THIRD DIVISION On September 21, 1994, petitioner filed a Motion for Leave to Amend
Complaint,[10] alleging that there were some mistaken and inadequate
G.R. No. 161419, August 25, 2009
EUGENIO ENCINARES, Petitioner, vs. DOMINGA
ACHERO, Respondent.
DECISION
NACHURA, J.:
Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of
the Rules of Civil Procedure, seeking the reversal of the Court of Appeals
(CA) Decision[2] dated April 28, 2003 which reversed and set aside the
Decision[3] dated January 20, 2000 of the Regional Trial Court (RTC) of
Sorsogon, Sorsogon, Branch 52.
The Facts
On July 13, 1989, petitioner Eugenio Encinares (petitioner) filed a
Complaint[4] for Quieting of Title and Reconveyance against respondent
Dominga Achero[5] (respondent). Petitioner alleged that he bought several
parcels of land from Roger U. Lim as evidenced by a Deed of Absolute
Sale of Real Properties[6] dated April 9, 1980. Among these was the
subject property, a parcel of land dedicated to abaca production,
containing 16,826 square meters, known as Lot No. 1623, and situated in
Sitio Maricot, BarangayBuraburan, Juban, Sorsogon (subject
property). He, however, discovered that, sometime in June 1987,
respondent was able to register the said property and cause it to be titled
under the Free Patent System.
Petitioner asseverated that he is the owner and actual possessor of the
subject property which is covered by Tax Declaration No. 07132. He
claimed that, for more than thirty (30) years, he had been in actual,
continuous, adverse, and open possession in the concept of an owner of
the subject property, tacking the possession of his predecessors-in-
interest. However, sometime in June 1987, the respondent, by means of
misrepresentation, fraud, deceit, and machination, caused one-half portion
of the subject property to be titled in her name under the Free Patent
System. Petitioner alleged that, despite the fact that respondents
application has no legal basis as she is not the owner and actual
possessor of the subject property, a free patent was issued in her favor
and Original Certificate of Title (OCT) No. P-23505, covering an area of
23,271 square meters, was issued in her name.Thus, petitioner postulated
that, with the inclusion of one-half portion of his property, the issuance of
said title casts doubt on his ownership over the same. Moreover, petitioner
demanded that respondent execute in his favor a deed of reconveyance
involving the portion of his land, which is now covered by respondents
title, but the latter refused, compelling him to file this case. Petitioner,
therefore, prayed that he be declared the owner and actual possessor of
the subject property and that respondent be ordered to execute a deed of
reconveyance in his favor.
In her Answer[7] dated September 7, 1989, respondent denied petitioner's
material allegations and, by way of affirmative defense, averred that the
complaint constituted an indirect and collateral attack on her title, which is
not allowed, and rendered the complaint defective, thereby requiring its
dismissal. Respondent alleged that OCT No. P-23505 was issued under
her name and the property covered by the OCT is exclusively hers and
does not include petitioner's property.
Upon joint motion of the parties, the RTC issued an Order[8] dated March
9, 1990, directing a duly authorized representative/surveyor of the Bureau
of Lands to conduct a relocation survey on the two (2) parcels of land
involved in the case, namely: Lot No. 1623 and the lot covered by OCT
No. P-23505.
Subsequently, Engineer Eduardo P. Sabater submitted his
Commissioners Report[9] (Report) on August 3, 1993. The Report stated
that the limits of the common boundaries of the parties were defined by
large trees and stones marked by X. The Report also stated that the
actual area as claimed by petitioner contained 19,290 square meters,
while that of respondent contained 3,981 square meters.
allegations in the original complaint, and that the amendments to be made
would not substantially change the cause of action in the complaint.
Because no objection was interposed by respondents counsel, the Motion
was granted by the RTC in an Order[11] dated October 18, 1994.
On October 20, 1994, petitioner filed the Amended Complaint, [12] inserting
the word ENTIRE in paragraph four (4) thereof. Thus, petitioner averred
that respondent, through fraud, caused the ENTIRE area of the above-
described land to be titled under the Free Patent System. For her part,
respondent manifested that she would no longer file an answer to the
Amended Complaint. Thereafter, trial on the merits ensued. In January
1996, respondent passed away.[13] Respondent was duly substituted by
her son, Vicente Achero (Vicente).[14]
The RTC's Ruling
On January 20, 2000, the RTC rendered a Decision in favor of petitioner,
declaring him as the absolute owner of Lot 1623-B, containing an area of
19,290 square meters. The RTC declared that while Section 32[15] of
Presidential Decree (P.D.) No. 1529 (The Property Registration Decree)
provides that a decree of registration and certificate of title become
incontrovertible after the lapse of one year, the aggrieved party whose
land has been registered through fraud in the name of another person
may file an ordinary civil action for reconveyance of his property, provided
that the same had not been transferred to innocent purchasers for value.
Thus, the RTC disposed of the case in this wise:
WHEREFORE, premises considered, judgment is
hereby rendered in favor of the plaintiff and against
the defendant, to wit:
1. Declaring plaintiff Eugenio Encinares the absolute
owner of Lot 1623-B containing an area
of 19,290 sq. m. which is a portion
included in OCT No. P-23505 in the
name of Dominga Achero of the Registry
of Deeds of Sorsogon;
2. Declaring OCT No. P-23505 covering Lot 1623
with an area of 19,290 sq. m. in the
name of the defendant Dominga Achero
as null and void[;]
3. Ordering the defendant Dominga Achero and/or
Vicente Achero to reconvey that portion
found in the Relocation Survey Report
marked as Exh. R and denominated as
Lot 1623-B as surveyed for Eugenio
Encinares and Dominga Achero[;]
4. Ordering the Register of Deeds of Sorsogon to
make an annotation on the Certificate of
Title No. P-23505 covering the land in
question as the same was fraudulently
procured[;]
5. Dismissing the counterclaim of the defendants[;]
[6.] Ordering the defendant to pay the costs.
SO ORDERED.[16]
Aggrieved, respondent appealed to the CA.[17]
The CA's Ruling
On April 28, 2003, the CA reversed and set aside the RTC's ruling, upheld
the validity of OCT No. P-23505, and dismissed the complaint for quieting
of title and reconveyance filed by petitioner. The CA held that the RTC
erred in declaring OCT No. P-23505 as null and void because in an action
for reconveyance, the decree of registration is respected as
incontrovertible. Moreover, the CA held that petitioner failed to prove by
clear and convincing evidence his title to the subject property and the fact
of fraud. Petitioner's evidence, consisting of tax declarations and deeds of
sale, acknowledged that the subject property had not been registered.
Likewise, the CA noted that petitioner's evidence showed that the
possession of his predecessors-in-interest started only sometime in 1951;
thus, petitioner could be presumed to have acquired a title pursuant to
Section 48(b)[18] of Commonwealth Act 141 (The Public Land Act) as
amended by P.D. No. 1073. The CA opined that it was erroneous for the
RTC to award 19,290 square meters to petitioner when the Deed of
Absolute Sale of Real Properties, from which he allegedly derived his
rights, stated that the lot sold to him consisted only of 16,826 square
meters. Lastly, the CA found no irregularity in the issuance of the Free
Patent and OCT No. P-23505.
Undaunted, petitioner filed a Motion for Reconsideration,[19] which the CA,
however, denied in its Resolution[20] dated December 19, 2003. Hence this
Petition, raising the following issues:
I.
WHETHER THE HONORABLE COURT OF
APPEALS GRAVELY ERRED IN REVERSING
AND SETTING ASIDE THE DECISION OF THE
REGIONAL TRIAL COURT.
II.
WHETHER THE PETITIONER HAS THE RIGHT
TO SEEK THE RECONVEYANCE OF
THE SUBJECT LAND WHICH WAS
WRONGFULLY REGISTERED IN THE NAME OF
THE RESPONDENT.[21]
Petitioner claims that the subject property was sold by Simeon Achero
(Simeon),[22] eldest son of Eustaqio Achero[23] (Eustaqio), to Cecilia Grajo
who, in turn, sold the same to Cipriano Bardilo.[24] Subsequently, Cipriano
Bardilo sold the subject property to Pedro Guevarra, [25] who then sold the
same to Roger Lim,[26] from whom petitioner bought the subject property in
1980. Petitioner asserts that he has been in actual, continuous, adverse,
and open possession in the concept of an owner thereof for more than
thirty (30) years when tacked with the length of possession of his
predecessors-in-interest; and that he has introduced some improvements
on the subject property and has been enjoying its produce. Petitioner
argues that contrary to the CA's findings, he was able to prove by
preponderance of evidence that he is the true and actual owner of the
subject property; that he has equitable title thereto; and that there was
fraud in the acquisition of the Free Patent. Petitioner also argues that, as
pointed out by the RTC, the tax declarations[27] of petitioner and his
predecessors-in-interest show that, in fact, petitioner, as well as his
predecessors-in-interest, has been in actual possession of the subject
property since 1951 or even prior thereto; that the factual findings of the
RTC in this case should not have been disturbed by the CA, as the
former's findings were clearly based on evidence; and that the law
protects only holders of title in good faith and does not permit its
provisions to be used as a shield for the commission of fraud or for ones
enrichment at the expense of another.[28]
On the other hand, respondent avers that the subject property had been
originally claimed, occupied and cultivated since 1928 by Eustaqio, father
of Simeon and father-in-law of respondent. Before Eustaqio died in 1942,
he gave the subject property to respondent, as evidenced by the Joint
Affidavit[29] of Dalmacio Venus and Elias Aurelio. Respondent continued
the possession, occupation and cultivation of the subject property in the
concept of an owner up to the present. On October 1, 1986, respondent
executed a Deed of Ratification and Confirmation of
Ownership.[30] Documents were submitted to the Bureau of Lands, which
conducted an ocular inspection and relocation survey and issued a Final
Investigation Report.[31] Finding respondent's application for a Free Patent
to be proper in form and substance, and in accordance with law, the same
was granted per Order: Approval of Applications and Issuance of
Patent.[32] Subsequently, OCT No. P-23505, covering the subject property
with a total area of 23,271 square meters, was issued in favor of
respondent. Respondent manifested that she was unlettered, and that her
only preoccupation was working on the land like other ordinary tillers. As
such, in the absence of evidence, petitioner could not validly claim that
respondent employed fraud in the application and issuance of a Free
Patent, in the same way that no fraud attended the issuance of OCT No.
P-23505. Respondent relied on the presumption of regularity in the
performance of official functions of the personnel of the Bureau of
Lands.[33]
Simply put, the main issue is who, between petitioner and respondent, has
a better right over the subject property.
Our Ruling
The instant Petition is bereft of merit.
While factual issues are not within the province of this Court, as it is not a
trier of facts and is not required to examine or contrast the oral and
documentary evidence de novo, this Court has the authority to review and,
in proper cases, reverse the factual findings of lower courts when the
findings of fact of the trial court are in conflict with those of the appellate
court.[34] In this light, our review of the records of this case is justified.
In essence, petitioner seeks relief before this Court, on the contention that
the registered Free Patent from which respondent derived her title had
been issued through fraud.
We reject petitioner's contention.
A Free Patent may be issued where the applicant is a natural-born citizen
of the Philippines; is not the owner of more than twelve (12) hectares of
land; has continuously occupied and cultivated, either by himself or
through his predecessors-in-interest, a tract or tracts of agricultural public
land subject to disposition, for at least 30 years prior to the effectivity of
Republic Act No. 6940; and has paid the real taxes thereon while the
same has not been occupied by any other person.[35]
Once a patent is registered and the corresponding certificate of title is
issued, the land covered thereby ceases to be part of public domain,
becomes private property, and the Torrens Title issued pursuant to the
patent becomes indefeasible upon the expiration of one year from the
date of such issuance. However, a title emanating from a free patent
which was secured through fraud does not become indefeasible, precisely
because the patent from whence the title sprung is itself void and of no
effect whatsoever.[36]
On this point, our ruling in Republic v. Guerrero,[37] is instructive:
Fraud is of two kinds: actual or constructive. Actual
or positive fraud proceeds from an intentional
deception practiced by means of the
misrepresentation or concealment of a material
fact. Constructive fraud is construed as a fraud
because of its detrimental effect upon public
interests and public or private confidence, even
though the act is not done with an actual design to
commit positive fraud or injury upon other persons.
Fraud may also be either extrinsic or intrinsic.
Fraud is regarded as intrinsic where the fraudulent
acts pertain to an issue involved in the original
action, or where the acts constituting the fraud
were or could have been litigated therein. The
fraud is extrinsic if it is employed to deprive
parties of their day in court and thus prevent
them from asserting their right to the property
registered in the name of the applicant.
The distinctions assume significance because only
actual and extrinsic fraud had been accepted
 and is contemplated by the law as a ground to
review or reopen a decree of registration. Thus,
relief is granted to a party deprived of his interest in
land where the fraud consists in a deliberate
misrepresentation that the lots are not contested
when in fact they are; or in willfully misrepresenting
that there are no other claims; or in deliberately
failing to notify the party entitled to notice; or in
inducing him not to oppose an application; or in
misrepresenting about the identity of the lot to the
true owner by the applicant causing the former to
withdraw his application. In all these examples, the
overriding consideration is that the fraudulent
scheme of the prevailing litigant prevented a party
from having his day in court or from presenting his
case. The fraud, therefore, is one that affects and
goes into the jurisdiction of the court.
We have repeatedly held that relief on the ground
of fraud will not be granted where the alleged fraud
goes into the merits of the case, is intrinsic and not
collateral, and has been controverted and decided.
Thus, we have underscored the denial of relief
where it appears that the fraud consisted in the
presentation at the trial of a supposed forged
document, or a false and perjured testimony, or in
basing the judgment on a fraudulent compromise
agreement, or in the alleged fraudulent acts or
omissions of the counsel which prevented the
petitioner from properly presenting the case.[38]
No actual and extrinsic fraud existed in this case; at least, no convincing
proof of such fraud was adduced. Other than his bare allegations,
petitioner failed to prove that there was fraud in the application,
processing and grant of the Free Patent, as well as in the issuance of
OCT No. P-23505. Neither was it proven that respondent actually took
part in the alleged fraud. We agree with the judicious findings of the CA, to
wit:
It must be mentioned though that the records of the
case do not show that there has been any
irregularity in the issuance of the Free Patent or the
OCT for that matter, as, despite the posting of the
notice of appellants application for Free Patent, the
appellee filed his opposition/protest (Exhibit
O, Record[s], p. 31) thereto only after the same
had already been issued in favor the appellant. The
fact that appellee is in possession of several tax
declarations and deeds of sale over the property,
the earliest of which was in the year 1951, does not
in any way refute appellants allegation in her
application that she inherited the property and that
her predecessor-in-interest possessed the property
even before the Japanese occupation. Moreover,
the evidence also show that the Bureau of Lands
conducted an investigation (Investigation Report,
Exhibit 9, Record[s], p. 195) of the application and
found that the appellant was entitled to the parcel
of land she was applying for.[39]
Petitioner's heavy reliance on the tax declarations in his name and in the
names of his predecessors-in-interest is unavailing. We hold that while it
is true that tax declarations and tax receipts are good indicia of
possession in the concept of an owner, the same must be accompanied
by possession for a period sufficient for acquisitive prescription to set in.
By themselves, tax declarations and tax receipts do not conclusively prove
ownership.[40]
It was established that respondent was clearly in possession of the subject
property.[41] Thus, notwithstanding the existence of the tax declarations
issued in favor of petitioner, it was not refuted that respondent and her
successors were and are still in actual possession and cultivation of the
subject property, and, in fact, the respondent also declared in her name
the subject property for taxation purposes. These circumstances further
boost respondent's claim that, from the start, she believed that the subject
property was exclusively hers.
We reiterate our recent ruling in Rabaja Ranch Development Corporation
v. AFP Retirement and Separation Benefits System,[42] to wit:
The Torrens system is not a mode of acquiring
titles to lands; it is merely a system of registration
of titles to lands, x x x justice and equity demand
that the titleholder should not be made to bear the
unfavorable effect of the mistake or negligence of
the State's agents, in the absence of proof of his
complicity in a fraud or of manifest damage to third
persons. The real purpose of the Torrens system is
to quiet title to land and put a stop forever to any
question as to the legality of the title, except claims
that were noted in the certificate at the time of the
registration or that may arise subsequent thereto.
Otherwise, the integrity of the Torrens system shall
forever be sullied by the ineptitude and inefficiency
of land registration officials, who are ordinarily
presumed to have regularly performed their duties.
The general rule that the direct result of a previous
void contract cannot be valid[, is inapplicable] in
this case as it will directly contravene
the Torrens system of registration. Where innocent
third persons, relying on the correctness of the
certificate of title thus issued, acquire rights over
the property, this Court cannot disregard such
rights and order the cancellation of the certificate.
The effect of such outright cancellation will be to
impair public confidence in the certificate of title.
The sanctity of the Torrens system must be
preserved; otherwise, everyone dealing with the
property registered under the system will have to
inquire in every instance as to whether the title had
been regularly or irregularly issued, contrary to the
evident purpose of the law. Every person dealing
with the registered land may safely rely on the
correctness of the certificate of title issued therefor,
and the law will, in no way, oblige him to go behind
the certificate to determine the condition of the
property.
All told, we find no reversible error which will justify our having to disturb,
much less, reverse the assailed CA Decision.
WHEREFORE, the instant Petition is DENIED and the assailed Court of
Appeals Decision is AFFIRMED. Costs against petitioner.
SO ORDERED.
 SECOND DIVISION
SO ORDERED.
G.R. No. 162218 February 25, 2010
Meanwhile, on 29 December 1982, the government issued Free Patents in favor of
METROPOLITAN BANK AND TRUST COMPANY, Petitioner, Viray over three parcels of land (lots) designated as (1) Lot No. 26275, Cad-237
vs. with an area of 500 square meters; (2) Lot No. 26276, Cad-237, with an area of 888
EDGARDO D. VIRAY, Respondent square meters; and (3) Lot No. 26277, Cad-237 with an area of 886 square meters,
all situated in Barangay Bulua, Cagayan de Oro City, Misamis Oriental. Original
DECISION Certificate of Title (OCT) Nos. P-2324, P-2325 and P-2326 were issued covering
Free Patent Nos. [X-1] 10525, [X-1] 10526 and [X-1] 10527, respectively.

CARPIO, J.:
The Case
Before the Court is a petition for review on certiorari[1] assailing the Decision[2] dated
21 August 2003 and Resolution[3] dated 13 February 2004 of the Court of Appeals
(CA) in CA-G.R. CV No. 43926, which reversed the Decision[4] dated 21 September
2003 of the Regional Trial Court (RTC) of Cagayan de Oro City, Misamis Oriental,
Branch 23, in Civil Case No. 91-309.
The Facts
The OCTs containing the free patents were registered with the Registry of Deeds of
Cagayan de Oro City on 18 January 1983. Written across the face of the OCTs
were the following:
x x x To have and to hold said tract of land, with the
appurtenances thereunto of right belonging unto the said
EDGARDO D. VIRAY and to his heirs and assigns forever,
subject to the provisions of Sections 118, 119, 121 as
amended by P.D. No. 763, 122 and 124 of Commonwealth
Act No. 141, as amended, which provide that except in
favor of the Government or any of its branches, units or
institutions, the land thereby acquired shall be
inalienable and shall not be subject to encumbrance for a
period of five (5) years from the date of this patent, and
shall not be liable for the satisfaction of any debt contracted
prior to the expiration of said period x x x.[7]

