent to such failure

3. A subsequent sale of property covered by a Certificate of Title cannot prevail over an

adverse claim, duly sworn to and annotated on the certificate of title previous to the
sale.

4. Before the lapse of thirty days, the claimant may withdraw his adverse claim by
filing with the Register of Deeds a sworn petition to that effect

1. As to whether or not the petitioners are buyers in good faith of the subject
property, the same should be made to rest on the findings of the trial court. As
pointedly observed by the appellate court, “there is no question that plaintiffs-
appellees were not aware of the pending case filed by Pilares against Uychocde at the
time of the sale of the property by the latter in their favor.” This was clearly elicited
from the testimony of Conchita Sajonas, wife of plaintiff, during cross-examination
A purchaser in good faith and for value is one who buys property of another without
notice that some other person has a right to or interest in such property and pays a
full and fair price for the same, at the time of such purchase, or before he has notice of
the claims or interest of some other person in the property. Good faith consists in an
honest intention to abstain from taking an unconscientious advantage of
another, Thus, the claim of the private respondent that the sale executed by the
spouses was made in fraud of creditors has no basis in fact, there being no evidence
that the petitioners had any knowledge or notice of the debt of the Uychocdes in favor
of the private respondent, nor of any claim by the latter over the Uychocdes’ properties
or that the same was involved in any litigation between said spouses and the private
respondent. While it may be stated that good faith is presumed, conversely, bad faith
must be established by competent proof by the party alleging the same. Sans such
proof, the petitioners are deemed to be purchasers in good faith, and their interest in
the subject property must not be disturbed.

6. At any rate, the Land Registration Act (Property Registration Decree) guarantees to
every purchaser of registered land in good faith that they can take and hold the same
free from any and all prior claims, liens an encumbrances except those set forth on
the Certificate of Title and those expressly mentioned in the ACT as having been
reserved against it. Otherwise, the efficacy of the conclusiveness of the Certificate of
Title which the Torrens system seeks to insure would be futile and nugatory