On 6 March 1984, the RTC of Manila issued a writ of execution over the lots owned
On 7 July 1979, Rico Shipping, Inc., represented by its President, Erlinda Viray-
by Viray. On 12 October 1984, pursuant to the writ of execution, the City Sheriff of
Jarque, together with respondent Edgardo D. Viray (Viray), in their own personal
Cagayan de Oro sold the lots at public auction in favor of MBTC as the winning
capacity and as solidary obligors (the three parties collectively known as the
bidder. The next day, the sheriff issued a Certificate of Sale to MBTC.[8]
debtors), obtained two separate loans from petitioner Metropolitan Bank and Trust
Company (MBTC) in the total amount of P250,000. The debtors executed a
On 23 August 1990, the sheriff executed a Deed of Final Conveyance to
promissory note promising to pay in four semi-annual installments of P62,500
MBTC. The Register of Deeds of Cagayan de Oro City cancelled OCT Nos. P-2324,
starting on 23 January 1980, with 15% interest and 2% credit evaluation and
P-2325 and P-2326 and issued in MBTCs name Transfer Certificate of Title (TCT)
supervision fee per annum. The two loans were subsequently renewed and secured
Nos. T-59171, T-59172 and T-59173,[9] respectively.
by one promissory note. Under the note, the debtors made a total payment
of P134,054 leaving a balance of P115,946 which remained unpaid despite
On 30 July 1991, Viray filed an action for annulment of sale against the sheriff and
demands by MBTC.
MBTC with the RTC of Cagayan de Oro City, Misamis Oriental, Branch 23.[10] Viray
sought the declaration of nullity of the execution sale, the sheriffs certificate of sale,
On 5 June 1981, the debtors executed another promissory note and obtained a
the sheriffs deed of final conveyance and the TCT's issued by the Register of
loan from MBTC in the amount of P50,000, payable on 2 November 1981, with 16%
Deeds.
interest and 2% credit evaluation and supervision fee per annum. On the due date,
the debtors again failed to pay the loan despite demands to pay by MBTC.
On 21 September 1993, the RTC of Cagayan de Oro City rendered its decision in
favor of MBTC.[11] The dispositive portion states:
On 3 September 1981, the debtors obtained a third loan from MBTC in the amount
of P50,000 payable on 14 November 1981, with 16% interest and 2% credit
Wherefore, based on facts and jurisprudence, the Auction
evaluation and supervision fee per annum. Again, the debtors failed and refused to
Sale by the Sheriff of the then lots of plaintiff covered by
pay on due date.
[free] patents to satisfy the judgment in favor of Defendant
Bank is considered valid. While plaintiff had until April 2,
MBTC filed a complaint for sum of money against the debtors with the RTC of
1991 to redeem the property, the former never attempted
Manila, Branch 4.[5] On 28 April 1983, the RTC of Manila rendered a judgment in
to show interest in redeeming the properties, and therefore
favor of MBTC.[6] The dispositive portion of the decision states:
such right has prescribed. Defendant Bank therefore is
WHEREFORE, judgment is hereby rendered ordering
declared as the lawful transferee of the three (3) lots now
defendants to pay jointly and severally plaintiff the
covered by Titles in the name of Defendant Bank.
following:
SO ORDERED.[12]
I On the first cause of action:
(a) The sum of P50,000 with interest thereon at the
rate of 16% per annum from date of filing of
Viray filed an appeal with the CA alleging that the RTC of Cagayan de Oro City
the complaint until fully paid;
committed reversible error in ruling solely on the issue of redemption instead of the
(b) The sum equivalent to 1% per month of the
issue of validity of the auction sale, being the lis mota[13] of the action.
principal obligation as penalty charge,
computed likewise from the filing of the
The Ruling of the Court of Appeals
complaint;
On 21 August 2003, the appellate court reversed the decision of the RTC of
II On the second cause of action:
Cagayan de Oro City. The CA ruled that the auction sale conducted by the
(a) The sum of P50,000 with interest thereon at the
sheriff was null and void ab initio since the sale was made during the five-
rate of 16% per annum from date of filing of
year prohibition period in violation of Section 118 of Commonwealth Act No.
the complaint until fully paid;
141 (CA 141) or the Public Land Act. The dispositive portion states:
(b) The sum equivalent to 1% per month of the principal sum as penalty charge,
computed from date of filing of the complaint;
WHEREFORE, in view of the foregoing considerations, the
decision appealed from is hereby REVERSED, and
III On the third cause of action:
plaintiff-appellant Edgardo Viray is declared entitled to the
(a) The sum of P115,946.00 with interest thereon at
return and possession of the three (3) parcels of land
the rate of 1% per annum from date of filing of
covered by O.C.T. Nos. P-2324, P-2325 and P-2326,
the complaint until fully paid;
without prejudice to his continuing obligation to pay the
(b) The sum equivalent to 1% per month of the sum of P115,946.00 as penalty
judgment debt, and expenses connected therewith.
charge, computed from date of filing of the complaint;
Accordingly, the Register of Deeds of Cagayan de Oro City is ordered to cancel
IV
TCT Nos. T-59171, T-59172 and T-59173 in the name of defendant-appellee
(1) The sum of P15,000.00 as attorneys fees; and
(2) To pay the costs of suit.
Metrobank, and to restore O.C.T. Nos. P-2324, P-2325 and P-2326 in the name of
plaintiff-appellant Edgardo Viray.
No pronouncement as to costs.
SO ORDERED.[14]
MBTC filed a Motion for Reconsideration which was denied in a Resolution dated
13 February 2004.
Hence, the instant petition.
The Issue
The main issue is whether the auction sale falls within the five-year prohibition
period laid down in Section 118 of CA 141.
The Courts Ruling
The petition lacks merit.
Petitioner MBTC insists that the five-year prohibition period against the alienation or
sale of the property provided in Section 118 of CA 141 does not apply to an
obligation contracted before the grant or issuance of the free patent or
homestead. The alienation or sale stated in the law pertains to voluntary sales and
not to forced or execution sales.
Respondent Viray, on the other hand, maintains that the express prohibition in
Section 118 of CA 141 does not qualify or distinguish whether the debt was
contracted prior to the date of the issuance of the free patent or within five years
following the date of such issuance. Further, respondent asserts that Section 118 of
CA 141 absolutely prohibits any and all sales, whether voluntary or not, of lands
acquired under free patent or homestead, made within the five-year prohibition
period.
Section 118 of CA 141 states:
SECTION 118. Except in favor of the Government or any
of its branches, units, or instruction, lands acquired under
free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of
the application and for a term of five years from and after
the date of issuance of the patent and grant, nor shall they
become liable to the satisfaction of any debt contracted
prior to the expiration of said period, but the improvements
or crops on the land may be mortgaged or pledged to
qualified persons, associations, or corporations.
No alienation, transfer, or conveyance of any homestead after five years and before
twenty-five years after issuance of title shall be valid without the approval of the
Secretary of Agriculture and Natural Resources, which approval shall not be denied
except on constitutional and legal grounds.
The law clearly provides that lands which have been acquired under free patent or
homestead shall not be encumbered or alienated within five years from the date of
issuance of the patent or be liable for the satisfaction of any debt contracted prior to
the expiration of the period.
In the present case, the three loans were obtained on separate dates 7 July 1979, 5
June 1981 and 3 September 1981, or several years before the free patents on the
lots were issued by the government to respondent on 29 December 1982. The RTC
of Manila, in a Decision dated 28 April 1983, ruled in favor of petitioner ordering the
debtors, including respondent, to pay jointly and severally certain amounts of
money. The public auction conducted by the sheriff on the lots owned by
respondent occurred on 12 October 1984.
For a period of five years or from 29 December 1982 up to 28 December 1987,
Section 118 of CA 141 provides that the lots comprising the free patents shall not
be made liable for the payment of any debt until the period of five years expires. In
this case, the execution sale of the lots occurred less than two years after the date
of the issuance of the patents. This clearly falls within the five-year prohibition
period provided in the law, regardless of the dates when the loans were incurred.
In Artates v. Urbi,[15] we held that a civil obligation cannot be enforced against, or
satisfied out of, the sale of the homestead lot acquired by the patentee less than
five years before the obligation accrued even if the sale is involuntary. For purposes
of complying with the law, it is immaterial that the satisfaction of the debt by the
encumbrance or alienation of the land grant was made voluntarily, as in the case of
an ordinary sale, or involuntarily, such as that effected through levy on the property
and consequent sale at public auction. In both instances, the law would have been
violated.
Likewise, in Beach v. Pacific Commercial Company and Sheriff of Nueva
Ecija,[16] we held that to subject the land to the satisfaction of debts would violate
Section 116 of Act No. 2874 (now Section 118 of CA 141).
As correctly observed by the CA in the present case:
It is argued by defendant-appellee, however, that the debt referred to
in the law must have been contracted within the five-year
prohibitory period; any debt contracted before or after the
five-year prohibitory period is definitely not covered by the
law. This argument is weakest on two points. Firstly,
because the provision of law does not say that the debt
referred to therein should be contracted before the five-
year prohibitory period but before the expiration of the five-
year prohibitory period. (Defendant-appellee deliberately
omitted the word expiration to suit its defense.) This simply
means that it is not material whether the debt is contracted
before the five-year prohibitory period; what is material is
that the debt must be contracted before or prior to
the expiration of the five-year prohibitory period from the
date of the issuance and approval of the patent or grant. x
xx
And secondly, while it is true that the debt in this case was contracted
prior to the five-year prohibitory period, the same is of no
consequence, for as held in Artates vs. Urbi, supra, such
indebtedness has to be reckoned from the date said
obligation was adjudicated and decreed by the court. x x
x[17]
It must be emphasized that the main purpose in the grant of a free patent or
homestead is to preserve and keep in the family of the homesteader that portion of
public land which the State has given to him so he may have a place to live with his
family and become a happy citizen and a useful member of the society.[18] In Jocson
v. Soriano,[19] we held that the conservation of a family home is the purpose of
homestead laws. The policy of the state is to foster families as the foundation of
society, and thus promote general welfare. The sentiment of patriotism and
independence, the spirit of free citizenship, the feeling of interest in public affairs,
are cultivated and fostered more readily when the citizen lives permanently in his
own home, with a sense of its protection and durability.
Section 118 of CA 141, therefore, is predicated on public policy. Its violation gives
rise to the cancellation of the grant and the reversion of the land and its
improvements to the government at the instance of the latter.[20] The provision that
nor shall they become liable to the satisfaction of any debt contracted prior to the
expiration of the five-year period is mandatory[21] and any sale made in violation of
such provision is void[22] and produces no effect whatsoever, just like what
transpired in this case. Clearly, it is not within the competence of any citizen to
barter away what public policy by law seeks to preserve.[23]
WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 21 August
2003 and Resolution dated 13 February 2004 of the Court of Appeals in CA-G.R.
CV No. 43926.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-56483 May 29, 1984
SOSTENES CAMPILLO, petitioner,
vs. HON. COURT OF APPEALS and ZENAIDA DIAZ VDA. DE SANTOS,
in her capacity as Administratrix of the Intestate Estate of the late
SIMPLICIO S. SANTOS, respondents.
Rosendo J. Tansinsin for petitioner.
Buenaventura Evangelista for private respondent.
DE CASTRO, J.:
In this petition for review on certiorari of the decision of the defunct Court
of Appeals in CA-G.R. No. 62842-R issued on March 9, 1981, the only
issue is whether who has a better right or title to the herein disputed two
(2) parcels of land — Simplicio Santos who earlier purchased them in a
private sale but failed to register his sale, or petitioner Sostenes Campillo
who subsequently purchased them at an execution sale and obtained a
certificate of title.
The pertinent undisputed facts, may be summarized as follows: On
February 27, 1961, Tomas de Vera and his wife Felisa Serafico sold two
(2) parcels of land located in Tondo, Manila, designated as Lots 1 and 2 of
the consolidation and subdivision plan (LRC) Pcs. 888 and segregated
from Transfer Certificate of Title No. 37277 under Transfer Certificate of
Title No. 63559, to Simplicio Santos, now deceased and is represented by
his administratrix, Zenaida Diaz Vda. de Santos, the herein private
respondent. Said sale was however never presented for registration in the
office of the Registry of Deeds of Manila nor noted in the title covering the
property.
On January 27, 1962, petitioner Sostenes Campillo obtained a judgment
for a sum of money against Tomas de Vera in Civil Case No. 49060 of the
Court of First Instance of Manila. That judgment became final and
executory, and petitioner obtained an order for the issuance of a writ of
execution. The writ was issued on April 4, 1962 and pursuant thereto, the
City Sheriff levied on three (3) parcels of land covered by TCT No. 63559
in the name of Tomas de Vera, including the two (2) parcels of land which
the latter previously sold to Simplicio Santos.
On June 26, 1962, notice of the sale of said lots was issued by the Sheriff
and published in the "Daily Record" and La Nueva Era."
On July 25, 1962, the three parcels of land were sold at public auction for
P17,550.81 in favor of petitioner who was issued the corresponding
certificate of sale. After the lapse of one year, the City Sheriff executed the
final deed of sale in favor of petitioner over the three (3) parcels of land
levied and sold on execution. On February 4, 1964, TCT No. 63559 was
cancelled and in lieu thereof, TCT No. 73969 was issued by the Registry
of Deeds of Manila in the name of petitioner Sostenes Campillo. Upon
petition by the latter, the Registry of Deeds cancelled TCT No. 73969 and
issued in hell thereof TCT Nos. 74019 and 74020 over the disputed Lots 1
and 2, respectively.
Claiming to be the owner of the two parcels of land by reason of the
previous sale to him by Tomas de Vera, Simplicio Santos filed an action to
annul the levy, notice of sale, sale at public auction and final deed of sale
of Lots 1 and 2 in favor of petitioner Campillo, with damages. In resisting
the complaint, the herein petitioner as one of the defendants below,
alleged that he is an innocent purchaser for value and that the supposed
previous sale could not be preferred over the levy and sale at public action
because it was not registered.
After due trial, the lower court rendered judgment sustaining the validity of
the levy and sale at public auction primarily because at the time of the levy
and sale, the disputed properties were still registered in the name of the
judgment debtor, Tomas de Vera. Besides, the trial court ruled, the sale to
Simplicio Santos which was not registered nor noted in the title of the
subject lots, cannot bind third persons.
On appeal at the instance of the herein private respondent, the
respondent appellate court modified the decision of the lower court, as
follows:
WHEREFORE, the judgment of the trial court is
hereby modified as follows:
(1) The dismissal of the amended complaint as
against defendant Sostenes Campillo only and
ordering the plaintiff to pay the costs of suit are set
aside;
(2) Declaring the levy, sheriff's sale and sheriff's
certificate in favor of defendant Sostenes Campillo
null and void and of no effect;
(3) Declaring plaintiff Simplicio Santos, now his
estate, to be the owner of the two parcels of land
under litigation and embraced in Transfer Certificate
of Title No. 63559; and
(4) Ordering the Register of Deeds of Manila to
cancel Transfer Certificate of Title Nos. 74019 and
74020 in the name of defendant Sostenes Campillo
and to issue the proper certificate of title in the name
of the estate of Simplicio Santos.
The rest of the judgment appealed from is hereby
affirmed. (p. 45, Rollo)
Rationalizing its stand, the appellate court said that the subject lots could
not be legally levied upon to satisfy the judgment debt of the de Veras in
favor of petitioner because at the time of the execution sale, the judgment
debtor, having previously sold said properties, was no longer the owner
thereof; that since the judgment debtor had no more right to or interest on
the said properties, then the purchaser at the auction sale acquires
nothing considering that a judgment creditor only acquires the Identical
interest possessed by the judgment debtor in the property which is the
subject of the auction sale, and he takes the property subject to all existing
equities to which the property would have been subject in the hands of the
debtor; and, while it may be true that Simplicio Santos did not record or
register the sale of the disputed lots, the levy on execution does not take
precedence over the unrecorded deed of sale to the same property made
by the judgment debtor anterior to the said levy since the judgment
creditor is not a third party within the meaning of the law and could not
therefore be considered as purchaser for value in good faith.
After a conscientious review and scrutiny of the records of this case as
well as existing legislations and jurisprudence on the matter, We are
constrained to reverse the judgment of the respondent appellate court and
rule in favor of the herein petitioner.
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. 1Consequently, and considering that the properties subject
matter hereof were actually attached and levied upon at a time when said
properties stood in the official records of the Registry of Deeds as still
owned by and registered in the name of the judgment debtor, Tomas de
Vera, the attachment, levy and subsequent sale of said properties are
proper and legal. The net result is that the execution sale made in favor of applies that a person dealing with registered land is not required to go
the herein petitioner transferred to him all the rights, interest and behind the register to determine the condition of the property and he is
participation of the judgment debtor in the aforestated properties as merely charged with notice of the burdens on the property which are noted
actually appearing in the certificate of title, unaffected by any transfer or on the face of the register or the certificate of title. Hence, the petitioner
encumbrance not so recorded therein. herein, as the purchaser in the execution sale of the registered land in
suit, acquires such right and interest as appears in the certificate of title
Section 51, PD No. 1529, otherwise known as the Property Registration unaffected by prior lien or encumbrances not noted therein. This must be
Decree, provides as follows: so in order to preserve the efficacy and conclusiveness of the certificate of
title which is sanctified under our Torrens system of land registration.
Section 51. Conveyance and other dealings by
registered owner. — An owner of registered land WHEREFORE, the questioned decision of the respondent appellate court
may convey, mortgage, lease, charge or otherwise is hereby reversed and set aside, and the judgment of the lower court is
deal with the same in accordance with existing laws. reinstated. Without pronouncement as to costs.
He may use such forms of deeds, mortgages,
leases or other voluntary instruments as are SO ORDERED.
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. (Italics for emphasis)

As succinctly stated in the case of Philippine National Bank vs. Court of

Appeals, 98 SCRA 207:

Whatever might have been generally or

unqualifiedly stated in the cases heretofore decided
by this Court, We hold that under the Torrens
System registration is the operative act that gives
validity to the transfer or creates a hen 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 the certificate of
title. To require him to do more is to defeat one of
the primary objects of the Torrens system. A bona
fide purchaser for value of such property at an
auction sale acquires good title as against a prior
transferee of same property if such transfer was
unrecorded at the time of the auction sale. (Italics
for emphasis)

The case of Leyson vs. Tanada, 2 invoked by the private respondent is not
in point. In that case, a notice of lis pendens was inscribed at the back of
the certificate of title of the land subject therein before it was sold at public
auction. Necessarily, the purchaser at public auction is bound by the
outcome of the pending case referred to therein. Since it turned out that
the judgment debtor is merely a co-owner of the property sold at public
auction, then the puchaser thereat is not entitled to the entirety of the land.
As the Court held: "The interest acquired by a purchaser in an execution
sale is limited to that which is possessed by the debtor. If there is more
than one person owning property in common and an execution against
one only is levied thereon, the sale effected by the Sheriff under such
execution operates exclusively upon the interest of the execution debtor,
without being in any wise prejudicial to the interest of the other owners.
The result in such case merely is that one new owner in common is
substituted for the owner whose interest is alienated by process of law."

While it may be true as stated in the aforesaid case of Leyson vs. Tanada,
that purchasers at execution sales should bear in mind that the rule
of caveat emptor applies to such sales, that the sheriff does not warrant
the title to real property sold by him as sheriff, and that it is not incumbent
on him to place the purchaser in possession of such property, still the rule
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-69303, July 23, 1987
HEIRS OF MARIA MARASIGAN, namely, Teofilo, Isabel, Maximina,
Anicia, and Francisco, all surnamed Marasigan, petitioners,
vs. THE INTERMEDIATE APPELLATE COURT and MARIA
MARRON, respondents.
GUTIERREZ, JR., J.:
Who has a better right to the property in question, the party who bought it
with a notice of lis pendens annotated at the back of her title or the party in
whose favor the notice of lis pendens was made? The appellate court
answered this question in favor of the party who had the notice annotated
and who won the litigation over the property. We affirm.
The disputed property in this case is a residential lot (Lot No. 2-A) covered
by Transfer Certificate of Title No. 100612 issued by the Register of
Deeds of the City of Manila in the name of one Fe Springael-Bazar,
married to Felicisimo Bazar.
The pertinent facts as disclosed by the record are as follows:
On April 24, 1975, Civil Case No. 97479 entitled "Maria Marron v.
Felicisimo Bazar and Fe S. Bazaar" was filed before the then Court of First
Instance of Manila, Branch XIII. The action sought to compel defendants
Bazar to execute a registrable Deed of Absolute Sale of their lot covered
by T.C.T. No. 100612 in favor of Maria Marron.
On January 27, 1976, while Civil Case No. 97479 was still pending, the
private respondent caused the annotation of a notice of lis pendens at the
back of T.C.T. No. 100612.
On February 24, 1976, judgment was rendered in Civil Case No. 97479.
The dispositive portion reads:
WHEREFORE, the Court hereby renders judgment in favor of the plaintiff
and against the defendants as follows:
a) Ordering the defendants Fe Springael Bazar and Felicisimo
Bazar as vendors (1) to execute in favor of the plaintiff Maria
Marron as vendee a Deed of Absolute Sale in a public
instrument over the residential lot covered by Transfer
Certificate of Title No. 100612 issued by the Registry of Deeds
of the City of Manila to and in the name of Fe S. Bazar, married
to Felicisimo Bazaar; and (2) to deliver to plaintiff sufficient
copies of such deed of sale, together with the Owner's copy of
said Transfer Certificate of Title No. 100612, in order that the
plaintiff can register the Deed of Absolute Sale with the
Registry of Deeds of the City of Manila and secure a transfer
certificate of title for the land in her name.
b) Ordering the defendants to pay to the plaintiff the sum of
P500.00 Philippine Currency, as and for attorney's fees; and
c) Ordering the defendants to pay the costs of the suit. (Rollo,
p. 15).
The above judgment became final and executory so Maria Marron filed a
motion for execution which was granted. A writ of execution was issued by
the court on July 12, 1976. The spouses Bazar, however, refused to
surrender their title to the property in question and to execute the required
deed of sale in Marron's favor. On November 29, 1978, the lower court
finally ordered the Clerk of Court to execute the deed of sale in behalf of
the erring spouses. When the said deed was presented to the Register of
Deeds of Manila for registration, the Deputy Clerk of Court was advised to
secure a court order in order that the new title issued in the name of
herein petitioner Maria Marasigan could be cancelled.
It appears that on December 18, 1974, a deed of absolute sale of Lot 2-A
covered by T.C.T. No. 100612 was executed by Fe S. Bazar in favor of
Maria Marasigan for and in consideration of the sum of Fifteen Thousand
Pesos (P15,000.00). However, it was only on July 5, 1977 that said deed
was registered with the Registry of Deeds of Manila. Consequently, T.C.T.
No. 100612 was cancelled and a new title was issued in Maria
Marasigan's name. When the Register of Deeds of Manila issued Transfer
Certificate of Title No. 126056 naming Maria Marasigan as the new owner
of Lot 2-A, the notice of lis pendens caused to be annotated by Marron on
the Bazar's title was carried over on the said new title.
Meanwhile, on May 26, 1977, the Bazaars filed a petition for relief from the
judgment dated February 24, 1976 in Civil Case No. 97479. While their
petition was still pending, they moved to set aside the said judgment on
June 22, 1979 on the ground of lack of jurisdiction over their persons.
On the other hand, on February 24, 1979, Marron instituted L.R.C. Case
No. 7680 captioned "Maria Marron v. Maria Marasigan" which prayed for a
court order requiring the Register of Deeds of Manila to register the deed
of sale executed by the Deputy Clerk of Court in behalf of the Bazaars
pursuant to the order dated November 29, 1978 of the Court of First
Instance, Manila, Branch XIII. L.R.C. Case No. 7680 was tried by the
Court of First Instance of Manila, Branch IV acting as a land registration
court. Said case was dismissed for the following reason:
... This court acting as a Land Registration Court, with limited
and special jurisdiction cannot act on this petition under
summary proceedings but (sic) should be ventilated before a
court of general jurisdiction Branch XIII, which issued the
aforesaid Order dated November 29, 1978, the said petition is
hereby dismissed for lack of jurisdiction without prejudice on
the part of the petitioner to institute the appropriate civil action
before the proper court. ... (Annex "A," p. 4, Rollo, p. 138)
On September 6, 1979, Marron filed another case docketed as Civil Case
No. 126378 to have Marasigan's TCT 126056 cancelled conformably to
the procedure outlined in the decision of the above land registration court.
On July 30, 1980, the parties submitted said case for decision.
On February 18, 1982, the Court of First Instance of Manila, Branch IV to
which Civil Case No. 126378 was assigned dismissed Marron's complaint
for being premature since the decision rendered by the CFI, Branch XIII in
Civil Case No. 97479 had not yet become final and executory considering
that it was still the subject of a petition for relief from judgment.
On appeal, the Intermediate Appellate Court, on August 7, 1984, ruled that
Marron is entitled to the property under litigation by virtue of the notice
of lis pendens annotated at the back of Maria Marasigan's title. The
appellate court further ruled that the decision in Civil Case No. 97479 had
become final and executory because the petition for relief from judgment
of the spouses Bazar was filed out of time. The dispositive portion of the
appellate court's decision reads:
WHEREFORE, the appealed decision is hereby REVERSED and another
one entered —
(a) Ordering the Register of Deeds of Manila to cancel T.C.T.
No. 126056 in the name of Maria Marasigan and issue another
in the name of Maria Marron by virtue of the Deed of Sale
executed by the Branch Clerk of Court of Branch XIII;
(b) Ordering the said Register of Deeds, during the pendency
of this case, to refrain from registering any deed of sale
pertaining to T.C.T. No. 126056 in the name of Maria
Marasigan other than that of the herein plaintiff; and
 (c) Ordering the defendant Maria Marasigan to pay attorney's
fees in the amount of P10,000.00. (IAC, Decision. Rollo, pp.
17-18).
Maria Marasigan who died in the course of the proceedings is now
represented by her heirs in the instant petition which assigns the following
errors:
I Director of Lands, et al. v. Reyes, 68 SCRA 177).
THAT THE INTERMEDIATE APPELLATE COURT FAILED TO
APPREHEND THAT THE RIGHT OF ACTION OF RESPONDENT MARIA
MARRON (AS PLAINTIFF) IN CIVIL CASE NO. 97479 HAD
PRESCRIBED AND SHE INCURRED IN LACHES.
II
THAT THE INTERMEDIATE APPELLATE COURT FAILED TO
APPREHEND THAT RESPONDENT ABANDONED OR WAIVED HER
PROPERTY RIGHTS AND EFFECTS TO/OF THE DECISION IN CIVIL
CASE NO. 97479, WHEN SHE FILED CIVIL CASES NO. 7680 AND
126378, DURING ITS EFFECTIVITY.
III
THAT THE INTERMEDIATE APPELLATE COURT ERRED IN
CONCLUDING THAT THE DECISION IN CIVIL CASE NO. 97479 HAS
BECOME FINAL AND EXECUTORY.
IV
THAT THE INTERMEDIATE APPELLATE COURT FAILED TO
APPREHEND THE LACK OF JURISDICTION OF THE TRIAL COURT IN
CIVIL CASES NO. 7680 AND 126378 OVER THE PERSONS OF
PETITIONERS.
V Guia, 134 SCRA 34 1)
THAT THE INTERMEDIATE APPELLATE COURT ERRED IN
CONSIDERING THAT THE TRIAL COURT IN CIVIL CASE NO. 97479
HAS JURISDICTION OVER THE PERSONS OF DEFENDANTS
SPOUSES FELICISIMO BAZAAR AND FE S. BAZAAR.
VI
THAT THE INTERMEDIATE APPELLATE COURT FAILED TO
APPREHEND THAT THE DEED OF ABSOLUTE SALE EXECUTED BY
THE DEPUTY CLERK OF COURT, WAS NOT LEGAL AND VALID AND
WITHOUT PROOF AND EFFECT. (Brief for the appellant, pp. 1 and 2)
We find no merit in the present petition.
There is a clear showing that although the late Maria Marasigan acquired
the property in question from the Bazaars pursuant to a deed of absolute
sale on December 18, 1974 or a little over four months before the filing of
Civil Case No. 97479, the transaction became effective as against third
persons only on July 5, 1977 when it was registered with the Registry of
Deeds of Manila. It is the act of registration which creates constructive
notice to the whole world. Section 51 of Act 496, as amended by Section
52 of the Property Registration Decree (P.D. 1529) provides:
Sec. 52. Constructive notice upon registration. — Every
conveyance ... affecting registered land shall, if registered, filed
or entered in the office of the Register of Deeds for the
province or city where the land to which it relates lies, be
constructive notice to all persons from the time of such
registering, filing or entering.
Moreover, there is no question that when the late Maria Marasigan was
issued her transfer certificate of title to the subject property (T.C.T. No.
126056), the Registrar of Deeds of Manila then carried over to the new
title the notice of lis pendens which the private respondent had caused to
be annotated at the back of the Bazar's title. In case of subsequent sales
or transfers, the Registrar of Deeds is duty bound to carry over the notice
of lis pendens on all titles to be issued. Otherwise, if he cancels any notice
of lis pendens in violation of his duty, he may be held civilly and even
criminally liable for any prejudice caused to innocent third persons (The
A notice of lis pendens means that a certain property is involved in a
litigation and serves as notice to the whole world that one who buys the
same does it at his own risk (Rehabilitation Finance Corporation v.
Morales, 101 Phil. 171). It was also a clear notice to Maria Marasigan that
there was a court case affecting her rights to the property she had
purchased.1avvphi1
As earlier stated it was only on July 5, 1977 that the sale between Maria
Marasigan and the Bazaars became effective as against third persons.
The registration of the deed of sale over the subject property was
definitely subsequent to the annotation made on January 27, 1976.
Consequently, Marasigan was bound by the outcome of the litigation
against her vendors or transferors. (See Rivera v. Tirona, et al., 109 Phil.
505).
We reiterate the established rule that:
... the filing of a notice of lis pendens charges all strangers with
a notice of the particular litigation referred to therein and,
therefore, any right they may thereafter acquire on the property
is subject to the eventuality of the suit. The doctrine of lis
pendens is founded upon reason of public policy and necessity,
the purpose of which is to keep the subject matter of the
litigation within the power of the Court until the judgment or
decree shall have been entered; otherwise, by successive
alienations pending the litigation, its judgment or decree shall
be rendered abortive and impossible of execution. ... (Laroza v.
The late Marasigan's transferors did not interpose any appeal from the
adverse judgment dated February 24, 1976 in Civil Case No. 97479. The
30-day period under the old rule (Rule 41, section 3 of the Revised Rules
of court now amended by Batas Pambansa Bilang 129, section 39) within
which the Bazaars may have taken an appeal started to run from May 12,
1976 when they were served with a copy of the said decision. On June 11,
1976, the February 24, 1976 decision in Civil Case No. 97479 became
final and executory. At this point after the finality of the said decision, the
Bazaars no longer had the right to alienate the property subject of the
litigation. Any transaction effective during the period of litigation is subject
to the risks implicit in the notice of lis pendens and to the eventual
outcome of the litigation.
Moreover, we agree with the finding of the appellate court that the petition
for relief from judgment by the Bazaars dated May 26, 1977 was filed
beyond the two periods provided in Section 3 Rule 38 of the Revised
Rules of Court. There may have been some errors in the computations but
the petition itself was out of time.
Rule 38, Section 3 of said Rules provides, in part, that:
Sec. 3. Time for filing petition. ... — A petition provided for in
either of the preceding sections of this rule must be verified,
filed within sixty (60) days after the petitioner learns of the
judgment, order or other proceeding to be set aside, and not
more than six (6) months after such judgment or order was
entered or such proceeding was taken. ...
The 60-day period must be reckoned from May 12, 1976 when the
Bazaars were served with a copy of the assailed decision. Therefore, the
60-day period expired on July 11, 1976. It was only after 379 days or more
than 12 months after they learned of the judgment that the Bazaars filed
their petition for relief from said judgment. (See Domingo v. Dela Cruz, 23
SCRA 1121) The appellate court computed the 6-month period from the
date of the judgment was rendered. Rule 38 states that the counting
should commence from the entry of the judgment or order. (See Dirige v.
Biranya, 17 SCRA 840). A judgment is entered only after its finality and
Civil Case No. 97479 became final on June 11, 1976. Since the records
do not bear the exact date the questioned judgment was entered, the 6-
month period can be counted for purposes of our decision from July 12,
1976 when the writ of execution of the final judgment was issued. The
phrase "or other proceeding" in Section 3 of Rule 38 includes a writ of
execution (Aquino v. Blanco, 79 Phil. 647). The 6-month period from July
12, 1976 lapsed on January 8, 1977. A period of ten (10) months had
already lapsed when the Bazaars filed their petition for relief from
judgment on May 26, 1977. Obviously, the petitioners cannot now
question the effects of the final and executory judgment in Civil Case No.
97479. In the words of Laroza v. Guia (supra) they cannot render the final
judgment abortive and impossible of execution. The deed of sale executed
by the Deputy Clerk of Court on behalf of the Bazar spouses pursuant to
the court's judgment was valid and binding.

The petitioners cannot also raise before us the issues of prescription or

laches and lack of jurisdiction over the persons of the Bazar spouses in
Civil Case No. 97479. This cannot be done in this petition which stems
from Civil Case No. 126378 in the trial court and AC-G.R. No. 00183 in the
appellate court. The Bazaars were the proper parties who ought to have
raised them as defenses either in a motion to dismiss or in their answer.
Since they did not do so, the same were deemed waived. (See Rule 9,
section 2 of the Revised Rules of Court; MD Transit & Taxi Co., Inc. v.
Estrella, 113 SCRA 378; Torreda v. Boncaros, 69 SCRA 247; Visayan
Electric Co., Inc. v. Commissioner of Internal Revenue, 39 SCRA 43;
Republic v. Mambulao Lumber Company, 6 SCRA 858).

WHEREFORE, in view of all the foregoing, the petition is hereby

DISMISSED for lack of merit. The appellate court's decision is
AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. L-48971 & 49011 January 22, 1980
PACIFICO GARCIA, petitioner-appellant,
vs. BENJAMIN M. GOZON, TECLA GUTIERREZ, ROSARIO FELIX,
PAULINO D. BUENAVENTURA, RAYMUNDO DIONISIO, VIRGILIO
AUSTRIA and MARCEON VICENCIO, respondents-appellees;
PHILIPPINE NATIONAL BANK, petitioner-appellant,
vs. COURT OF APPEALS (Third Division), CAROLINA LAPUZ- GOZON,
assisted by her husband BENJAMIN M. GOZON, TECLA GUTIERREZ,
ROSARIO FELIX, PAULINO D. BUENAVENTURA, RAYMUNDO DIONISIO,
VIRGILIO AUSTRIA and MARCEON VICENCIO, respondents-appellees.
Agapito Mendoza & Antonio G. Ibarra for appellant Pacifico Garcia
Laurel Law Office and Flores Ocampo, Dizon & Domingo for private appellees.
AQUINO, J.:
This case is about the issuance of two or more transfer certificates of title to
different persons for the same lots, or subdivisions thereof, due to the fact that
the original title was allegedly not cancelled when the first transfer certificates
of title were issued to replace the original title. The factual background is as
follows:
1. On August 9, 1918, a deed of sale for two parcels of land, E and G (with a
total area of more than seven hectares) of the Hacienda Maysilo, located in
Malabon, Rizal and covered by Original Certificate of Title No. 983, was
executed in favor of Ismael Lapus a bona fide occupant thereof. The deed was
executed pursuant to an order of the Court of First Instance of Rizal in Civil
Case No. 391, Negao vs. Vidal, a partition proceeding involving the said
hacienda (See Bustamante vs. Tuason, 47 Phil. 433, 434).
2. The deed of sale was presented for registration at two-twenty five in the
afternoon of January 15, 1920 and was recorded as Primary Entry No. 7710.
That deed of sale itself contains the following entries showing that it was
annotated on the back of OCT NO. 983:
Presentado en este Registro a las 2:25 de la tarde del
dia de hoy segun el Asiento No. 7710 de tomo 10 del
Libro Diario, Pasig, Rizal, Enero 15, 1920.
Register of Deeds (Exh. B-12)
Inscrito el documento que precede al dorso del
certificado de Titulo Original No. 983 del Tomo A-9, de
inscritor en las paginas 113 y 114 ambos del libro T-25
de registro como certificados de titulo Nos. 4910 y
4911, archivado en el legajo T-#4910. Pasig, Rizal,
Enero 15, 1920.:
Register of Deeds (Exh. B-1).
However, it seemed that, contrary to the foregoing entry and the official routine
or standard operating procedure, the deed of sale was not annotated on OCT
No. 983 and that, consequently, that title was apparently not cancelled. Why
that annotation did not appear in OCT No. 983 and why there was no notation
of the cancellation of that title, as it appeared in 1962, is a mystifying
circumstance in this case.
3. As a result of the registration of that deed of sale, Transfer Certificate of
'Title No. 4910 was issued to Lapus for the two parcels of land, E and G, and I
Transfer Certificate of Title No. 4911 was issued for the remaining five lots
covered by OCT No. 983 (which embrace an area of more than two hundred
fifty-eight hectares registered in the names of more than twenty-six-co-
owners). TCT Nos. 4910 and 4911 contain the following entries: "Transfer from
No. 983. Originally registered on the 29th day of January, in the year 1917 in
Book No. A-9, page 215, of the said Province of Rizal, pursuant to a decree
entered in Case No. 3850."
4. Lapus on different occasions mortgaged the two parcels of land to secure
his obligations to the Philippine National Bank, the Government and the
Philippine Trust Company. He died in 1951. The two parcels of land were
inherited by his daughter, Carolina Lapuz-Gozon. She became the registered
owner of the two lots. She subdivided them into fifty-five lots. She sold some of
the subdivision lots to her co-respondents-appellees herein. Lapus and his
successors-in-interest have been in possession of the two parcels even before
1910 or for more than seventy years.
5. Meanwhile, in 1962, certain. alleged heirs (collectively known as the
Riveras) of the late Maria de la Concepcion Vidal filed a motion in Land
Registration Cases Nos. 4429 and 4496 of the Court of First Instance of Rizal,
alleging that they were deprived of their participation in the Hacienda Maysilo
covered by OCT No. 983 and for other titles and that, since only OCT No. 983
was supposedly unencumbered, all the land covered by that title should be
adjudicated to them. The court granted the motion. It should be stressed that
OCT No. 983 appears to have remained uncancelled notwithstanding the sale
to Lapus of two parcels covered by it and the fact that it had been replaced by
TCT Nos. 4910 and 4911.
6. On June 7, 1963, OCT No. 983 was definitely cancelled and in lieu thereof
Transfer Certificate of Title No. 112236 was issued to the Riveras. Later, Lots
5 and 7 of the said title (corresponding to parcels E and G which were sold to
Ismael Lapus in 1918 as stated earlier) were assigned by Bartolome Rivera to
Sergio Cruz and Pacifico Garcia and TCT Nos. 112743 and 112742 were
issued to Cruz and Garcia, respectively. Thus, two sets of transfer certificates
of title for Lots E and G or 5 and 7, originally covered by OCT No. 983, were
issued, one to the heir of Ismael Lapus and another set to the successors-in-
interest of the Riveras.
7. On October 22, 1964, Garcia subdivided Lot 7 (G) into Lots A and B. Garcia
retained Lot A and obtained TCT No. 134958 for it. He assigned Lot B to
Antonio Muñoz on November 5, 1964. As a consequence of the assignment,
TCT No. 112742 was cancelled and TCT No. 134957 was issued to Muñoz. In
1965, he mortgaged Lot B to the Associated Banking Corporation to secure a
loan of P200,000.
8. On the other hand, on July 17, 1964 Cruz sold to Santiago Go Lot 5 (E)
covered by TCT No. 112743. TCT No. 131329 was issued to Go on August
25,1964. On December 23, 1964, Go mortgaged Lot 6 to the Philippine
National Bank (PNB) to secure a loan of P50,000 which was later increased to
P60,000.
9. Muñoz and Go did not pay their mortgage debts. The two banks foreclosed
the mortgages. The PNB bought the mortgaged lot at the auction sale held on
May 4. 1967. The sheriff issued to it a certificate of sale dated May 19, 1967
but at that time there was already a notice of lis pendens annotated on the title
of the mortgaged lot. TCT Nos. 212163 and 236881 for the mortgaged lots
were issued to the Associated Banking Corporation and the Philippine National
Bank, respectively.
10. The Riveras and their successors-in-interest have never set foot on the
disputed lots.
11. Mrs. Gozon later learned that the Riveras and their successors-in-interest
had acquired the land (more than two hundred fifty-eight hectares) covered by
OCT No. 983. Her lawyer and a surveyor informed her that parcels E and G,
which she inherited from her father, were identical to Lots 5 and 7 which were
conveyed to Cruz and Garcia. She registered adverse claims on the titles
covering Lots 5 and 7. On December 27, 1965 she and the persons to whom
she had transferred portions of parcels E and G filed with the Court of First
Instance of Rizal at Caloocan City against the Riveras, Cruz, Muñoz, Garcia,
Associated Banking Corporation, PNB and others an action to quiet title and
for damages.
12. A notice of lis pendens was annotated on January 25, 1966 on the titles of
Garcia, Muñoz and Go. The notice of lis pendens was annotated on the title of
the PNB when the sale in its favor was registered on December 13, 1969.
13. The trial court in its decision of July 30, 1975 declared valid TCT Nos.
141802 to 141855 and 143512 issued to Mrs. Gozon and her co-plaintiffs. It
voided TCT No. 112235 issued to the Riveras and all titles and transactions
emanating therefrom insofar as those titles covered the lots embraced in
plaintiffs' titles. The Riveras were ordered to pay the plaintiffs twenty thousand
pesos as attorney's fees.
14. The trial court also ordered Muñoz to pay the Associated Banking
Corporation, in the event that the bank would be evicted from the lot covered
by TCT No. 212153, two hundred sixty-five thousand seventy-two pesos and
fifteen centavos with twelve percent interest per annum from the date of the
eviction plus ten thousand pesos as attorney's fees.
15. Santiago Go was ordered to pay the PNB, should it be evicted from the lot
covered by TCT No. 236881, the sum of sixty thousand pesos plus nine
percent interest per annum from the date of the eviction and six thousand
pesos as attorney's fees.
16. That judgment of the trial court was affirmed by the Court of Appeals in its
decision of May 25, 1978. Garcia and the PNB appealed from that decision.
The Associated Banking Corporation, now the Associated Citizens Bank, tried
to appeal but it was not able to file its petition for review (L-49010).
Garcia contends that the Court of Appeals erred in not holding that his title is
valid and that the titles of Ismael Lapus and his successors-in-interest lost their
right to the disputed lots due to their negligence or inaction.
The issue is whether the 1920 title issued to Lapus and the titles derived
therefrom should prevail over the 1963 title issued to the Riveras and the
subsequent titles derived from it. Should Lapus' title prevail even if it was not
annotated by the register of deeds on the anterior or parent title which was not
cancelled before 1963? It was that noncancellation which led to the issuance
of the duplicative title to the Riveras and eventually to the execution of the
controversial mortgages and foreclosure sales to the two banks.
We hold that the two appeals have no merit. The title of Lapus and the titles
derived therefrom should be given effect. The title of the Riveras and the titles
springing from it are void.
There can be no doubt that Lapus was an innocent purchaser for value. He
validly transmitted to his successors-in-interest his indefeasible title or
ownership over the disputed lots or parcels of land. That title could not be
nullified or defeated by the issuance forty-three Years later to other persons of
another title over the same lots due to the failure of the register of deeds to
cancel the title preceding the title issued to Lapuz. This must be so considering
that Lapus and his interest remained in possession of the disputed successors
in lots and the rival claimants never possessed the same.
"The general rule is that in the case of two certificates of title, purporting to
include the same land, the earlier in date prevail, whether the land comprised
in the latter certificate be wholly, or only in part, comprised in the earlier
certificate" (Hogg, Australian Torrens System 823, citing cases and cited in
Legarda and Prieto vs. Saleeby, 31 Phil. 590, 595).
"Where two certificates (of title) purport to include the same land, the earlier in
date prevails. ... In successive registrations, where more than once certificate
is issued in respect of a party estate or interest in land, the Person claiming
under the prior certificate is entitled to the estate or interest; and that person is
deemed to hold under the prior certificate who is the holder of, or whose claim
is derived directly or indirectly from the person who was the holder of the
earliest certificate issued in respect thereof " (Niblack, Analysis of the Torrens
System page 237, cited in Legarda and Prieto vs. Saleeby, supra, pages 595-
6).
And the rule that in case of double registration the owner of the earlier
certificate is the owner of the land applies to the successive vendees of the
owners of such certificates. "The vendee of the earlier certificate would be the
owner as against the vendee of the owner of the later certificate" (Legarda and
Prieto vs. Saleeby, supra, pages 597-9).
It is settled that is this jurisdiction the maxim prior est in tempore, potior est in
jure (he who is first in time is preferred in right) is followed in land registration
matters (La Urbana vs. Bernardo, 62 Phil. 790, 806).
Appellant Garcia invokes the ruling that the mere entry of a document in the
day or entry book without noting it on the certificate of title is not a sufficient
registration (Bass vs. De la Rama, 73 Phil. 682, 685).
That ruling was superseded by the holding in the later six cases of Levin vs.
Bass, 91 Phil. 420, where a distinction was made
between voluntary and involuntary registration, such as the registration of an
attachment, levy upon execution, notice of his pendens, and the like. In cases
of involuntary registration, an entry thereof in the day book is a sufficient notice
to all persons even if the owner's duplicate certificate of title is not presented to
the register of deeds.
On the other hand, according to the said cases of Levin vs. Bass, in case
of voluntary registration of documents an innocent purchaser for value of
registered land becomes the registered owner, and, in contemplation of law
the holder of a certificate of title, the moment he presents and files a duly
notarized and valid deed of sale and the same is entered in the day book
and at the same time he surrenders or presents the owner's duplicate
certificate of title covering the land sold and pays the registration fees,
because what remains to be done lies not within his power to perform. The
register of deeds is duty bound to perform it. (See Potenciano vs. Dineros, 97
Phil. 196.)
The instant case is not Identical to the Bass cases. Here the deed of sale in
favor of Lapus, which was judicially authorized, was entered in the entry book
and a new title was issued to him. As already stated, and this point should be
underscored, the deed of sale in favor of Lapus contains the notation that it
was annotated on the back of OCT No. 983 (presumably, the original and
owner's duplicate thereof).
But why in 1962 it appeared that no such annotation was found on the back of
OCT No. 983, contrary to what was stated in the 1918 deed of sale, is a
mystery that the trill court and the plaintiffs failed to unravel during the trial.
Moreover, the title issued to Lapus contains the usual notation that it was a
transfer from a previous title which in this case was OCT No. 983.
It should be further observed that the deed of sale in favor of Lapus and the
titles issued to him and his successors interest together with his mortgage in
1929 of the disputed lots to the PNB itself, are all a matter of public record in
the registry of deeds.
As stressed in Legarda and Prieto vs. Saleeby, 31 Phil. 590, 600, "the record
is notice to all the world. All persons are charged with the knowledge of what it
contains. All persons dealing with the land so recorded, or any portion of it,
must be charged with notice of whatever it contains. The purchaser is charged
with notice of every fact shown by the record and is presumed to know every
fact which the record discloses.
"When a conveyance has been properly recorded, such record is constructive
notice of its contents and all interests, legal and equitable, included therein."
"Under the rule of notice, it is presumed that the purchaser has examined
every instrument of record affecting the title. Such presumption is irrefutable.
He is charged with notice of every fact shown by the record and is presumed
to know every fact which an examination of the record would have disclosed"
(Legarda and Prieto vs. Saleeby, supra, page 600).
As Justice Johnson says, "this presumption cannot be overcome by proof of
innocence or good faith. Otherwise, the very purpose and object of the law
requiring a record would be destroyed. Such presumption cannot be defeated
by proof of want of knowledge of what the record contains any more than one
may be permitted to show that he was ignorant of the provisions of the law.
The rule that all persons must take notice of the facts which the public record
contains is a rule of law. The rule must be absolute. Any variation would lead
to endless confusion and useless litigation" (Legarda and Prieto vs.
Saleeby, supra, pp. 600-601).
As to the PNB's claim that it was a mortgagee and purchaser in good faith and
for value, the Appellate Court held that the bank should have made an on-the-
spot investigation of the lot mortgaged by Go to ascertain whether he was in
possession of it or it was claimed by other persons. Its failure to do so
precludes the bank from being considered as a mortgagee in good faith and
for value (Gatioan vs. Gaffud, L-21953, March 28, 1969, 27 SCRA 706).
On the other hand, the trial court held that the PNB was not a buyer in good
faith when it bought Go's lot at the auction sale because there was already a
notice of his pendens annotated on his title.

In the Gatioan case, it appears that in 1935 Rufina Permison secured a

Torrens title for a parcel of land on the basis of a free patent. The land was
sold to Encarnacion Gatioan and Transfer Certificate of Title No. T-1212 was
issued to her. She mortgaged the land three times to the PNB

In 1956, the spouses Sixto Gaffud and Villamora Logan were able to secure a
Torrens title for the same lot also on the basis of a free patent. They
mortgaged the land also to the PNB. The Secretary of Agriculture and Natural
Resources, on discovering that two Torrens titles were issued for the same
land, recommended the cancellation of the later title issued to the Gaffud
spouses. As the PNB refused to cancel the mortgaged executed by Gatioan, in
spite of the fact that she had made full payment of the mortgage debt, she filed
against the Gaffud spouses and the PNB an action to quiet title.

It was held that Gatioan's title should prevail over that of the Gaffud spouses
and that the mortgage executed by them in favor of the PNB was void. The
Gaffud spouse were ordered to pay damages to Gatioan.

Since the applicable rule in the instant case is that the earlier certificate of title
should be recognized as superior and controlling there is no justification for
relying on the doctrine laid down by Justice Holmes in Eliason vs. Wilborn 281
U.S. 457, that "as between two innocent persons, one of whom must suffer the
consequence of a breach of trust, the one who made it possible by his act of
confidence must bear the loss."

There was no breach of trust in this case. What is note. worthy in this case is
that after it was recited in the registered deed of sale that sale was annotated
at the back of the title covering the lots sold, it turned out that the title did not
contain such an annotation and that the title was not cancelled. For that
anomaly, the purchaser, Ismael Lapus, the how" of the earlier title, was not
culpable or blameworthy.

WHEREFORE, the judgment of the Court of Appeals, affirming the decision of

the trial court, should stand. Costs against the appellants.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 97282, August 16, 1991
ATTY. PLARIDEL M. MINGOA, petitioner,
vs. LAND REGISTRATION ADMINISTRATOR, respondent.
Plaridel M. Mingoa for and in his own behalf.
GANCAYCO, J.:
The facts of this case are simple. A deed of donation of several parcels of
land was executed by petitioner in favor of his children on July 15, 1987.
The deed was forwarded to the Register of Deeds of Romblon for
registration by registered mail on September 9, 1988. It was entered in the
primary entry book of the Register of Deeds on September 20, 1988 under
Entry No. 181. Said Register of Deeds suspended registration of the
donation until the petitioner has secured the proper clearances from the
Department of Agrarian Reform on the ground that under Section 6 of
Republic Act 6657, any disposition of private agricultural lands made prior
to June 15, 1988, when the Act took effect, must be registered within three
(3) months from said date or on before September 13, 1988 to be valid.
The matter was elevated by petitioner en consulta with the Administrator
of the Land Registration Authority LTA. On November 27,1990 the LTA
Administrator issued a resolution sustaining the stand of the Register of
Deeds that unless the proper clearances from the Department of Agrarian
Reform are secured, the deed of donation may not be registered.
Hence this petition for certiorari whereby petitioner contends that Section
1, Rule 13 of the Rules of Court should apply in a suppletory manner in
that the date of the mailing should be considered the date of filing of the
document in the office of the Register of Deeds.
The petition is impressed with merit.
Section 6 of Republic Act No. 6657 provides, among others:
SEC. 6. Retention Limits.—Except as otherwise provided in its
Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall vary
according to factors governing a viable family-size farm, such
as commodity produced, terrain, infrastructure, and soil fertility
as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by
the landowner exceed five (5) hectares. Three (3) hectares
may be awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least fifteen (15) years
of age, and (2) that he is actually tilling the land or directly
managing the farm: Provided, That landowners whose lands
have been covered by Presidential Decree No. 27 shall be
allowed to keep the area originally retained by them
thereunder: Provided, further, That original homestead
grantees or their direct compulsory heirs who still own the
original homestead at the time of the approval of its Act shall
retain the same areas as long as they continue to cultivate said
homestead.
The right to choose the area to be retained, which shall be
compact or contiguous, shall pertain to the landowner;
Provided, however, That in case the area selected for retention
by the landowner is tenanted, the tenant shall have the option
to choose whether to remain therein or be a beneficiary in the
same or another agricultural land with similar or comparable
features. In case the tenant chooses to remain in the retained
area, he shall be considered a leaseholder and shall lose his
right to be a beneficiary under this Act. In case the tenant
chooses to be a beneficiary in another agricultural land, he
loses his right as a leaseholder to the land retained by the
landowner. The tenant must exercise this option with a period
of one (1) year from the time the landowner manifests his
choice of the area for retention.
In all cases the security of tenure of the farmers or farm
workers on the land prior to the approval of this Act shall be
respected.
Upon the effectivity of this Act, any sale, disposition, lease,
management contract or transfer of possession of private lands
executed by the original landowner in violation of this Act shall
be null and void; Provided, however, That those executed prior
to this Act shall be valid only when registered with the Register
of Deeds within a period of three (3) months after the effectivity
of this Act. Thereafter, all Registers of Deeds shall inform the
Department of Agrarian Reform (DAR) within thirty (30) days of
any transaction involving agricultural lands in excess of five (5)
hectares. (Emphasis supplied)
The said law was approved by the President of the Philippines on June
10, 1988. Section 78 thereof provides that it "shall take effect immediately
after publication in at least two (2) national newspapers of general
circulation." It appears the law took effect on June 15, 1988.
Section 56 of Presidential Decree No. 1529 also provides:
SEC. 56. Primary Entry Book; fees; certified copies.—Each
Register of Deeds shall keep a primary entry book in which,
upon payment of the entry fee, he shall enter, in the order of
their reception, all instruments including copies of writs and
processes filed with him relating to registered land. He shall, as
a preliminary process in registration, note in such book the
date, hour and minute of reception of all instruments, in the
order in which they were received. They shall be regarded as
registered from the time so noted, and the memorandum of
each instrument, when made on the certificate of title to which it
refers, shall bear the same date: Provided, that the national
government as well as the provincial and city governments
shall be exempt from the payment of such fees in advance in
order to be entitled to entry and registration.
Every deed or other instrument, whether voluntary or
involuntary, so filed with the Register of Deeds shall be
numbered and indexed and endorsed with a reference to the
proper certificate of title. All records and papers relative to
registered land in the office of the Register of Deeds shall be
open to the public in the same manner as court records,
subject to such reasonable relations as the Register of Deeds,
No. 97282 under the direction of the Commissioner of Land
Registration, may prescribe.
All deeds and voluntary instruments shall be presented with
their respective copies and shall be attend and sealed by the
Register of Deeds, endorsed with the file number, and copies
may be delivered to the person presenting them.
Certified copies of all instruments filed and registered may also
be obtained from the Register of Deeds upon payment of the
prescribed fees.
The foregoing provision requires the Register of Deeds, upon payment of
the entry fees, to enter in the primary book of entry, in the order of
reception, all instruments including copies of writs and processes filed with
him relative to registered land; the date, hour and minute shall be noted in
said book which shall be regarded as the date of registration of the
instrument; and the memorandum of each instrument on the certificate of
title shall bear the same date.

Section 34 of Presidential Decree No. 1529 likewise provides:

SEC. 34. Rules of procedure.—The Rules of Court shall,

insofar as not inconsistent with the provisions of this Decree,
be applicable to land registration and cadastral cases by
analogy or in a suppletory character and whenever practicable
and convenient.

Consequently, Section 1, Rule 13 of the Rules of Court is applicable to

this case in a suppletory character as it provides:

SEC. 1. Filing with the court, defined.—The filing of pleadings,

appearances, motions, notices, orders and other papers with
the court as required by these rules shall be made by filing
them personally with the clerk of the court or by sending them
by registered mail. In the first case, the clerk shall endorse on
the pleading the date and hour of filing. In the second case, the
date of the mailing of motions, pleadings, or any other papers
or payments or deposits as shown by the post office stamp on
the envelope or the registry receipt, shall be considered as the
date of their filing, payment, or deposit in court. The envelope
shall be attached to the record of the case.

The foregoing rule clearly provides that the date of mailing of the motion,
pleading, or any other papers, which may include instruments as the deed
of donation, is considered the date of filing as shown by the post office
stamp on the envelope or registry receipt.

The Court therefore finds and so holds that the date of mailing of an
instrument to the Register of Deeds for purposes of registration should be
considered the date of filing and receipt thereof by the Register of Deeds.
It is this date that should be entered in the primary entry book of the
Register of Deeds which shall be regarded as the date of its registration.

Since in this case, the deed of donation was admittedly sent by registered
mail to the Register of Deeds on September 9, 1988, said date is in effect
the date of filing, receipt and registration of the instrument, although the
instrument was actually received by said office only on September 20,
1988.

WHEREFORE, the petition is given due course and is hereby GRANTED.

The questioned resolution of the public respondent Administrator of the
Land Registration Authority dated November 27,1990 is hereby SET
ASIDE and it is hereby directed that the registration of deed of donation
subject of this petition be effected by the Register of Deeds of Romblon.

SO ORDERED.
 SECOND DIVISION
G.R. No. 142687 July 20, 2006
SPOUSES FRANCISCO and BERNARDINA RODRIGUEZ, petitioners,
vs.
HON. COURT OF APPEALS, SPOUSES CHRISTOPHER and MA. ANGELICA
BARRAMEDA, and SPOUSES ANTONIO and MARIDEL CALINGO, respondents.
DECISION
PUNO, J.:
This is a petition for review of the decision of the Court of Appeals dated September
7, 1999 in CA-G.R. CV No. 48772 and its resolution dated March 31, 2000. The
Court of Appeals reversed the decision of the Regional Trial Court of Makati in Civil
Case No. 92-3524.
The facts show that herein respondent Spouses Antonio and Maridel Calingo
(respondents Calingo) were the registered owners of a house and lot located at No.
7903 Redwood Street, Marcelo Green Village, Parañaque, Metro Manila. The
property was mortgaged to the Development Bank of the Philippines, which
mortgage was later absorbed by the Home Mutual Development Fund (HMDF) or
Pag-ibig.
On April 27, 1992, respondents Calingo and respondent Spouses Christopher and
Ma. Angelica Barrameda (respondents Barrameda) entered into a contract of sale
with assumption of mortgage where the former sold to the latter the property in
question and the latter assumed to pay the outstanding loan balance to the
Development Bank of the Philippines.1 Respondents Barrameda issued two checks
in the amounts of P150,000.00 and P528,539.76, for which respondents Calingo
issued a receipt dated April 24, 1992.2
In a letter dated April 23, 1992, respondent Antonio S. Calingo informed
HMDF/Pag-ibig about the sale of the property with assumption of mortgage. Said
letter, however, together with an affidavit by respondents Calingo, was served upon
HMDF/Pag-ibig on October 2, 1992.3
On May 29, 1992, respondents Barrameda filed with the Register of Deeds of
Parañaque an affidavit of adverse claim on the property. The adverse claim was
inscribed at the back of the certificate of title as Entry No. 3439.4
On June 1, 1992, respondent Ma. Angelica Paez-Barrameda wrote HMDF,
Mortgage and Loans Division informing the office that they have purchased the
subject property from the Calingo spouses and that they filed a notice of adverse
claim with the Register of Deeds of Parañaque. They also sought assistance from
said office as regards the procedure for the full settlement of the loan arrearages
and the transfer of the property in their names.5
Respondents Barrameda moved into the property on June 2, 1992.
On July 13, 1992, a notice of levy with attachment on real property by virtue of a
writ of execution was annotated at the back of the certificate of title of the property
in question. The writ of execution was issued by Judge Salvador Abad Santos,
Regional Trial Court of Makati, Branch 65 in connection with Civil Case No. 88-2159
involving a claim by herein petitioners, Spouses Francisco and Bernardina
Rodriguez, against respondents Calingo. Judge Abad Santos issued the writ in
favor of petitioners Rodriguez.6
On July 21, 1992, petitioners’ counsel, Atty. Nelson A. Loyola, sent a letter to
respondents Barrameda inquiring about the basis of their occupation of the property
in question.
On August 21, 1992, respondents Barrameda remitted to respondents Calingo the
amount of P364,992.07 to complete the payment of the agreed purchase price.
Respondents Calingo acknowledged receipt of said amount and waived all their
rights to the property in favor of the Barrameda spouses. They also guaranteed that
the property was clear and free from any liens and encumbrances, except the real
estate mortgage assumed by respondents Barrameda.7
On October 7, 1992, respondents Barrameda executed a joint affidavit stating that
they are the owners of the property in question by virtue of a deed of sale with
assumption of mortgage; that they registered an affidavit of adverse claim with the
Register of Deeds of Parañaque; that the Sheriff of the Regional Trial Court, Branch
65, Makati, Sheriff Manuel C. Dolor, levied said property despite their adverse
claim; and that they have acquired the property long before the levy was made, and
therefore, said levy was illegal. They served a copy of the affidavit on petitioners’
counsel, Atty. Loyola, who made a reply thereto on October 15, 1992.
In his letter to Christopher Barrameda dated October 15, 1992, Atty. Loyola pointed
out that the alleged deed of sale with assumption of mortgage was not registered
with the Register of Deeds and that the records of the HMDF show that the property
is owned by the Calingo spouses. He urged the Barrameda spouses to confer with
the petitioners to amicably settle the controversy.8
On November 9, 1992, respondents Barrameda found a Notice of Sheriff’s Sale
posted on their front gate, announcing the auction sale of their house and lot on
December 3, 1992 at 10:00 in the morning.9
On November 20, 1992, pursuant to Rule 39, Section 17 of the Revised Rules of
Court, respondents Barrameda served a Notice of Third Party Claim upon Sheriff
Manuel C. Dolor, accompanied by their affidavit of title.
On December 2, 1992, respondents Barrameda filed with the Regional Trial Court
of Makati a petition for quieting of title with prayer for preliminary injunction. The
petition prayed, among others, that the execution sale of the property be enjoined,
the notice of levy and attachment inscribed on the certificate of title be cancelled,
and that respondents Barrameda be declared the lawful and sole owners of the
property in question.10
The trial court ruled in favor of herein petitioners and dismissed respondents
Barrameda’s petition for quieting of title. It ruled that the annotation of respondents
Barrameda’s adverse claim at the back of the certificate of title was insufficient to
establish their claim over the property. It said that respondents Barrameda, as
buyers of the property, should have registered the title in their names. Furthermore,
respondents Barrameda’s adverse claim had lost its efficacy after the lapse of thirty
days in accordance with the provisions of the Land Registration Act. The trial court
also found that there was collusion between respondents Barrameda and
respondents Calingo to transfer the property to defraud third parties who may have
a claim against the Calingos.11
The Court of Appeals, however, reversed the decision of the trial court. Citing the
ruling in Sajonas v. Court of Appeals,12 the appellate court held that respondents
Barrameda’s adverse claim inscribed on the certificate of title was still effective at
the time the property was levied on execution. It said:
Therefore, the disputed inscription of adverse claim on TCT No.
83612/57286 was still in effect on July 13, 1992 when the Rodriguezes
caused the annotation of the notice of levy on execution thereto.
Consequently, they are 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 Barramedas. xxx
The court held, therefore, that the notice of levy could not prevail over respondents
Barrameda’s adverse claim.
Petitioners moved for a reconsideration of the appellate court’s ruling, but the
motion was denied.
Hence, this petition. Petitioners essentially argue that the remedy of a petition for
quieting of title was not available to respondents Barrameda as they did not have a
valid title to the property in question; that the affidavit of adverse claim inscribed by
respondents Barrameda at the back of the certificate of title was not sufficient to
establish their claim to the property; and there was collusion between respondents
Barrameda and respondents Calingo.
The principal issue that needs to be resolved in this case is whether respondents
Barrameda’s adverse claim on the property should prevail over the levy on
execution issued by another court in satisfaction of a judgment against respondents
Calingo.
We hold that it cannot.
Respondents Barrameda anchor their claim on the property on the deed of sale with
assumption of mortgage executed by them and respondents Calingo on April 27,
1992. The Property Registration Decree13 requires that such document be
registered with the Register of Deeds in order to be binding on third persons. The
law provides:
 Sec. 51. Conveyance and other dealings by registered owner. An the property in July of the same year. Any prudent buyer of real property, before
owner of registered land may convey, mortgage, lease, charge or parting with his money, is expected to first ensure that the title to the property he is
otherwise deal with the same in accordance with existing laws. He may about to purchase is clear and free from any liabilities and that the sellers have the
use such forms of deeds, mortgages, leases or other voluntary proper authority to deal on the property.
instruments as are sufficient in law. But no deed, mortgage, lease, or
other voluntary instrument, except a will purporting to convey or
Again, we stress that the annotation of an adverse claim is a measure designed to
affect registered land shall take effect as a conveyance or bind the
protect the interest of a person over a piece of property where the registration of
land, but shall operate only as a contract between the parties and
such interest or right is not otherwise provided for by the law on registration
as evidence of authority to the Register of Deeds to make
of real property. Section 70 of Presidential Decree No. 1529 is clear:
registration.

Sec. 70. Adverse claim. Whoever claims any part or interest in

The act of registration shall be the operative act to convey or affect the
registered land adverse to the registered owner, arising subsequent to
land insofar as third persons are concerned, and in all cases under this
the date of the original registration, may, if no other provision is
Decree, the registration shall be made in the office of the Register of
made in this Decree for registering the same, make a statement in
Deeds for the province or city where the land lies. (emphasis supplied)
writing setting forth his alleged right or interest, and how or under
whom acquired, a reference to the number of the certificate of title of
It is admitted in this case that the deed of sale with assumption of mortgage was not the registered owner, the name of the registered owner, and a
registered, but instead, respondents Barrameda filed an affidavit of adverse claim description of the land in which the right or interest is claimed. xxx
with the Register of Deeds. The question now is whether the adverse claim is
sufficient to bind third parties such as herein petitioners.
The deed of sale with assumption of mortgage executed by respondents Calingo
and Barrameda is a registrable instrument. In order to bind third parties, it must be
In L.P. Leviste and Company, Inc. v. Noblejas,14 we explained when an registered with the Office of the Register of Deeds. It was not shown in this case
inscription of an adverse claim is sufficient to affect third parties, thus: that there was justifiable reason why the deed could not be registered. Hence, the
remedy of adverse claim cannot substitute for registration.
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 IN VIEW WHEREOF, the petition is GRANTED. The assailed decision and
voluntary instrument as it is a wilful act of the registered owner. As resolution of the Court of Appeals are SET ASIDE and the decision of the Regional
such voluntary instrument, Section 50 of Act No. 496 [now Presidential Trial Court, Makati in Civil Case No. 92-3524 is REINSTATED. No cost.
Decree No. 1529] expressly provides that the act of registration shall
be the operative act to convey and affect the land. And Section 55 of
SO ORDERED.
the same Act requires the presentation of the owner’s duplicate
certificate of title for the registration of any deed or voluntary
instrument. As the agreement to sell involves an interest less than an
estate in fee simple, the same should have been registered by filing it
with the Register of Deeds who, in turn, makes a brief memorandum
thereof upon the original and owner’s duplicate certificate of title. 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. However, where the owner
refuses to surrender the duplicate certificate for the annotation of
the voluntary instrument, the grantee may file with the Register of
Deeds a statement setting forth his adverse claim, as provided for
in Section 110 of Act No. 496. In such a case, the annotation of the
instrument upon the entry book is sufficient to affect the real estate to
which it relates, although Section 72 of Act No. 496 imposes upon the
Register of Deeds the duty to require the production by the [r]egistered
owner of his duplicate certificate for the inscription of the adverse
claim. The 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 is not otherwise
provided for by the Land Registration Act, and serves as a notice
and warning to third parties dealing with said property that
someone is claiming an interest on the same or a better right than
the registered owner thereof. (emphases supplied)

In the case at bar, the reason given for the non-registration of the deed of sale with
assumption of mortgage was that the owner’s duplicate copy of the certificate of title
was in the possession of HMDF. It was not shown, however, that either
respondents Barrameda or respondents Calingo exerted any effort to retrieve the
owner’s duplicate copy from the HMDF for the purpose of registering the deed of
sale with assumption of mortgage. In fact, the parties did not even seek to obtain
the consent of, much less inform, the HMDF of the sale of the property. This,
despite the provision in the contract of mortgage prohibiting the mortgagor
(respondents Calingo) from selling or disposing the property without the written
consent of the mortgagee.15 Respondents Calingo, as party to the contract of
mortgage, are charged with the knowledge of such provision and are bound to
comply therewith. Apparently, there was haste in disposing the property that
respondents Calingo informed HMDF of the sale only on October 2, 1992 when
they served a copy of their letter to said office regarding the transfer of the property
to respondents Barrameda. There was no reason for the parties’ failure to seek the
approval of the HMDF to the sale as it appears from the letter of respondent
Angelica Paez-Barrameda to HMDF that they were ready to pay in full the balance
of the loan plus interest. What is more suspect is that the judgment against
respondents Calingo ordering them to pay the petitioners the sum of P1,159,355.90
was rendered on January 28, 1992, before the sale of the property on April 27,
1992. We also find it unsettling that respondents Barrameda, without any
reservation or inquiry, readily remitted to respondents Calingo the full payment for
the property on August 21, 1992 despite knowledge of the levy on execution over
 FIRST DIVISION
G.R. No. 147902 March 17, 2006
SPOUSES VICENTE YU AND DEMETRIA LEE-YU, Petitioners,
vs.
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review on Certiorari of the Decision1 dated
November 14, 2000 of the Court of Appeals (CA) in CA-G.R. SP No. 58982
and the CA Resolution dated April 26, 2001, which denied petitioner’s Motion
for Reconsideration.
The factual background of the case is as follows:
Under a Real Estate Mortgage dated August 15, 19942 and Amendments of
Real Estate Mortgage dated April 4, 19953 and December 4, 1995,4 spouses
Vicente Yu and Demetria Lee-Yu (petitioners) and spouses Ramon T. Yu and
Virginia A. Tiu, or Yu Tian Hock aka Victorino/Vicente Yu, mortgaged their title,
interest, and participation over several parcels of land located in Dagupan City
and Quezon City, in favor of the Philippine Commercial International Bank
(respondent) as security for the payment of a loan in the amount
of P9,000,000.00.5
As the petitioners failed to pay the loan, the interest, and the penalties due
thereon, respondent filed on July 21, 1998 with the Office of the Clerk of Court
and Ex-Officio Sheriff of the Regional Trial Court of Dagupan City a Petition for
Extra-Judicial Foreclosure of Real Estate Mortgage on the Dagupan City
properties.6 On August 3, 1998, the City Sheriff issued a Notice of Extra-
Judicial Sale scheduling the auction sale on September 10, 1998 at 10:00
o’clock in the morning or soon thereafter in front of the Justice Hall, Bonuan,
Tondaligan, Dagupan City.7
At the auction sale on September 10, 1998, respondent emerged as the
highest bidder.8 On September 14, 1998, a Certificate of Sale was issued in
favor of respondent.9 On October 1, 1998, the sale was registered with the
Registry of Deeds of Dagupan City.
About two months before the expiration of the redemption period, or on August
20, 1999, respondent filed an Ex-Parte Petition for Writ of Possession before
the Regional Trial Court of Dagupan City, docketed as Special Proceeding No.
99-00988-D and raffled to Branch 43 (RTC Branch 43).10 Hearing was
conducted on September 14, 1999 and respondent presented its evidence ex-
parte.11 The testimony of Rodante Manuel was admitted ex-parte and
thereafter the petition was deemed submitted for resolution.
On September 30, 1999, petitioners filed a Motion to Dismiss and to Strike Out
Testimony of Rodante Manuel stating that the Certificate of Sale dated
September 14, 1998 is void because respondent violated Article 2089 of the
Civil Code on the indivisibility of the mortgaged by conducting two separate
foreclosure proceedings on the mortgage properties in Dagupan City and
Quezon City and indicating in the two notices of extra-judicial sale that
petitioners’ obligation is P10,437,015.2012 as of March 31, 1998, when
petitioners are not indebted for the total amount of P20,874,031.56.13
In the meantime, petitioners filed a complaint for Annulment of Certificate of
Sale before the Regional Trial Court of Dagupan City, docketed as Civil Case
No. 99-03169-D and raffled to Branch 44 (RTC Branch 44).
On February 14, 2000, RTC Branch 43 denied petitioners’ Motion to Dismiss
and to Strike Out Testimony of Rodante Manuel, ruling that the filing of a
motion to dismiss is not allowed in petitions for issuance of writ of possession
under Section 7 of Act No. 3135.14
On February 24, 2000, petitioners filed a Motion for Reconsideration, further
arguing that the pendency of Civil Case No. 99-03169-D in RTC Branch 44 is a
prejudicial issue to Spec. Proc. No. 99-00988-D in RTC Branch 43, the
resolution of which is determinative on the propriety of the issuance of a writ of
possession.15
On May 8, 2000, RTC Branch 43 denied petitioners’ Motion for
Reconsideration, holding that the principle of prejudicial question is not
applicable because the case pending before RTC Branch 44 is also a civil
case and not a criminal case.16
On June 1, 2000, petitioners filed a Petition for Certiorari with the CA.17 On
November 14, 2000, the CA dismissed petitioners’ Petition for Certiorari on the
grounds that petitioners violated Section 8 of Act No. 3135 and disregarded
the rule against multiplicity of suits in filing Civil Case No. 99-03169-D in RTC
Branch 44 despite full knowledge of the pendency of Spec. Proc. No. 99-
00988-D in RTC Branch 43; that since the one-year period of redemption has
already lapsed, the issuance of a writ of possession in favor of respondent
becomes a ministerial duty of the trial court; that the issues in Civil Case No.
99-03169-D are not prejudicial questions to Spec. Proc. No. 99-00988-D
because: (a) the special proceeding is already fait accompli, (b) Civil Case No.
99-03169-D is deemed not filed for being contrary to Section 8 of Act No.
3135, (c) the filing of Civil Case No. 99-03169-D is an afterthought and dilatory
in nature, and (d) legally speaking what seems to exist is litis pendentia and
not prejudicial question.18
Petitioners filed a Motion for Reconsideration19 but it was denied by the CA on
April 26, 2001.20
Hence, the present Petition for Review on Certiorari.
Petitioners pose two issues for resolution, to wit:
A. Whether or not a real estate mortgage over several properties
located in different locality [sic] can be separately foreclosed in
different places.
B. Whether or not the pendency of a prejudicial issue renders the
issues in Special Proceedings No. 99-00988-D as [sic] moot and
academic.21
Anent the first issue, petitioners contend that since a real estate mortgage is
indivisible, the mortgaged properties in Dagupan City and Quezon City cannot
be separately foreclosed. Petitioners further point out that two notices of extra-
judicial sale indicated that petitioners’ obligation is P10,437,015.2022 each as
of March 31, 1998 or a total of P20,874,030.40,23 yet their own computation
yields only P9,957,508.90 as of February 27, 1998.
As to the second issue, petitioners posit that the pendency of Civil Case No.
99-03169-D is a prejudicial issue, the resolution of which will render the issues
in Spec. Proc. No. 99-00988-D moot and academic. Petitioners further aver
that they did not violate Section 8 of Act No. 3135 in filing a separate case to
annul the certificate of sale since the use of the word "may" in said provision
indicates that they have the option to seek relief of filing a petition to annul the
certificate of sale in the proceeding involving the application for a writ of
possession or in a separate proceeding.
Respondent contends24 that, with respect to the first issue, the filing of two
separate foreclosure proceedings did not violate Article 2089 of the Civil Code
on the indivisibility of a real estate mortgage since Section 2 of Act No. 3135
expressly provides that extra-judicial foreclosure may only be made in the
province or municipality where the property is situated. Respondent further
submits that the filing of separate applications for extra-judicial foreclosure of
mortgage involving several properties in different locations is allowed by A.M.
No. 99-10-05-0, the Procedure on Extra-Judicial Foreclosure of Mortgage, as
further amended on August 7, 2001.
As to the second issue, respondent maintains that there is no prejudicial
question between Civil Case No. 99-03169-D and Spec. Proc. No. 99-00988-D
since the pendency of a civil action questioning the validity of the mortgage
and the extra-judicial foreclosure thereof does not bar the issuance of a writ of
possession. Respondent also insists that petitioners should have filed their
Petition to Annul the Certificate of Sale in the same case where possession is
being sought, that is, in Spec. Proc. No. 99-00988-D, and not in a separate
proceeding (Civil Case No. 99-01369-D) because the venue of the action to
question the validity of the foreclosure is not discretionary since the use of the
word "may" in Section 8 of Act No. 3135 refers to the filing of the petition or
action itself and not to the venue. Respondent further argues that even if
petitioners filed the Petition to Annul the Certificate of Sale in Spec. Proc. No.
99-00988-D, the writ of possession must still be issued because issuance of
the writ in favor of the purchaser is a ministerial act of the trial court and the
one-year period of redemption has already lapsed.
Anent the first issue, the Court finds that petitioners have a mistaken notion
that the indivisibility of a real estate mortgage relates to the venue of extra-
judicial foreclosure proceedings. The rule on indivisibility of a real estate
mortgage is provided for in Article 2089 of the Civil Code, which provides:
Art. 2089. A pledge or mortgage is indivisible, even though the debt may be
divided among the successors in interest of the debtor or of the creditor.
Therefore, the debtor’s heir who has paid a part of the debt cannot ask for the
proportionate extinguishment of the pledge or mortgage as the debt is not
completely satisfied.
Neither can the creditor’s heir who received his share of the debt return the
pledge or cancel the mortgage, to the prejudice of the other heirs who have not
been paid.
From these provisions is excepted the case in which, there being several
things given in mortgage or pledge, each one of them guarantees only a
determinate portion of the credit.
The debtor, in this case, shall have a right to the extinguishment of the pledge
or mortgage as the portion of the debt for which each thing is specially
answerable is satisfied.
This rule presupposes several heirs of the debtor or creditor25 and therefore
not applicable to the present case. Furthermore, what the law proscribes is the
foreclosure of only a portion of the property or a number of the several
properties mortgaged corresponding to the unpaid portion of the debt where,
before foreclosure proceedings, partial payment was made by the debtor on
his total outstanding loan or obligation. This also means that the debtor cannot
ask for the release of any portion of the mortgaged property or of one or some
of the several lots mortgaged unless and until the loan thus secured has been
fully paid, notwithstanding the fact that there has been partial fulfillment of the
obligation. Hence, it is provided that the debtor who has paid a part of the debt
cannot ask for the proportionate extinguishment of the mortgage as long as the
debt is not completely satisfied.26 In essence, indivisibility means that the
mortgage obligation cannot be divided among the different lots,27 that is, each
and every parcel under mortgage answers for the totality of the debt.28
On the other hand, the venue of the extra-judicial foreclosure proceedings is
the place where each of the mortgaged property is located, as prescribed by
Section 2 of Act No. 3135,29 to wit:
SECTION 2. Said sale cannot be made legally outside of the province in which
the property sold is situated; and in case the place within said province in
which the sale is to be made is subject to stipulation, such sale shall be made
in said place or in the municipal building of the municipality in which the
property or part thereof is situated.
A.M. No. 99-10-05-0,30 the Procedure on Extra-Judicial Foreclosure of
Mortgage, lays down the guidelines for extra-judicial foreclosure proceedings
on mortgaged properties located in different provinces. It provides that the
venue of the extra-judicial foreclosure proceedings is the place where each of
the mortgaged property is located. Relevant portion thereof provides:
Where the application concerns the extrajudicial foreclosure of mortgages of
real estates and/or chattels in different locations covering one indebtedness,
only one filing fee corresponding to such indebtedness shall be collected. The
collecting Clerk of Court shall, apart from the official receipt of the fees, issue a
certificate of payment indicating the amount of indebtedness, the filing fees
collected, the mortgages sought to be foreclosed, the real estates and/or
chattels mortgaged and their respective locations, which certificate shall
serve the purpose of having the application docketed with the Clerks of
Court of the places where the other properties are located and of
allowing the extrajudicial foreclosures to proceed thereat. (Emphasis
supplied)
The indivisibility of the real estate mortgage is not violated by conducting two
separate foreclosure proceedings on mortgaged properties located in different
provinces as long as each parcel of land is answerable for the entire debt.
Petitioners’ assumption that their total obligation is P20,874,030.40 because
the two notices of extra-judicial sale indicated that petitioners’ obligation
is P10,437,015.2031 each, is therefore flawed. Considering the indivisibility of a
real estate mortgage, the mortgaged properties in Dagupan City and Quezon
City are made to answer for the entire debt of P10,437,015.29.32
As to the second issue, that is, whether a civil case for annulment of a
certificate of sale is a prejudicial question to a petition for issuance of a writ of
possession, this issue is far from novel and, in fact, not without precedence. In
Pahang v. Vestil,33 the Court said:
A prejudicial question is one that arises in a case the resolution of which is a
logical antecedent of the issue involved therein, and the cognizance of which
pertains to another tribunal. It generally comes into play in a situation where a
civil action and a criminal action are both pending and there exists in the
former an issue that must be preemptively resolved before the criminal action
may proceed, because howsoever the issue raised in the civil action is
resolved would be determinative juris et de jure of the guilt or innocence of the
accused in the criminal case. The rationale behind the principle of prejudicial
question is to avoid two conflicting decisions. 1avvph!l.net
In the present case, the complaint of the petitioners for Annulment of
Extrajudicial Sale is a civil action and the respondent’s petition for the issuance
of a writ of possession of Lot No. 3-A, Block 1, Psd-07-021410, TCT No.
44668 is but an incident in the land registration case and, therefore, no
prejudicial question can arise from the existence of the two actions. A similar
issue was raised in Manalo v. Court of Appeals, where we held that:
At any rate, it taxes our imagination why the questions raised in Case No. 98-
0868 must be considered determinative of Case No. 9011. The basic issue in
the former is whether the respondent, as the purchaser in the extrajudicial
foreclosure proceedings, may be compelled to have the property repurchased
or resold to a mortgagor’s successor-in-interest (petitioner); while that in the
latter is merely whether the respondent, as the purchaser in the extrajudicial
foreclosure proceedings, is entitled to a writ of possession after the statutory
period for redemption has expired. The two cases, assuming both are pending,
can proceed separately and take their own direction independent of each
other.34
In the present case, Civil Case No. 99-01369-D and Spec. Proc. No. 99-
00988-D are both civil in nature. The issue in Civil Case No. 99-01369-D is
whether the extra-judicial foreclosure of the real estate mortgage executed by
the petitioners in favor of the respondent and the sale of their properties at
public auction are null and void, whereas, the issue in Spec. Proc. No. 99-
00988-D is whether the respondent is entitled to a writ of possession of the
foreclosed properties. Clearly, no prejudicial question can arise from the
existence of the two actions. The two cases can proceed separately and take
their own direction independently of each other.
Nevertheless, there is a need to correct the CA’s view that petitioners violated
Section 8 of Act No. 3135 and disregarded the proscription on multiplicity of
suits by instituting a separate civil suit for annulment of the certificate of sale
while there is a pending petition for issuance of the writ of possession in a
special proceeding.
Section 8 of Act No. 3135 provides:
Sec. 8. Setting aside of sale and writ of possession. – The debtor may, in the
proceedings in which possession was requested, but not later than thirty days
after the purchaser was given possession, petition that the sale be set aside
and the writ of possession cancelled, specifying the damages suffered by him,
because the mortgage was not violated or the sale was not made in
accordance with the provisions hereof, and the court shall take cognizance of
this petition in accordance with the summary procedure provided for in section
one hundred and twelve of Act Numbered Four hundred and ninety-six; and if
it finds the complaint of the debtor justified, it shall dispose in his favor of all or
part of the bond furnished by the person who obtained possession. Either of
the parties may appeal from the order of the judge in accordance with section
fourteen of Act Numbered Four hundred and ninety-six; but the order of
possession shall continue in effect during the pendency of the appeal.
(Emphasis supplied)
Under the provision above cited, the mortgagor may file a petition to set aside
the sale and for the cancellation of a writ of possession with the trial court
which issued the writ of possession within 30 days after the purchaser
mortgagee was given possession. It provides the plain, speedy, and adequate
remedy in opposing the issuance of a writ of possession.35 Thus, this provision
presupposes that the trial court already issued a writ of possession. In Sps.
Ong v. Court of Appeals,36 the Court elucidated:

The law is clear that the purchaser must first be placed in possession of the
mortgaged property pending proceedings assailing the issuance of the writ of
possession. If the trial court later finds merit in the petition to set aside the writ
of possession, it shall dispose in favor of the mortgagor the bond furnished by
the purchaser. Thereafter, either party may appeal from the order of the judge
in accordance with Section 14 of Act 496, which provides that "every order,
decision, and decree of the Court of Land Registration may be reviewed…in
the same manner as an order, decision, decree or judgment of a Court of First
Instance (RTC) might be reviewed." The rationale for the mandate is to allow
the purchaser to have possession of the foreclosed property without delay,
such possession being founded on his right of ownership.37

Accordingly, Section 8 of Act No. 3135 is not applicable to the present case
since at the time of the filing of the separate civil suit for annulment of the
certificate of sale in RTC Branch 44, no writ of possession was yet issued by
RTC Branch 43.

Similarly, the Court rejects the CA’s application of the principle of litis
pendentia to Civil Case No. 99-03169-D in relation to Spec. Proc. No. 99-
00988-D. Litis pendentia refers to that situation wherein another action is
pending between the same parties for the same cause of actions and that the
second action becomes unnecessary and vexatious. For litis pendentia to be
invoked, the concurrence of the following requisites is necessary: (a) identity of
parties or at least such as represent the same interest in both actions; (b)
identity of rights asserted and reliefs prayed for, the reliefs being founded on
the same facts; and, (c) the identity in the two cases should be such that the
judgment that may be rendered in one would, regardless of which party is
successful, amount to res judicata in the other.38

Applying the foregoing criteria in the instant case, litis pendentia does not
obtain in this case because of the absence of the second and third requisites.
The issuance of the writ of possession being a ministerial function,
and summary in nature, it cannot be said to be a judgment on the merits, but
simply an incident in the transfer of title. Hence, a separate case for annulment
of mortgage and foreclosure sale cannot be barred by litis pendentia or res
judicata.39 Thus, insofar as Spec. Proc. No. 99-00988-D and Civil Case No.
99-03169-D pending before different branches of RTC Dagupan City are
concerned, there is no litis pendentia.

To sum up, the Court holds that the rule on indivisibility of the real estate
mortgage cannot be equated with the venue of foreclosure proceedings on
mortgaged properties located in different provinces since these are two
unrelated concepts. Also, no prejudicial question can arise from the existence
of a civil case for annulment of a certificate of sale and a petition for the
issuance of a writ of possession in a special proceeding since the two cases
are both civil in nature which can proceed separately and take their own
direction independently of each other.

Furthermore, since the one-year period to redeem the foreclosed properties

lapsed on October 1, 1999, title to the foreclosed properties had already been
consolidated under the name of the respondent. As the owner of the
properties, respondent is entitled to its possession as a matter of right.40 The
issuance of a writ of possession over the properties by the trial court is merely
a ministerial function. As such, the trial court neither exercises its official
discretion nor judgment.41 Any question regarding the validity of the mortgage
or its foreclosure cannot be a legal ground for refusing the issuance of a writ of
possession.42 Regardless of the pending suit for annulment of the certificate of
sale, respondent is entitled to a writ of possession, without prejudice of course
to the eventual outcome of said case.43

WHEREFORE, the petition is DENIED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-29740, November 10, 1978
TERESITA ROSAL ARRAZOLA, petitioner-appellee,
vs. PEDRO A. BERNAS and SOLEDAD VERNAS ALIVIO, oppositors-
appellants.
Gellada & Gellada for appellants.
Venicio Escolin for appellee.
AQUINO, J.:
This case is about the cancellation of an adverse claim which was annotated
on Transfer Certificates of Title Nos. T-6881 and T-6882 in the name of
Teresita Rosal Bernas (Arrazola), covering Lots Nos. 371 and 373 of the Pilar,
Capiz cadastre with a total area of 12,830 square meters.
Teresita was allegedly an adopted daughter of Elviro Bernas who on May 5,
1967, when he was 79 years old, executed in Iloilo City a notarized will
wherein he disinherited Teresita and instituted his brother Pedro A. Bernas
and his sister Soledad Bernas Alivio as heirs to all his properties, including
Lots Nos. 371 and 373 which he had allegedly "involuntarily transferred" to
Teresita.
A month later, or on June 5, 1967, Elviro Bernas died in Roxas City. His
brother Pedro filed with the Court of First Instance of Capiz a petition dated
September 6, 1967 for the probate of his will (Special Proceeding No. V-2965).
On December 12, 1967, Pedro A. Bernas filed with the register of deeds of
Capiz a verified notice of adverse claimwhich was recorded as follows:
Entry No. 27222. Notice of adverse claim in favor of
Pedro and Soledad, all surnamed Bernas. Claiming
ownership in the parcels of land described in T-6881
and T-6882 by virtue of the Last Will executed before
Not. Public Reynaldo Gellada of Iloilo City on May 5,
1967, Doc. No. 4, page 2, Book III, series of 1967: by
Elviro Bernas. — Inscription — Dec. 12, 1967 at 8:20
a.m.
He alleged in that adverse claim that Lots Nos. 371 and 373 were conveyed by
his brother Elviro to Teresita Rosal Bernas "involuntarily, fictitiously and
without consideration" and that in Elviro's will the two lots were devised to him
(Pedro) and his sister Soledad. A copy of the will was attached to the adverse
claim.
After the register of deeds had annotated the adverse claim on TCT Nos. T-
6881 and T-6882, Teresita R. Bernas Arrazola filed in the cadastral and
probate proceedings a motion dated August 13, 1968 for the cancellation of
the annotation of adverse claim. The motion was predicated on the grounds
that she was not served with prior notice" of the adverse claim and that there
was "no petition for approval or justification" thereof filed with the court. Pedro
A. Bernas and Soledad Bernas Alivio opposed the motion. The lower court in
its order of August 20, 1968 granted it and ordered the register of deeds to
cancel the annotation. The oppositors appealed.
The correctness of the lower court's order is to be passed upon in the light of
section 110 of Act No. 496 which reads:
SEC. 110. Whoever claims any right or interest in
registered land 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. The statement shall be signed and sworn to,
and shall state the adverse claimant's residence and
designate a place at which all notices may be served
upon him. This statement shall be entitled to
registration as an adverse claim, and the court, upon a
petition of any party in interest, shall grant a speedy
hearing upon the question of the validity of such
adverse claim and shall enter such decree therein as
justice and equity may require. If the claim is adjudged
to be invalid, the registration shall be canceled. If in any
case the court after notice and hearing shall find that a
claim thus registered was frivolous or vexatious, it may
tax the adverse claimant double or treble costs in its
discretion.
Under section 110, the adverse claimant must be one who claims any right or
interest in registered land adverse to the registered owner, arising subsequent
to the original registration. That interest is registerable as an adverse claim if
no other provision is made in Act No. 496 for its registration.
Applying section 110, it was held that a claim based on occurrences prior to
the original registration is not registerable as an adverse claim (De los Reyes
vs. De los Reyes, 91 Phil. 528).
A lease over a parcel of land for a ten-year period, which could not be
registered because the owner's duplicate of the title was not surrendered,
could be registered as an adverse claim and the owner could be compelled to
surrender the owner's duplicate of the title so that the adverse claim could be
annotated thereon. If the adverse claim turns out to be invalid, the owner could
ask for its cancellation and, if found to be frivolous or vexatious, then double or
treble costs may be adjudged against the adverse claimant. (Register of
Deeds of Manila vs. Tinoco Vda. de Cruz, 95 Phil. 818)
But where the vendee of a parcel of land may register the deed of sale in his
favor, as provided for in section 57 of Act No. 496, he is not entitled to cause
that sale to be annotated as an adverse claim on the vendor's title (Register of
Deeds of Quezon City vs. Nicandro, 111 Phil. 989, 997).
An example of a baseless adverse claim is when the possessor of land already
registered in the name of another person claims the land on the basis of
prescription and adverse possession. That claim is not registerable as an
adverse claim (Estella vs. Register of Deeds of Rizal, 106 Phil. 911).
However, the claim of a person that she has hereditary rights in the land
fraudulently registered in her sister's name, because the land belonged to their
mother, whose estate is pending settlement in a special proceeding, is
registerable as an adverse claim (Gabriel vs. Register of Deeds of Rizal, 118
Phil. 980).
In the instant case, the lower court ordered the cancellation of the adverse
claim because the will of Elviro Bernas had not yet been probated. It reasoned
out that before the probate Pedro A. Bernas and Soledad Bernas Alivio are
merely presumptive heirs with a "contingent, expectant and inchoate" interest
in the two lots.
We hold that the lower court erred in ordering the cancellation of the adverse
claim. It is true that the will of Elviro Bernas has not yet been probated but the
fact is that there is a pending proceeding for its probate. And in that will the
testator transmitted to his surviving brother and sister, the herein oppositors-
appellants or adverse claimants, the right to secure a declaration as to the
invalidity of his conveyance of lots Nos. 371 and 373 to Teresita Rosal
Arrazola.
Because of that will, Teresita's title to the two lots have become controversial.
To alert third persons, or for that matter the whole world, to the fact that Pedro
A. Bernas and Soledad Bernas Alivio have an adverse claim on the two lots,
section 110 of Act No. 496 gives them the remedy of causing to be annotated
their adverse claim on the titles of the two lots. If that remedy is not given to
them, then the registered owner can transfer the lots to an innocent purchaser
for value and, in that event, the unregistered adverse claim will be nullified or
frustrated. (See Reyes vs. Court of Appeals, 95 Phil. 952 as to the right of an
heir to sue for the annulment of a conveyance made in fraud of the deceased.)

The purpose of annotating the adverse claim on the title of the disputed land is
to apprise third persons that there is a controversy over the ownership of the
land and to preserve and protect the right of the adverse claimant during the
pendency of the controversy. It is a notice to third persons that any transaction
regarding the disputed land is subject to the outcome of the dispute.

Appellants' adverse claim, which was made in good faith, has some basis and
semblance of plausibility and is not palpably frivolous or vexatious. Hence, it is
premature to order the cancellation of the annotation thereof before it is finally
determined by the courts that the titles of Teresita Rosal Arrazola to the
disputed lots are indefeasible and that appellants' claim is devoid of merit.

The instant case has some similarity to Ty Sin Tei vs. Dy Piao, 103 Phil. 858,
where the testator, Dy Lac, in 1940 purchased houses and a lot located at
Zurbaran Street, Manila, and placed the title thereof, Transfer Certificate of
Title No. 58652, in the name of his maidservant and concubine named Paz Ty
Sin Tei. After the testator's death in 1948, Paz filed a petition for the probate of
his will. Lee Dy Piao and Uy Cho, the respective legitimate son and widow of
Dy Lac acting pursuant to section 110 of Act No. 496, caused their claim, as
heirs of Dy Lac, to be annotated on the back of TCT No. 58652 pending the
determination of their hereditary rights in the testamentary proceeding.

On March 23, 1955, Paz Ty Sin Tei filed a petition in the land registration
record of TCT No. 58652 for the cancellation of the adverse claim. The Court
of First Instance of Manila cancelled it over Lee Dy Piao's opposition. On
appeal, this Court set aside the order of cancellation and further held that the
adverse claim could subsist concurrently with a subsequent annotation of a
notice of lis pendens which referred to a case filed by Lee Dy Piao, involving
the same right or interest covered by the adverse claim.

In further support of our holding that the lower court erred in ordering the
cancellation of the annotation of the adverse claim, it is also relevant to cite the
holding that where a guardianship proceeding was instituted for an
octogenarian woman, it was proper to annotate on the title of her land the
pendency of such a proceeding by means of a notice of lis pendens for the
purpose of alerting anyone who might wish to buy the land that his purchase
might be questioned later on (Diaz vs. Hon. Perez, 103 Phil. 102). An adverse
claim and a notice of lis pendens have the same purpose.

In this case, the trial court relied on the ruling of the Court of Appeals that the
contingent, expectant and inchoate hereditary rights of the children of
a living parent do not constitute an adverse claim during his lifetime which
could be annotated on the titles covering the parent's land (Diaz vs. Santos
Diaz, CA 54 0. G. 8082). That is an illustration of a frivolous or vexatious
adverse claim.

That ruling is not applicable to this case because in the Diaz case the
hereditary rights had not yet accrued, since the parent was still alive. In the
instant case, the testator is dead and there is a proceeding for the probate of
his will which is the basis of appellants' adverse claim. Hence, they are entitled
to announce to third persons, by means of a notice of adverse claim annotated
on the titles of the two lots, that they are contesting the validity of those titles.

It has been said that the annotation of an adverse claim should not be
confused with its validity which should be litigated in a proper proceeding and
that the registration of an invalid adverse claim is not as harmful as the non-
registration of a valid one (Gabriel vs. Register of Deeds of Rizal, 118 Phil.
980).

WHEREFORE, the lower court's order of August 20, 1968, ordering the
cancellation of appellants' adverse claim on TCT Nos. T-6881 and T-6882, is
reversed and set aside. Costs against the petitioner-appellee.

SO ORDERED.
 FIRST DIVISION
G.R. No. 144225, June 17, 2003
SPOUSES GODOFREDO ALFREDO and CARMEN LIMON ALFREDO,
SPOUSES ARNULFO SAVELLANO and EDITHA B. SAVELLANO, DANTON D.
MATAWARAN, SPOUSES DELFIN F. ESPIRITU, JR. and ESTELA S. ESPIRITU
and ELIZABETH TUAZON, Petitioners,
vs. SPOUSES ARMANDO BORRAS and ADELIA LOBATON
BORRAS, Respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review assailing the Decision1 of the Court of Appeals
dated 26 November 1999 affirming the decision2 of the Regional Trial Court of
Bataan, Branch 4, in Civil Case No. DH-256-94. Petitioners also question the
Resolution of the Court of Appeals dated 26 July 2000 denying petitioners’ motion
for reconsideration.
The Antecedent Facts
A parcel of land measuring 81,524 square meters ("Subject Land") in Barrio Culis,
Mabiga, Hermosa, Bataan is the subject of controversy in this case. The registered
owners of the Subject Land were petitioner spouses, Godofredo Alfredo
("Godofredo") and Carmen Limon Alfredo ("Carmen"). The Subject Land is covered
by Original Certificate of Title No. 284 ("OCT No. 284") issued to Godofredo and
Carmen under Homestead Patent No. V-69196.
On 7 March 1994, the private respondents, spouses Armando Borras ("Armando")
and Adelia Lobaton Borras ("Adelia"), filed a complaint for specific performance
against Godofredo and Carmen before the Regional Trial Court of Bataan, Branch
4. The case was docketed as Civil Case No. DH-256-94.
Armando and Adelia alleged in their complaint that Godofredo and Carmen
mortgaged the Subject Land for ₱7,000.00 with the Development Bank of the
Philippines ("DBP"). To pay the debt, Carmen and Godofredo sold the Subject Land
to Armando and Adelia for ₱15,000.00, the buyers to pay the DBP loan and its
accumulated interest, and the balance to be paid in cash to the sellers.
Armando and Adelia gave Godofredo and Carmen the money to pay the loan to
DBP which signed the release of mortgage and returned the owner’s duplicate copy
of OCT No. 284 to Godofredo and Carmen. Armando and Adelia subsequently paid
the balance of the purchase price of the Subject Land for which Carmen issued a
receipt dated 11 March 1970. Godofredo and Carmen then delivered to Adelia the
owner’s duplicate copy of OCT No. 284, with the document of cancellation of
mortgage, official receipts of realty tax payments, and tax declaration in the name of
Godofredo. Godofredo and Carmen introduced Armando and Adelia, as the new
owners of the Subject Land, to the Natanawans, the old tenants of the Subject
Land. Armando and Adelia then took possession of the Subject Land.
In January 1994, Armando and Adelia learned that hired persons had entered the
Subject Land and were cutting trees under instructions of allegedly new owners of
the Subject Land. Subsequently, Armando and Adelia discovered that Godofredo
and Carmen had re-sold portions of the Subject Land to several persons.
On 8 February 1994, Armando and Adelia filed an adverse claim with the Register
of Deeds of Bataan. Armando and Adelia discovered that Godofredo and Carmen
had secured an owner’s duplicate copy of OCT No. 284 after filing a petition in court
for the issuance of a new copy. Godofredo and Carmen claimed in their petition that
they lost their owner’s duplicate copy. Armando and Adelia wrote Godofredo and
Carmen complaining about their acts, but the latter did not reply. Thus, Armando
and Adelia filed a complaint for specific performance.
On 28 March 1994, Armando and Adelia amended their complaint to include the
following persons as additional defendants: the spouses Arnulfo Savellano and
Editha B. Savellano, Danton D. Matawaran, the spouses Delfin F. Espiritu, Jr. and
Estela S. Espiritu, and Elizabeth Tuazon ("Subsequent Buyers"). The Subsequent
Buyers, who are also petitioners in this case, purchased from Godofredo and
Carmen the subdivided portions of the Subject Land. The Register of Deeds of
Bataan issued to the Subsequent Buyers transfer certificates of title to the lots they
purchased.
In their answer, Godofredo and Carmen and the Subsequent Buyers (collectively
"petitioners") argued that the action is unenforceable under the Statute of Frauds.
Petitioners pointed out that there is no written instrument evidencing the alleged
contract of sale over the Subject Land in favor of Armando and Adelia. Petitioners
objected to whatever parole evidence Armando and Adelia introduced or offered on
the alleged sale unless the same was in writing and subscribed by Godofredo.
Petitioners asserted that the Subsequent Buyers were buyers in good faith and for
value. As counterclaim, petitioners sought payment of attorney’s fees and incidental
expenses.
Trial then followed. Armando and Adelia presented the following witnesses: Adelia,
Jesus Lobaton, Roberto Lopez, Apolinario Natanawan, Rolando Natanawan,
Tomas Natanawan, and Mildred Lobaton. Petitioners presented two witnesses,
Godofredo and Constancia Calonso.
On 7 June 1996, the trial court rendered its decision in favor of Armando and
Adelia. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of
plaintiffs, the spouses Adelia Lobaton Borras and Armando F. Borras, and against
the defendant-spouses Godofredo Alfredo and Carmen Limon Alfredo, spouses
Arnulfo Sabellano and Editha B. Sabellano, spouses Delfin F. Espiritu, Jr. and
Estela S. Espiritu, Danton D. Matawaran and Elizabeth Tuazon, as follows:
1. Declaring the Deeds of Absolute Sale of the disputed parcel of land
(covered by OCT No. 284) executed by the spouses Godofredo Alfredo
and Camen Limon Alfredo in favor of spouses Arnulfo Sabellano and
Editha B. Sabellano, spouses Delfin F. Espiritu, Danton D. Matawaran
and Elizabeth Tuazon, as null and void;
2. Declaring the Transfer Certificates of Title Nos. T-163266 and T-
163267 in the names of spouses Arnulfo Sabellano and Editha B.
Sabellano; Transfer Certificates of Title Nos. T-163268 and 163272 in
the names of spouses Delfin F. Espiritu, Jr. and Estela S. Espiritu;
Transfer Certificates of Title Nos. T-163269 and T-163271 in the name
of Danton D. Matawaran; and Transfer Certificate of Title No. T-163270
in the name of Elizabeth Tuazon, as null and void and that the Register
of Deeds of Bataan is hereby ordered to cancel said titles;
3. Ordering the defendant-spouses Godofredo Alfredo and Carmen
Limon Alfredo to execute and deliver a good and valid Deed of
Absolute Sale of the disputed parcel of land (covered by OCT No. 284)
in favor of the spouses Adelia Lobaton Borras and Armando F. Borras
within a period of ten (10) days from the finality of this decision;
4. Ordering defendant-spouses Godofredo Alfredo and Carmen Limon
Alfredo to surrender their owner’s duplicate copy of OCT No. 284
issued to them by virtue of the Order dated May 20, 1992 of the
Regional Trial Court of Bataan, Dinalupihan Branch, to the Registry of
Deeds of Bataan within ten (10) days from the finality of this decision,
who, in turn, is directed to cancel the same as there exists in the
possession of herein plaintiffs of the owner’s duplicate copy of said
OCT No. 284 and, to restore and/or reinstate OCT No. 284 of the
Register of Deeds of Bataan to its full force and effect;
5. Ordering the defendant-spouses Godofredo Alfredo and Carmen
Limon Alfredo to restitute and/or return the amount of the respective
purchase prices and/or consideration of sale of the disputed parcels of
land they sold to their co-defendants within ten (10) days from the
finality of this decision with legal interest thereon from date of the sale;
6. Ordering the defendants, jointly and severally, to pay plaintiff-
spouses the sum of ₱20,000.00 as and for attorney’s fees and litigation
expenses; and
7. Ordering defendants to pay the costs of suit.
Defendants’ counterclaims are hereby dismissed for lack of merit.
SO ORDERED.3
Petitioners appealed to the Court of Appeals.
On 26 November 1999, the Court of Appeals issued its Decision affirming the
decision of the trial court, thus:
WHEREFORE, premises considered, the appealed decision in Civil Case No. DH-
256-94 is hereby AFFIRMED in its entirety. Treble costs against the defendants-
appellants.
SO ORDERED.4
On 26 July 2000, the Court of Appeals denied petitioners’ motion for
reconsideration.
The Ruling of the Trial Court
The trial court ruled that there was a perfected contract of sale between the
spouses Godofredo and Carmen and the spouses Armando and Adelia. The trial
court found that all the elements of a contract of sale were present in this case. The
object of the sale was specifically identified as the 81,524-square meter lot in Barrio
Culis, Mabigas, Hermosa, Bataan, covered by OCT No. 284 issued by the Registry
of Deeds of Bataan. The purchase price was fixed at ₱15,000.00, with the buyers
assuming to pay the sellers’ ₱7,000.00 DBP mortgage loan including its
accumulated interest. The balance of the purchase price was to be paid in cash to
the sellers. The last payment of ₱2,524.00 constituted the full settlement of the
purchase price and this was paid on 11 March 1970 as evidenced by the receipt
issued by Carmen.
The trial court found the following facts as proof of a perfected contract of sale: (1)
Godofredo and Carmen delivered to Armando and Adelia the Subject Land; (2)
Armando and Adelia treated as their own tenants the tenants of Godofredo and
Carmen; (3) Godofredo and Carmen turned over to Armando and Adelia documents
such as the owner’s duplicate copy of the title of the Subject Land, tax declaration,
and the receipts of realty tax payments in the name of Godofredo; and (4) the DBP
cancelled the mortgage on the Subject Property upon payment of the loan of
Godofredo and Carmen. Moreover, the receipt of payment issued by Carmen
served as an acknowledgment, if not a ratification, of the verbal sale between the
sellers and the buyers. The trial court ruled that the Statute of Frauds is not
applicable because in this case the sale was perfected.
The trial court concluded that the Subsequent Buyers were not innocent
purchasers. Not one of the Subsequent Buyers testified in court on how they
purchased their respective lots. The Subsequent Buyers totally depended on the
testimony of Constancia Calonso ("Calonso") to explain the subsequent sale.
Calonso, a broker, negotiated with Godofredo and Carmen the sale of the Subject
Land which Godofredo and Carmen subdivided so they could sell anew portions to
the Subsequent Buyers.
Calonso admitted that the Subject Land was adjacent to her own lot. The trial court
pointed out that Calonso did not inquire on the nature of the tenancy of the
Natanawans and on who owned the Subject Land. Instead, she bought out the
tenants for ₱150,000.00. The buy out was embodied in a Kasunduan. Apolinario
Natanawan ("Apolinario") testified that he and his wife accepted the money and
signed the Kasunduan because Calonso and the Subsequent Buyers threatened
them with forcible ejectment. Calonso brought Apolinario to the Agrarian Reform
Office where he was asked to produce the documents showing that Adelia is the
owner of the Subject Land. Since Apolinario could not produce the documents, the
agrarian officer told him that he would lose the case. Thus, Apolinario was
constrained to sign the Kasunduan and accept the ₱150,000.00.
Another indication of Calonso’s bad faith was her own admission that she saw an
adverse claim on the title of the Subject Land when she registered the deeds of sale
in the names of the Subsequent Buyers. Calonso ignored the adverse claim and
proceeded with the registration of the deeds of sale.
The trial court awarded ₱20,000.00 as attorney’s fees to Armando and Adelia. In
justifying the award of attorney’s fees, the trial court invoked Article 2208 (2) of the
Civil Code which allows a court to award attorney’s fees, including litigation
expenses, when it is just and equitable to award the same. The trial court ruled that
Armando and Adelia are entitled to attorney’s fees since they were compelled to file
this case due to petitioners’ refusal to heed their just and valid demand.
The Ruling of the Court of Appeals
The Court of Appeals found the factual findings of the trial court well supported by
the evidence. Based on these findings, the Court of Appeals also concluded that
there was a perfected contract of sale and the Subsequent Buyers were not
innocent purchasers.
The Court of Appeals ruled that the handwritten receipt dated 11 March 1970 is
sufficient proof that Godofredo and Carmen sold the Subject Land to Armando and
Adelia upon payment of the balance of the purchase price. The Court of Appeals
found the recitals in the receipt as "sufficient to serve as the memorandum or note
as a writing under the Statute of Frauds."5 The Court of Appeals then reiterated the
ruling of the trial court that the Statute of Frauds does not apply in this case.
The Court of Appeals gave credence to the testimony of a witness of Armando and
Adelia, Mildred Lobaton, who explained why the title to the Subject Land was not in
the name of Armando and Adelia. Lobaton testified that Godofredo was then busy
preparing to leave for Davao. Godofredo promised that he would sign all the papers
once they were ready. Since Armando and Adelia were close to the family of
Carmen, they trusted Godofredo and Carmen to honor their commitment. Armando
and Adelia had no reason to believe that their contract of sale was not perfected or
validly executed considering that they had received the duplicate copy of OCT No.
284 and other relevant documents. Moreover, they had taken physical possession
of the Subject Land.
The Court of Appeals held that the contract of sale is not void even if only Carmen
signed the receipt dated 11 March 1970. Citing Felipe v. Heirs of Maximo
Aldon,6 the appellate court ruled that a contract of sale made by the wife without the
husband’s consent is not void but merely voidable. The Court of Appeals further
declared that the sale in this case binds the conjugal partnership even if only the
wife signed the receipt because the proceeds of the sale were used for the benefit
of the conjugal partnership. The appellate court based this conclusion on Article
1617of the Civil Code.
The Subsequent Buyers of the Subject Land cannot claim that they are buyers in
good faith because they had constructive notice of the adverse claim of Armando
and Adelia. Calonso, who brokered the subsequent sale, testified that when she
registered the subsequent deeds of sale, the adverse claim of Armando and Adelia
was already annotated on the title of the Subject Land. The Court of Appeals
believed that the act of Calonso and the Subsequent Buyers in forcibly ejecting the
Natanawans from the Subject Land buttresses the conclusion that the second sale
was tainted with bad faith from the very beginning.
Finally, the Court of Appeals noted that the issue of prescription was not raised in
the Answer. Nonetheless, the appellate court explained that since this action is
actually based on fraud, the prescriptive period is four years, with the period starting
to run only from the date of the discovery of the fraud. Armando and Adelia
discovered the fraudulent sale of the Subject Land only in January 1994. Armando
and Adelia lost no time in writing a letter to Godofredo and Carmen on 2 February
1994 and filed this case on 7 March 1994. Plainly, Armando and Adelia did not
sleep on their rights or lose their rights by prescription.
The Court of Appeals sustained the award of attorney’s fees and imposed treble
costs on petitioners.
The Issues
Petitioners raise the following issues:
I
Whether the alleged sale of the Subject Land in favor of Armando and Adelia is
valid and enforceable, where (1) it was orally entered into and not in writing; (2)
Carmen did not obtain the consent and authority of her husband, Godofredo, who
was the sole owner of the Subject Land in whose name the title thereto (OCT No.
284) was issued; and (3) it was entered into during the 25-year prohibitive period for
alienating the Subject Land without the approval of the Secretary of Agriculture and
Natural Resources.
II
Whether the action to enforce the alleged oral contract of sale brought after 24
years from its alleged perfection had been barred by prescription and by laches.
III
Whether the deeds of absolute sale and the transfer certificates of title over the
portions of the Subject Land issued to the Subsequent Buyers, innocent purchasers
in good faith and for value whose individual titles to their respective lots are
absolute and indefeasible, are valid.
IV
Whether petitioners are liable to pay Armando and Adelia ₱20,0000.00 as
attorney’s fees and litigation expenses and the treble costs, where the claim of
Armando and Adelia is clearly unfounded and baseless.
V
Whether petitioners are entitled to the counterclaim for attorney’s fees and litigation
expenses, where they have sustained such expenses by reason of institution of a
clearly malicious and unfounded action by Armando and Adelia.8
The Court’s Ruling
The petition is without merit.
In a petition for review on certiorari under Rule 45, this Court reviews only errors of
law and not errors of facts.9 The factual findings of the appellate court are generally
binding on this Court.10 This applies with greater force when both the trial court and
the Court of Appeals are in complete agreement on their factual findings.11 In this
case, there is no reason to deviate from the findings of the lower courts. The facts
relied upon by the trial and appellate courts are borne out by the record. We agree
with the conclusions drawn by the lower courts from these facts.
Validity and Enforceability of the Sale
The contract of sale between the spouses Godofredo and Carmen and the spouses
Armando and Adelia was a perfected contract. A contract is perfected once there is
consent of the contracting parties on the object certain and on the cause of the
obligation.12 In the instant case, the object of the sale is the Subject Land, and the
price certain is ₱15,000.00. The trial and appellate courts found that there was a
meeting of the minds on the sale of the Subject Land and on the purchase price of
₱15,000.00. This is a finding of fact that is binding on this Court. We find no reason
to disturb this finding since it is supported by substantial evidence.
The contract of sale of the Subject Land has also been consummated because the
sellers and buyers have performed their respective obligations under the contract.
In a contract of sale, the seller obligates himself to transfer the ownership of the
determinate thing sold, and to deliver the same, to the buyer who obligates himself
to pay a price certain to the seller.13 In the instant case, Godofredo and Carmen
delivered the Subject Land to Armando and Adelia, placing the latter in actual
physical possession of the Subject Land. This physical delivery of the Subject Land
also constituted a transfer of ownership of the Subject Land to Armando and
Adelia.14 Ownership of the thing sold is transferred to the vendee upon its actual or
constructive delivery.15 Godofredo and Carmen also turned over to Armando and
Adelia the documents of ownership to the Subject Land, namely the owner’s
duplicate copy of OCT No. 284, the tax declaration and the receipts of realty tax
payments.
On the other hand, Armando and Adelia paid the full purchase price as evidenced
by the receipt dated 11 March 1970 issued by Carmen. Armando and Adelia fulfilled
their obligation to provide the ₱7,000.00 to pay the Dir obliagtion rmen. rchase
pricend Adelia . fredo and Carmen do not deny the existence of the cBP loan of
Godofredo and Carmen, and to pay the latter the balance of ₱8,000.00 in cash.
The ₱2,524.00 paid under the receipt dated 11 March 1970 was the last installment
to settle fully the purchase price. Indeed, upon payment to DBP of the ₱7,000.00
and the accumulated interests, the DBP cancelled the mortgage on the Subject
Land and returned the owner’s duplicate copy of OCT No. 284 to Godofredo and
Carmen.
The trial and appellate courts correctly refused to apply the Statute of Frauds to this
case. The Statute of Frauds16provides that a contract for the sale of real property
shall be unenforceable unless the contract or some note or memorandum of the
sale is in writing and subscribed by the party charged or his agent. The existence of
the receipt dated 11 March 1970, which is a memorandum of the sale, removes the
transaction from the provisions of the Statute of Frauds.
The Statute of Frauds applies only to executory contracts and not to contracts either
partially or totally performed.17Thus, where one party has performed one’s
obligation, oral evidence will be admitted to prove the agreement.18 In the instant
case, the parties have consummated the sale of the Subject Land, with both sellers
and buyers performing their respective obligations under the contract of sale. In
addition, a contract that violates the Statute of Frauds is ratified by the acceptance
of benefits under the contract.19 Godofredo and Carmen benefited from the contract
because they paid their DBP loan and secured the cancellation of their mortgage
using the money given by Armando and Adelia. Godofredo and Carmen also
accepted payment of the balance of the purchase price.
Godofredo and Carmen cannot invoke the Statute of Frauds to deny the existence
of the verbal contract of sale because they have performed their obligations, and
have accepted benefits, under the verbal contract. 20 Armando and Adelia have also
performed their obligations under the verbal contract. Clearly, both the sellers and
the buyers have consummated the verbal contract of sale of the Subject Land. The
Statute of Frauds was enacted to prevent fraud.21 This law cannot be used to
advance the very evil the law seeks to prevent.
Godofredo and Carmen also claim that the sale of the Subject Land to Armando
and Adelia is void on two grounds. First, Carmen sold the Subject Land without the
marital consent of Godofredo. Second, the sale was made during the 25-year
period that the law prohibits the alienation of land grants without the approval of the
Secretary of Agriculture and Natural Resources.
These arguments are without basis.
The Family Code, which took effect on 3 August 1988, provides that any alienation
or encumbrance made by the husband of the conjugal partnership property without
the consent of the wife is void. However, when the sale is made before the
effectivity of the Family Code, the applicable law is the Civil Code.22
Article 173 of the Civil Code provides that the disposition of conjugal property
without the wife’s consent is not void but merely voidable. Article 173 reads:
The wife may, during the marriage, and within ten years from the transaction
questioned, ask the courts for the annulment of any contract of the husband
entered into without her consent, when such consent is required, or any act or
contract of the husband which tends to defraud her or impair her interest in the
conjugal partnership property. Should the wife fail to exercise this right, she or her
heirs, after the dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.
In Felipe v. Aldon,23 we applied Article 173 in a case where the wife sold some
parcels of land belonging to the conjugal partnership without the consent of the
husband. We ruled that the contract of sale was voidable subject to annulment by
the husband. Following petitioners’ argument that Carmen sold the land to Armando
and Adelia without the consent of Carmen’s husband, the sale would only be
voidable and not void.
However, Godofredo can no longer question the sale. Voidable contracts are
susceptible of ratification.24 Godofredo ratified the sale when he introduced
Armando and Adelia to his tenants as the new owners of the Subject Land. The trial
court noted that Godofredo failed to deny categorically on the witness stand the
claim of the complainants’ witnesses that Godofredo introduced Armando and
Adelia as the new landlords of the tenants.25 That Godofredo and Carmen allowed
Armando and Adelia to enjoy possession of the Subject Land for 24 years is
formidable proof of Godofredo’s acquiescence to the sale. If the sale was truly
unauthorized, then Godofredo should have filed an action to annul the sale. He did
not. The prescriptive period to annul the sale has long lapsed. Godofredo’s conduct
belies his claim that his wife sold the Subject Land without his consent.
Moreover, Godofredo and Carmen used most of the proceeds of the sale to pay
their debt with the DBP. We agree with the Court of Appeals that the sale
redounded to the benefit of the conjugal partnership. Article 161 of the Civil Code
provides that the conjugal partnership shall be liable for debts and obligations
contracted by the wife for the benefit of the conjugal partnership. Hence, even if
Carmen sold the land without the consent of her husband, the sale still binds the
conjugal partnership.
Petitioners contend that Godofredo and Carmen did not deliver the title of the
Subject Land to Armando and Adelia as shown by this portion of Adelia’s testimony
on cross-examination:
Q -- No title was delivered to you by Godofredo Alfredo?
A -- I got the title from Julie Limon because my sister told me.26
Petitioners raise this factual issue for the first time. The Court of Appeals could have
passed upon this issue had petitioners raised this earlier. At any rate, the cited
testimony of Adelia does not convincingly prove that Godofredo and Carmen did not
deliver the Subject Land to Armando and Adelia. Adelia’s cited testimony must be
examined in context not only with her entire testimony but also with the other
circumstances.
Adelia stated during cross-examination that she obtained the title of the Subject
Land from Julie Limon ("Julie"), her classmate in college and the sister of Carmen.
Earlier, Adelia’s own sister had secured the title from the father of Carmen.
However, Adelia’s sister, who was about to leave for the United States, gave the
title to Julie because of the absence of the other documents. Adelia’s sister told
Adelia to secure the title from Julie, and this was how Adelia obtained the title from
Julie.
It is not necessary that the seller himself deliver the title of the property to the buyer
because the thing sold is understood as delivered when it is placed in the control
and possession of the vendee.27 To repeat, Godofredo and Carmen themselves
introduced the Natanawans, their tenants, to Armando and Adelia as the new
owners of the Subject Land. From then on, Armando and Adelia acted as the
landlords of the Natanawans. Obviously, Godofredo and Carmen themselves
placed control and possession of the Subject Land in the hands of Armando and
Adelia.
Petitioners invoke the absence of approval of the sale by the Secretary of
Agriculture and Natural Resources to nullify the sale. Petitioners never raised this
issue before the trial court or the Court of Appeals. Litigants cannot raise an issue
for the first time on appeal, as this would contravene the basic rules of fair play,
justice and due process.28 However, we will address this new issue to finally put an
end to this case.
The sale of the Subject Land cannot be annulled on the ground that the Secretary
did not approve the sale, which was made within 25 years from the issuance of the
homestead title. Section 118 of the Public Land Act (Commonwealth Act No. 141)
reads as follows:
SEC. 118. Except in favor of the Government or any of its branches, units, or
institutions or legally constituted banking corporation, lands acquired under free
patent or homestead provisions shall not be subject to encumbrance or alienation
from the date of the approval of the application and for a term of five years from and
after the date of the issuance of the patent or grant.
xxx
No alienation, transfer, or conveyance of any homestead after 5 years and before
twenty-five years after the issuance of title shall be valid without the approval of the
Secretary of Agriculture and Commerce, which approval shall not be denied except
on constitutional and legal grounds.
A grantee or homesteader is prohibited from alienating to a private individual a land
grant within five years from the time that the patent or grant is issued.29 A violation
of this prohibition renders a sale void.30 This prohibition, however, expires on the
fifth year. From then on until the next 20 years31 the land grant may be alienated
provided the Secretary of Agriculture and Natural Resources approves the
alienation. The Secretary is required to approve the alienation unless there are
"constitutional and legal grounds" to deny the approval. In this case, there are no
apparent constitutional or legal grounds for the Secretary to disapprove the sale of
the Subject Land.
The failure to secure the approval of the Secretary does not ipso facto make a sale
void.32 The absence of approval by the Secretary does not nullify a sale made after
the expiration of the 5-year period, for in such event the requirement of Section 118
of the Public Land Act becomes merely directory33 or a formality.34 The approval
may be secured later, producing the effect of ratifying and adopting the transaction
as if the sale had been previously authorized.35 As held in Evangelista v. Montano:36
Section 118 of Commonwealth Act No. 141, as amended, specifically enjoins that
the approval by the Department Secretary "shall not be denied except on
constitutional and legal grounds." There being no allegation that there were
constitutional or legal impediments to the sales, and no pretense that if the sales
had been submitted to the Secretary concerned they would have been disapproved,
approval was a ministerial duty, to be had as a matter of course and demandable if
refused. For this reason, and if necessary, approval may now be applied for and its
effect will be to ratify and adopt the transactions as if they had been previously
authorized. (Emphasis supplied)
Action Not Barred by Prescription and Laches
Petitioners insist that prescription and laches have set in. We disagree.
The Amended Complaint filed by Armando and Adelia with the trial court is
captioned as one for Specific Performance. In reality, the ultimate relief sought by
Armando and Adelia is the reconveyance to them of the Subject Land. An action for
reconveyance is one that seeks to transfer property, wrongfully registered by
another, to its rightful and legal owner.37 The body of the pleading or complaint
determines the nature of an action, not its title or heading.38 Thus, the present action
should be treated as one for reconveyance.39
Article 1456 of the Civil Code provides that a person acquiring property through
fraud becomes by operation of law a trustee of an implied trust for the benefit of the
real owner of the property. The presence of fraud in this case created an implied
trust in favor of Armando and Adelia. This gives Armando and Adelia the right to
seek reconveyance of the property from the Subsequent Buyers.40
To determine when the prescriptive period commenced in an action for
reconveyance, plaintiff’s possession of the disputed property is material. An action
for reconveyance based on an implied trust prescribes in ten years.41 The ten-year
prescriptive period applies only if there is an actual need to reconvey the property
as when the plaintiff is not in possession of the property.42 However, if the plaintiff,
as the real owner of the property also remains in possession of the property, the
prescriptive period to recover title and possession of the property does not run
against him.43 In such a case, an action for reconveyance, if nonetheless filed,
would be in the nature of a suit for quieting of title, an action that is imprescriptible.44
In this case, the appellate court resolved the issue of prescription by ruling that the
action should prescribe four years from discovery of the fraud. We must correct this
erroneous application of the four-year prescriptive period. In Caro v. Court of
Appeals,45 we explained why an action for reconveyance based on an implied trust
should prescribe in ten years. In that case, the appellate court also erroneously
applied the four-year prescriptive period. We declared in Caro:
We disagree. The case of Liwalug Amerol, et al. v. Molok Bagumbaran, G.R. No. L-
33261, September 30, 1987,154 SCRA 396 illuminated what used to be a gray area
on the prescriptive period for an action to reconvey the title to real property and,
corollarily, its point of reference:
xxx It must be remembered that before August 30, 1950, the date of the effectivity
of the new Civil Code, the old Code of Civil Procedure (Act No. 190) governed
prescription. It provided:
SEC. 43. Other civil actions; how limited.- Civil actions other than for the recovery of
real property can only be brought within the following periods after the right of action
accrues:
xxx xxx xxx
3. Within four years: xxx An action for relief on the ground of fraud, but the right of
action in such case shall not be deemed to have accrued until the discovery of the
fraud;
xxx xxx xxx
In contrast, under the present Civil Code, we find that just as an implied or
constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the
corresponding obligation to reconvey the property and the title thereto in favor of the
true owner. In this context, and vis-a-vis prescription, Article 1144 of the Civil Code
is applicable.
Article 1144. The following actions must be brought within ten years from the time
the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx xxx xxx
(Emphasis supplied).
An action for reconveyance based on an implied or constructive trust must
perforce prescribe in ten years and not otherwise. A long line of decisions of
this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is
now well-settled that an action for reconveyance based on an implied or
constructive trust prescribes in ten years from the issuance of the Torrens
title over the property. The only discordant note, it seems, is Balbin vs. Medalla
which states that the prescriptive period for a reconveyance action is four years.
However, this variance can be explained by the erroneous reliance on Gerona vs.
de Guzman. But in Gerona, the fraud was discovered on June 25,1948, hence
Section 43(3) of Act No. 190, was applied, the new Civil Code not coming into effect
until August 30, 1950 as mentioned earlier. It must be stressed, at this juncture, that
article 1144 and article 1456, are new provisions. They have no counterparts in the
old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to
as legal basis of the four-year prescriptive period for an action for reconveyance of
title of real property acquired under false pretenses.
An action for reconveyance has its basis in Section 53, paragraph 3 of Presidential
Decree No. 1529, which provides:
buyer, the seller ceases to have any title to transfer to any third person.54 If the
seller sells the same land to another, the second buyer who has actual or
constructive knowledge of the prior sale cannot be a registrant in good faith.55 Such
second buyer cannot defeat the first buyer’s title.56 In case a title is issued to the
second buyer, the first buyer may seek reconveyance of the property subject of the
sale.57

In all cases of registration procured by fraud, the owner may pursue all his legal and
equitable remedies against the parties to such fraud without prejudice, however, to
the rights of any innocent holder of the decree of registration on the original petition
or application, xxx
This provision should be read in conjunction with Article 1456 of the Civil Code,
which provides:
Article 1456. If property is acquired through mistake or fraud, the person obtaining it
is, by force of law, considered a trustee of an implied trust for the benefit of the
person from whom the property comes.
The law thereby creates the obligation of the trustee to reconvey the property and
the title thereto in favor of the true owner. Correlating Section 53, paragraph 3 of
Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144(2)
of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently
registered real property is ten (10) years reckoned from the date of the issuance of
the certificate of title xxx (Emphasis supplied)46
Thus, to merit protection under the second paragraph of Article 154458 of the Civil
Code, the second buyer must act in good faith in registering the deed.59 In this case,
the Subsequent Buyers’ good faith hinges on whether they had knowledge of the
previous sale. Petitioners do not dispute that Armando and Adelia registered their
adverse claim with the Registry of Deeds of Bataan on 8 February 1994. The
Subsequent Buyers purchased their respective lots only on 22 February 1994 as
shown by the date of their deeds of sale. Consequently, the adverse claim
registered prior to the second sale charged the Subsequent Buyers with
constructive notice of the defect in the title of the sellers,60 Godofredo and Carmen.
It is immaterial whether Calonso, the broker of the second sale, communicated to
the Subsequent Buyers the existence of the adverse claim. The registration of the
adverse claim on 8 February 1994 constituted, by operation of law, notice to the
whole world.61 From that date onwards, the Subsequent Buyers were deemed to
have constructive notice of the adverse claim of Armando and Adelia. When the
Subsequent Buyers purchased portions of the Subject Land on 22 February 1994,
they already had constructive notice of the adverse claim registered earlier.62 Thus,
the Subsequent Buyers were not buyers in good faith when they purchased their
lots on 22 February 1994. They were also not registrants in good faith when they
registered their deeds of sale with the Registry of Deeds on 24 February 1994.

Following Caro, we have consistently held that an action for reconveyance based
on an implied trust prescribes in ten years.47 We went further by specifying the
reference point of the ten-year prescriptive period as the date of the registration of
the deed or the issuance of the title.48
Had Armando and Adelia remained in possession of the Subject Land, their action
for reconveyance, in effect an action to quiet title to property, would not be subject
to prescription. Prescription does not run against the plaintiff in actual possession of
the disputed land because such plaintiff has a right to wait until his possession is
disturbed or his title is questioned before initiating an action to vindicate his
right.49 His undisturbed possession gives him the continuing right to seek the aid of
a court of equity to determine the nature of the adverse claim of a third party and its
effect on his title.50
Armando and Adelia lost possession of the Subject Land when the Subsequent
Buyers forcibly drove away from the Subject Land the Natanawans, the tenants of
Armando and Adelia.51 This created an actual need for Armando and Adelia to seek
reconveyance of the Subject Land. The statute of limitation becomes relevant in this
case. The ten-year prescriptive period started to run from the date the Subsequent
Buyers registered their deeds of sale with the Register of Deeds.
The Subsequent Buyers bought the subdivided portions of the Subject Land on 22
February 1994, the date of execution of their deeds of sale. The Register of Deeds
issued the transfer certificates of title to the Subsequent Buyers on 24 February
1994. Armando and Adelia filed the Complaint on 7 March 1994. Clearly,
prescription could not have set in since the case was filed at the early stage of the
ten-year prescriptive period.
The Subsequent Buyers’ individual titles to their respective lots are not absolutely
indefeasible. The defense of indefeasibility of the Torrens Title does not extend to a
transferee who takes the certificate of title with notice of a flaw in his title.63 The
principle of indefeasibility of title does not apply where fraud attended the issuance
of the titles as in this case.64
Attorney’s Fees and Costs
We sustain the award of attorney’s fees. The decision of the court must state the
grounds for the award of attorney’s fees. The trial court complied with this
requirement.65 We agree with the trial court that if it were not for petitioners’
unjustified refusal to heed the just and valid demands of Armando and Adelia, the
latter would not have been compelled to file this action.
The Court of Appeals echoed the trial court’s condemnation of petitioners’
fraudulent maneuverings in securing the second sale of the Subject Land to the
Subsequent Buyers. We will also not turn a blind eye on petitioners’ brazen tactics.
Thus, we uphold the treble costs imposed by the Court of Appeals on petitioners.
WHEREFORE, the petition is DENIED and the appealed decision is AFFIRMED.
Treble costs against petitioners.
SO ORDERED.

Neither is the action barred by laches. We have defined laches as the failure or
neglect, for an unreasonable time, to do that which, by the exercise of due
diligence, could or should have been done earlier.52 It is negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it.53 Armando and
Adelia discovered in January 1994 the subsequent sale of the Subject Land and
they filed this case on 7 March 1994. Plainly, Armando and Adelia did not sleep on
their rights.

Validity of Subsequent Sale of Portions of the Subject Land

Petitioners maintain that the subsequent sale must be upheld because the
Subsequent Buyers, the co-petitioners of Godofredo and Carmen, purchased and
registered the Subject Land in good faith. Petitioners argue that the testimony of
Calonso, the person who brokered the second sale, should not prejudice the
Subsequent Buyers. There is no evidence that Calonso was the agent of the
Subsequent Buyers and that she communicated to them what she knew about the
adverse claim and the prior sale. Petitioners assert that the adverse claim
registered by Armando and Adelia has no legal basis to render defective the
transfer of title to the Subsequent Buyers.

We are not persuaded. Godofredo and Carmen had already sold the Subject Land
to Armando and Adelia. The settled rule is when ownership or title passes to the
 FIRST DIVISION
G.R. No. 143369 November 27, 2002
LEOPOLDO C. LEONARDO, represented by his daughter
EMERENCIANA LEONARDO, petitioner,
vs.
VIRGINIA TORRES MARAVILLA and LEONOR C. NADAL, as
Administratrices of the Estate of MARIANO TORRES, as substituted
by FE NADAL VENTURINA, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review seeking to set aside the decision1 dated
November 26, 1999 and the resolution2 dated May 19, 2000 of the Court
of Appeals3 in CA-G.R. CV No. 52932, which affirmed the order4 of the
Regional Trial Court of Pasay City, Branch III, dismissing petitioner’s
complaint5 for "Delivery of Possession of Property, Owner’s Duplicate
Certificate of Title, Rentals and Damages," in Civil Case No. 93-10282.
The instant controversy stemmed from a dispute over a 1,151.80 square
meter lot, located in Pasay City, covered by Transfer Certificate of Title
No. 2355 (34515),6 and registered in the name of Mariano Torres y
Chavarria, the predecessor-in-interest of respondents. Petitioner claims
that he is the lawful owner of the disputed lot, having purchased it on
September 29, 1972 from a certain Eusebio Leonardo Roxas,7 who in turn
acquired the same lot by purchase on August 28, 1972 from Mariano
Torres y Chavarria.8
On September 14, 1972, Eusebio Leonardo Roxas sent a letter-
request9 to the Register of Deed of Pasay City asking for the registration
of the deed of sale allegedly executed in his favor by Mariano Torres y
Chavarria. The letter was entered in the Register’s Primary Book under
Entry No. 55780, Vol. V. The Office of the Register of Deeds, however, did
not register the deed as it was awaiting the final disposition of a pending
case10 between Mariano Torres y Chavarria and a certain Francisco E.
Fernandez involving title of the lot.11 Incidentally, the said case was
decided in favor of Mariano Torres y Chavarria, which decision became
final and executory on September 21, 1972.12
On October 6, 1972, petitioner likewise asked the Register of Deeds to
register the deeds of sale dated August 28, 1972 and the September 29,
1972 involving Transfer Certificate of Title No. 2355 (34515), and to issue
the corresponding transfer certificate of title in his name.13 Petitioner did
not present the owner’s duplicate copy of Transfer Certificate of Title No.
2355 (34515), which remained in the possession of respondents.
Petitioner’s letter-request was entered in the Primary Books of the
Register of Deeds under Entry No. 55952, V.5, on October 19, 1972. The
Register of Deeds, however, certified that the original copy of TCT No.
2355 (34515), could not be retrieved or located in the office of the Register
of Deeds of Pasay, hence, the requested registration could not be
effected.14
On November 13, 1972, petitioner executed an affidavit of adverse
claim15 over TCT No. 2355 (34515) which was entered in the Primary
Book under Entry No. 56039, Vol. 5, on November 15, 1972.
On May 18, 1993, the Register of Deeds of Pasay City was able to
retrieve the original copy of TCT No. 2355 (34515).16
On May 20, 1993, petitioner caused the annotation of his affidavit of
adverse claim on TCT No. 2355 (34515),17 and asked the respondents to
deliver possession of the owner’s duplicate copy of TCT No. 2355
(34515). When the latter ignored his demand, petitioner filed on
September 6, 1993 a complaint for "Delivery of Possession of Property,
Owner’s Duplicate Certificate of Title, Rentals and Damages." Petitioner
alleged that he filed the case against respondents only in 1993 because
he was living abroad.18
In their Answer, respondents countered that since 1938 up to the present,
the lot in question has been registered in the name of the late Mariano
Torres y Chavarria, their predecessor-in-interest, and that they have been
in material possession thereof in the concept of owners. In the settlement
of the estate of Mariano Torres y Chavarria, who died on August 30,
1974,19 his widow, Rosario Nadal, and his natural child, Virginia Torres
Maravilla, acquired the disputed lot by succession.20 After the demise of
Rosario Nadal, sometime in January 1990, her share in the said lot was
inherited by her sister, Leonor Nadal, who was appointed as special
administratrix of the estate of Rosario Nadal.21 Subsequently, Leonor
Nadal was also appointed administratrix of the estate of Mariano Torres y
Chavarria.22 Respondents maintain that they have been in open and
peaceful possession of the said property and that it was only in 1993 when
they came to know of the alleged claim of petitioners over the same
property.
Respondents contended further that the deeds of sale dated August 28,
1972 and September 29, 1972 are falsified documents and that the
signature of Mariano Torres y Chavarria on the August 28, 1972 deed of
absolute sale was a forgery. On February 28, 1994, respondents filed a
motion to dismiss23 the complaint on the grounds of: (1) non-payment of
the correct docket fees; (2) prescription; and (3) laches. The motion to
dismiss was denied on July 25, 1995.
Meanwhile, Leonor Nadal died on October 23, 1995, and was substituted
by Fe Nadal Venturina on January 19, 1996.24
On motion of respondents, the trial court reconsidered its order of July 25,
1995, and issued an order on February 1, 1996, dismissing petitioner’s
complaint on the ground of prescription and laches.
Dissatisfied, petitioner appealed to the Court of Appeals which affirmed
the assailed order on November 26, 1999. The motion for reconsideration
was denied on May 19, 2000.
Hence, the instant petition contending that the Court of Appeals erred in
holding that:
I
THE RIGHT OF PETITIONER TO ENFORCE THE DEEDS (EXHS. 2 AND
4) THROUGH HIS COMPLAINT FILED ON SEPTEMBER 6, 1993 HAD
ALREADY PRESCRIBED ON SEPTEMBER 29, 1982 PER ARTICLE
114[4];
II
THE TITLE ON THE PROPERTY REMAINED IN THE VENDOR’S
(MARIO TORRES) NAME BEFORE AND AFTER THE EXECUTION OF
THE DEEDS (EXHS. 2 AND 4);
III
IF THE ORIGINAL COPY OF THE TCT WAS LOST/MISSING IN THE
FILES OF THE REGISTER OF DEEDS, PETITIONER SHOULD HAVE
FILED A PETITION FOR RECONSTITUTION OF THE TITLE;
IV
PETITIONER’S INACTION FOR 21 YEARS TO ENFORCE HIS RIGHTS
ON THE DEEDS (EXHS. 2 AND 4) MADE RESPONDENTS BELIVE
THAT HE HAD ABANDONED HIS RIGHTS ON THE PROPERTY; and,
V
LACHES HAD OPERATED NOTWITHSTANDING THAT PETITIONER
WROTE THE REGISTER OF DEEDS OF PASAY CITY (EXH. 8) AND
THE LATTER REPLIED THAT REGISTRATION COULD NOT BE
EFFECTED BECAUSE THE TITLE WAS MISSING (EXH. 9).25
The issue in the instant case is whether or not petitioner’s action is barred
by prescription and laches.
The Court of Appeals ruled that petitioner’s cause of action is founded on
the deed of absolute sale allegedly executed by respondents’
predecessor-in-interest on August 28, 1972, which purportedly conveyed
the disputed lot to Eusebio Leonardo Roxas, and the deed of sale dated
September 29, 1972, whereby the latter sold the same lot to petitioner.
Being an action based on written contracts, petitioner’s complaint falls
under Article 114426 of the Civil Code, which provides that an action upon
a written contract shall prescribe in ten years from the time the right of
action accrued. Since petitioner brought the instant case only on
September 6, 1993, or 21 years from the time his supposed right of action
accrued on September 29, 1972, i.e., the date of execution of the contract
conveying to him the questioned lot, his action was clearly barred by the
statute of limitations.
Petitioner, on the other hand, contends that the applicable provision is
Article 114127 and not 1144 of the Civil Code because his action is one for
recovery of possession of real property which prescribes in thirty years.
The contention is without merit. Petitioner’s action is actually an action for
specific performance, i.e., to enforce the deed of absolute sale allegedly
executed in his favor. It is a fundamental principle that ownership does not
pass by mere stipulation but by delivery. The delivery of a thing constitutes
a necessary and indispensable requisite for the purpose of acquiring the
ownership of the same by virtue of a contract.28 Under Article 1498 of the
Civil Code, when the sale is made through a public instrument, the
execution thereof shall be equivalent to the delivery of the thing which is
the object of the contract, if from the deed the contrary does not appear or
cannot clearly be inferred. Thus, the execution of the contract is only a
presumptive, not conclusive delivery which can be rebutted by evidence to
the contrary, as when there is failure on the part of the vendee to take
material possession of the land subject of the sale in the concept of a
purchaser-owner.29
In the case at bar, it is not disputed that the lot in question was never
delivered to petitioner notwithstanding the alleged execution of a deed of
absolute sale. From 1972 to 1993, petitioner neither had, nor demanded,
material possession of the disputed lot. It was the respondents who have
been in control and possession thereof in the concept of owners since
1938 up to the present. It follows that ownership of the lot was never
transferred to petitioner. Hence, he can not claim that the instant case is
an accion reivindicatoria or an action to recover ownership and full
possession of the property which, in the first place, never came into his
possession for lack of the requisite delivery. Thus, in Danguilan v.
Intermediate Appellate Court,30 where the requisite delivery was not
effected, the Court held that:
Since in this jurisdiction it is a fundamental and elementary principle that
ownership does not pass by mere stipulation but only by delivery (Civil
Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the
execution of a public document does not constitute sufficient delivery
where the property involved is in the actual and adverse possession of
third persons (Addison v. Felix, 38 Phil. 404; Masallo v. Cesar, 39 Phil.
134), it becomes incontestable that even if included in the contract, the
ownership of the property in dispute did not pass... Not having become the
owner for lack of delivery, [one] cannot presume to recover the property
from its present possessors. [The] action, therefore, is not one of
revindicacion, but one against [the] vendor for specific performance of the
sale ...
Clearly, the case filed by petitioner was an action for specific performance
of a written contract of sale which, pursuant to Article 1144 of the Civil
Code, prescribes in 10 years from the accrual of the right of action. In a
contract of sale, there is a reciprocal obligation to pay the purchase price
and the corresponding delivery of the thing sold, which obligations give
rise to a right of action in case of breach.31 Here, petitioner’s right of action
for specific performance or rescission arose when delivery of the thing
sold was not effected on September 29, 1972, despite the payment of the
purchase price. Hence, from 1972 to 1993, when petitioner filed the
instant case, 21 years had elapsed barring the institution of petitioner’s
action which is definitely beyond the 10 year prescriptive period.
Petitioner’s claim that the prescriptive period was tolled when he
registered his adverse claim with the Register of Deeds is untenable.
In Garbin v. Court of Appeals, et al.,32 wherein an action for annulment of
a deed of sale was dismissed on the ground of prescription and laches,
the Court held that the registration of an adverse claim does not toll the
running of the prescriptive period, thus:
x x x the title of the defendant must be upheld for failure or the neglect of
the plaintiffs for an unreasonable and unexplained length of time of more
than fifteen (15) years since they registered their adverse claim, or for a
period of more than three (3) decades since the execution of the deed of
sale in their favor upon which their adverse claim is based, to do that
which, by exercising diligence, could or should have been done earlier.
For it is this negligence or omission to assert a right within reasonable
time that is construed that plaintiffs had abandoned their right to claim
ownership under the deed of sale, or declined to assert it. Thus, when a
person slept on his rights for 28 years from the time of the transaction,
before filing the action, amounts to laches which cannot be excused even
by ignorance resulting from inexcusable negligence (Vda. de Lima v. Tiu,
52 SCRA 516 [1970]).
In the same vein, the annotation on May 20, 1993 of the November 13,
1972 affidavit of adverse claim on TCT No. 2355 (34515) afforded no
protection to petitioner for the same reason that said belated assertion of
his alleged right over the property is barred by prescription and laches.
Moreover, the affidavit of adverse claim registered by petitioner in 1972
was ineffective. The law enforced at the time petitioner filed an adverse
claim was Section 110, of Act 496,33 also known as the Land Registration
Act, (now Section 7034 of P.D. No. 1529, or the Property Registration
Decree35), which stated:
Sec. 110. Whoever claims any part or interest in registered land 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.
The statement shall be signed and sworn to, and shall state the adverse
claimant's residence and designate a place at which all notices may be
served upon him. This statement shall be entitled to registration as an
adverse claim, and the court, upon a petition of any party in interest, shall
grant a speedy hearing upon the question of the validity of such adverse
claim and shall enter such decree therein as justice and equity may
require. If the claim is adjudged to be invalid, the registration shall be
cancelled. If in any case the court after notice and hearing shall find that a
claim thus registered was frivolous or vexatious, it may tax the adverse
claimant double or treble costs in its discretion.
In Junio v. De los Santos, et al.,36 an action for cancellation of an adverse
claim, the Court ruled that the procedure for registration of voluntary
instruments, like a deed of sale, is laid down in Section 5737 of Act 496.
But where the vendor refused to deliver to the vendee the owner’s
duplicate certificate of title, which title must be presented in order that the
deed of conveyance may be registered and the corresponding transfer
certificate of title may be issued,38 the vendee may file with the Register of
Deeds an adverse claim under Section 110 of Act No. 496. For an
adverse claim to be valid, it must be shown that a demand was made on
the vendor and that the latter refused to surrender the owner’s duplicate
certificate of title.39
In instant case, it was not shown that Mariano Torres y Chavarria, the
registered owner of the disputed lot, refused to surrender the owner’s
duplicate certificate of title, nor that petitioner demanded the surrender
thereof. In the affidavit of adverse claim registered by petitioner he merely
stated: "9. That in the meantime the herein (VENDEE) LEOPOLDO C.
LEONARDO has no means to get or secure the aforementioned Owner[’]s
Duplicate Copy of Title No. 2355 (34515) Pasay City Registry Office, from
the said Parties, he (Leopoldo C. Leonardo) hereby requests the Register
of Deeds of Pasay City to annotate whatever rights and interest on the
ORIGINAL CERTIFICATE OF TITLE No. 2355 (34515), Pasay Registry
Office, in the name of MARIANO C. TORRES as a Notice of Adverse
Claim(s) in favor of LEOPOLDO C. LEONARDO to any third party/ies;"
For lack of the requisite unjustified refusal of the registered owner to
surrender the owner’s duplicate certificate of title, the affidavit of adverse
claim registered by petitioner is not valid.

Likewise, there is no merit in petitioner's assertion that the prescriptive

period should commence to run only on May 18, 1993 when the original
copy of Transfer Certificate of Title No. 2355 (34515) was retrieved by the
Register of Deeds. The loss of the original title will not prevent petitioner’s
pursuit to enforce his right. Otherwise stated, the recovery of the original
title or the reconstitution thereof is not the only means by which petitioner
could protect his right. Under Article 1155 of the Civil Code - "[t]he
prescription of actions is interrupted when they are filed in court, when
there is a written extrajudicial demand by the creditors, and when there is
any written acknowledgement of the debt by the debtor." Petitioner
therefore may pursue either judicial or extrajudicial means manifesting his
interest in the questioned property in order to interrupt the prescriptive
period.

Certainly, petitioner’s action filed on September 6, 1993 is barred by the

10 year prescriptive period from the accrual of his alleged right of action
on September 29, 1972. In the same vein, said action is barred by laches
having allowed 21 years to lapse before enforcing his alleged right.
Laches is defined as failure or neglect for an unreasonable and
unexplained length of time, to do that which, by exercising due diligence
could or should have been done earlier. It is negligence or omission to
assert a right within a reasonable time, warranting presumption that the
party entitled to assert it has abandoned it or has declined to assert
it.40 Tempus enim modus tollendi obligationes et actiones, quia tempus
currit contra desides et sui juris contemptores – For time is a means of
dissipating obligations and actions, because time runs against the slothful
and careless of their own rights.41

WHEREFORE, in view of all the foregoing, the instant petition is DENIED.

The November 26, 1999 decision and the May 19, 2000 resolution of the
Court of Appeals in CA-G.R. CV No. 52932, which sustained the February
1, 1996 order of the Regional Trial Court of Pasay City, Branch III,
dismissing petitioner’s complaint in Civil Case No. 93-10282 on the ground
of prescription and laches, is AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 102377 July 5, 1996
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners,
vs.
THE COURT OF APPEALS, DOMINGO A. PILARES, SHERIFF
ROBERTO GARCIA OF QUEZON CITY and REGISTER OF DEEDS OF
MARIKINA, respondents.
TORRES, JR., J.:p
A word or group of words conveys intentions. When used truncatedly, its
meaning disappears and breeds conflict. Thus, it is written -- "By thy
words shalt thou be justified, and by thy words shalt thou be condemned."
(Matthew, 12:37)
Construing the new words of a statute separately is the raison d'etre of
this appeal.
Essentially, the case before us is 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 H. Sajonas,
who purchased the parcel of land from the Uychocdes, and are now the
petitioners in this case.
The facts are not disputed, and are hereby reproduced as follows:
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 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 Domingo Pilares
(defendant-appellant) filed Civil Case No. Q-28850
for 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 move d 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 where the civil case was
pending. 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 and the
same was annotated at the back of TCT No. 79073
as Entry No. 123283.
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 10, 1986, the Sajonas spouses
demanded the cancellation of the notice of levy on
execution upon defendant-appellant Pilares, through
a letter to their lawyer, Atty. Melchor Flores. Despite
said demand, defendant-appellant Pilares refused to
cause the cancellation of said annotation. In view
thereof, plaintiffs-appellees filed this complaint dated
January 11, 1986 on February 5, 1986.1
The Sajonases filed their complaint2 in the Regional Trial Court of Rizal,
Branch 71, against Domingo Pilares, the judgment creditor of the
Uychocdes. The relevant portion of the complaint alleges:
7. 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;
8. 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;
9. That a demand was made by the plaintiffs upon
the defendant Domingo A. Pilares, to cause the
cancellation of the said notice of levy but the latter,
without justifiable reason and with the sole purpose
of harassing and embarrassing the plaintiffs ignored
and refused plaintiffs' demand;
10. That in view of the neglect, failure and refusal of
the defendant to cause the cancellation of the notice
of levy on execution, the plaintiffs were compelled to
litigate and engage the services of the undersigned
counsel, to protect their rights and interests, for
which they agreed to pay attorney's fees in the
amount of P10,000 and appearance fees of P500
per day in court.3
Pilares filed his answer with compulsory counterclaim4 on March 8, 1986,
raising special and affirmative defenses, the relevant portions of which are
as follows:
10. Plaintiff has no cause of action against herein
defendants;
11. 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;
12 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 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;
13. 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 (sic) and without any legal
force and effect because it was done in fraud of a
judgment creditor, the defendant Pilares.5
Pilares likewise sought moral and exemplary damages in a counterclaim
against the Sajonas spouses. The parties appeared at pre-trial
proceedings on January 21, 1987,6 after which, trial on the merits ensued.
The trial court rendered its decision on February 15, 1989.7 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 a quo stated, thus:
After going over the evidence presented by the
parties, 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 of claim was annotated
on the same title by the plaintiffs who earlier bought
said property from the Uychocdes.
It is a well settled rule in this jurisdiction (Guidote vs.
Maravilla, 48 Phil. 442) 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.
xxx xxx xxx
On the issue of whether or not plaintiffs 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.8 (Cai vs. Henson,
51 Phil 606)
xxx xxx xxx
In view of the foregoing, the Court renders judgment
in favor of the plaintiffs and against the defendant
Pilares, as follows:
1. Ordering the cancellation of the Notice of Levy on
Execution annotated on Transfer Certificate of Title
No. N-109417.
2. Ordering said defendant to pay the amount of
P5,000 as attorney's fees.
3. Dismissing the Counterclaim interposed by said
defendant.
Said defendant is likewise ordered to pay the costs.
Dissatisfied, Pilares appealed to the Court of Appeals", 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, thus:
WHEREFORE, the decision of the lower court dated
February 15, 1989 is reversed and set aside and
this complaint is dismissed.
Costs against the plaintiffs-appellees. 10
The Sajonas couple are now before us, on a Petition for Review
on Certiorari, 11 praying inter alia to set aside the Court of Appeals'
decision, and to reinstate that of the Regional Trial Court
Private respondent filed his Comment 12 on March 5, 1992, after which,
the parties were ordered to file their respective Memoranda. Private
respondent complied thereto on April 27, 1994 13, while petitioners were
able to submit their Memorandum on September 29, 1992. 14
Petitioner assigns the following as errors of the appellate court, to wit:
I
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.
II
THE LOWER COURT ERRED IN INTERPRETING
SECTION 70 OF P.D. NO. 1529 IN SUCH WISE
ON THE GROUND THAT IT VIOLATES
PETITIONERS' SUBSTANTIAL RIGHT TO DUE
PROCESS.
Primarily, we are being asked to ascertain who among the parties in suit
has a better right over the property in question. The petitioners derive their
claim from the right of ownership arising from a perfected contract of
absolute sale between them and the registered owners of the property,
such right being attested to by the notice of adverse claim 15 annotated on
TCT No. N-79073 as early as August 27, 1984. Private respondent on the
other hand, claims the right to levy on the property, and have it sold on
execution to satisfy his judgment credit, arising from Civil Case No. Q-
28850 16 against the Uychocdes, from whose title, petitioners derived their
own.
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. 17
The registration of an adverse claim is expressly recognized under
Section 70 of P.D. No. 1529. *
Noting the changes made in the terminology of the provisions of the law,
private respondent interpreted this to mean that a Notice of Adverse Claim
remains effective only for a period of 30 days from its annotation, and
does not automatically lose its force afterwards. Private respondent further
maintains that the notice of adverse claim was annotated on August 27,
1984, hence, it will be effective only up to September 26, 1984, after which
it will no longer have any binding force and effect pursuant to Section 70
of P.D. No. 1529. Thus, the sale in favor of the petitioners by the
Uychocdes was made in order to defraud their creditor (Pilares), as the
same was executed subsequent to their having defaulted in the payment
of their obligation based on a compromise
agreement. 18
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. The
provision of this Decree is clear and specific.
xxx xxx xxx
It should be noted that the adverse claim provision
in Section 110 of the Land Registration Act (Act
496) does not provide for a period of effectivity of
the annotation of an adverse claim. P.D. No. 1529,
however, now specifically provides for only 30 days.
If the intention of the law was for the adverse claim
to remain effective until cancelled by petition of the
interested party, then the aforecited provision in
P.D. No. 1529 stating the period of effectivity would
not have been inserted in the law.
Since the adverse claim was annotated On August
27, 1984, it was effective only until September 26,
1984. Hence, when the defendant sheriff annotated
the notice of levy on execution on February 12,
1985, said adverse claim was already ineffective. It
cannot be said that actual or prior knowledge of the
existence of the adverse claim on the Uychocdes'
title is equivalent to registration inasmuch as the
adverse claim was already ineffective when the
notice of levy on execution was annotated. Thus,
the act of defendant sheriff in annotating the notice
of levy on execution was proper and justified.
The appellate court relied on the rule of statutory construction that Section
70 is specific and unambiguous and hence, needs no interpretation nor
construction. 19 Perforce, the appellate court stated, the provision was
clear enough to warrant immediate enforcement, and no interpretation
was needed to give it force and effect. A fortiori, an adverse claim shall be
effective only for a period of thirty (30) days from the date of its
registration, after which it shall be without force and effect. Continuing, the
court further stated;
. . . clearly, the issue now has been reduced to one
of preference -- which should be preferred between
the notice of levy on execution and the deed of
absolute sate. The Deed of Absolute Sale was
executed on September 4, 1984, but was registered
only on August 28, 1985, while the notice of levy on
execution was annotated six (6) months prior to the
registration of the sale on February 12, 1985.
In the case of Landig vs. U.S. Commercial Co., 89
Phil. 638 Commere it was held that where a sale is
recorded later than an attachment, although the
former is of an earlier date, the sale must give way
to the attachment on the ground that the act of
registration is the operative act to affect the land. A
similar ruling was restated in Campillo vs. Court of
Appeals (129 SCRA 513).
xxx xxx xxx
The reason for these rulings may be found in
Section 51 of P.D. 1529, otherwise known as the
Property Registration Decree, which provides as
follows:
Sec. 1. Conveyance and other
dealings by the registered
owner. -- An owner of
registered land may convey,
mortgage, lease, charge,
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 Deeds to
make of registration.
The act of registration shall be the operative act to
convey or affect the land in so far as third persons
are concerned and in all cases under the Decree,
the registration shall be made in the office of the
Register of Deeds for the province or city where the
land lies. (Emphasis supplied by the lower court.)
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. 20
Although we have relied on the foregoing rule, in many cases coming
before us, the same, however, does not fit in the case at bar. While it is
the act of registration which is the operative act which conveys or affects
the land insofar as third persons are concerned, it is likewise true, that the
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. 21 While it is true that under the provisions of the
Property Registration Decree, deeds of conveyance of property registered
under the system, or any interest therein only take effect as a conveyance
to bind the land upon its registration, and that a purchaser is not required
to explore further than what the Torrens title, upon its face, indicates in
quest for any hidden defect or inchoate right that may subsequently defeat
his right thereto, nonetheless, this rule is not absolute. Thus, one who
buys from the registered owner need not have to look behind the
certificate of title, he is, nevertheless, 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.22
In PNB vs. Court of Appeals, we held that "the subsequent sale of the
property to the De Castro spouses cannot prevail over the adverse claim
of Perez, which was inscribed on the bank' s certificate of title on October
6, 1958. That should have put said spouses on notice, and they can claim
no better legal right over and above that of Perez. The TCT issued in the
spouses' names on July, 1959 also carried the said annotation of adverse
claim. Consequently, they are not entitled to any interest on the price they
paid for the property. 23
Then again, in Gardner vs. Court of Appeals, we said that "the statement
of respondent court in its resolution of reversal that 'until the validity of an
adverse claim is determined judicially, it cannot be considered a flaw in
the vendor's title' contradicts the very object of adverse claims. As stated
earlier, the annotation of an adverse claim is a measure designed to
protect the interest of a person over a piece of real property, and serves
as a notice and warning to third parties dealing with said property that
someone is claiming an interest on the same or has a better right than the
registered owner thereof. A subsequent sale cannot prevail over the
adverse claim which was previously annotated in the certificate of title
over the property. 24
The question may be posed, was the adverse claim inscribed in the
Transfer Certificate of Title No. N-109417 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?
This is a decisive factor in the resolution of this instant case.
If the adverse claim was still in effect, then respondents are charged with
knowledge of pre-existing interest over the subject property, and thus,
petitioners are entitled to the cancellation of the notice of levy attached to
the certificate of title.
For a definitive answer to this query, we refer to the law itself. 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.
The statement shall be signed and sworn to, and shall state the
adverse claimant's residence, and designate a place at which
all notices may be served upon him. The statement shall be
entitled to registration as an adverse claim, and the court, upon
a petition of any party in interest, shall grant a speedy hearing
upon the question of the validity of such adverse claim and
shall enter such decree therein as justice and equity may
require. If the claim is adjudged to be invalid, the registration
shall be cancelled. If in any case, the court after notice and
hearing shall find that a claim thus registered was frivolous or
vexatious, it may tax the adverse claimant double or treble the
costs in its discretion."
The validity of the above-mentioned rules on adverse claims has to be
reexamined in the light of the changes introduced by P.D. 1529, which
provides:
Sec . 70 Adverse Claim -- Whoever claims any part or interest
in registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no
other provision is made in this decree for registering the same,
make a statement in writing setting forth fully his alleged right
or interest, and how or under whom acquired, a reference to
the number of certificate of title of the registered owner, the
name of the registered owner, and a description of the land in
which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimant's residence, and a place at which all notices
may be served upon him. This statement shall be entitled to
registration as an adverse claim on the certificate of title. The
adverse claim shall be effective for a period of thirty days from
the date of registration. 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: Provided,
however, that after cancellation, no second adverse claim
based on the same ground shall be registered by the same
claimant.
Before the lapse of thirty days aforesaid, any party in interest
may file a petition in the Court of First Instance where the land
is situated for the cancellation the adverse claim, and the court
shall grant a speedy hearing upon the question of the validity of
such adverse claim, and shall render judgment as may be just
and equitable. If the adverse claim is adjudged to be invalid,
the registration thereof shall be ordered cancelled. If, in any
case, the court, after notice and hearing shall find that the
adverse claim thus registered was frivolous, it may fine the
claimant in an amount not less than one thousand pesos, nor
more than five thousand pesos, in its discretion. 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. (Emphasis ours).
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. 25 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." 26 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.
A statute's clauses and phrases must not be taken separately, but in its
relation to the statute's totality. Each statute must, in fact, be construed as
to harmonize it with the pre-existing body of laws. Unless clearly
repugnant, provisions of statutes must be reconciled. The printed pages of
the published Act, its history, origin, and its purposes may be examined by
the courts in their construction. 27 An eminent authority on the subject
matter states the rule candidly:
A statute is passed as a whole and not in parts sections, and is
animated by one general purpose and intent. Consequently,
each part or section should be construed in connection with
every other part section so as to produce a harmonious whole.
It is not proper to confine its intention to the one section
construed. It is always an unsafe way of construing a statute or
contract to divide it by a process of etymological dissection, into
separate words, and then apply to each, thus separated from
the context, some particular meaning to be attached to any
word or phrase usually to be ascertained from the as context. 28
Construing the provision as a whole would reconcile the apparent
inconsistency between the portions of the law such that the provision on
cancellation of adverse claim by verified petition would serve to qualify the
provision on the effectivity period. 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. 29
It should be noted that the law employs the phrase "may be cancelled",
which obviously indicates, as inherent in its decision making power, that
the court may or not order the cancellation of an adverse claim,
nothwitstanding such provision limiting the effectivity of an adverse claim
for thirty days from the date of registration. The court cannot be bound by
such period as it would be inconsistent with the very authority vested in it.
A fortiori, 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. 30
To interpret the effectivity period of the adverse claim as absolute and
without qualification limited to thirty days defeats the very purpose for
which the statute provides for the remedy of an inscription of adverse
claim, as the 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 is not otherwise provided for by the
Land Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves as a warning to third parties dealing with
said property that someone is claiming an interest or the same or a better
right than the registered owner thereof. 31
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. This is in line with the provision immediately
following:
Provided, however, that after cancellation, no second adverse
claim shall be registered by the same claimant.
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 a justice and equity may warrant. And it is only when
such claim is found unmeritorious that the registration of the adverse claim
may be cancelled, thereby protecting the interest of the adverse claimant
and giving notice and warning to third parties". 32
In sum, the disputed inscription of an 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 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. This can be
deduced from the pertinent provision of the Rules of Court, to wit:
Sec. 16. Effect of levy on execution as to third persons -- The
levy on execution shall create a lien in favor of the judgment
creditor over the right, title and interest of the judgment debtor
in such property at the time of the levy, subject to liens or
encumbrances then existing. (Emphasis supplied)
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.
As lucidly observed by the trial court in the challenged decision:
True, the foregoing section provides that an adverse claim shall
be effective for a period of thirty days from the date of
registration. Does this mean however, that the plaintiffs thereby
lost their right over the property in question? Stated in another,
did the lapse of the thirty day period automatically nullify the
contract to sell between the plaintiffs and the Uychocdes
thereby depriving the former of their vested right over the
property?
It is respectfully submitted that it did not. 33
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 on April 21, 1988". 34
ATTY. REYES.
Q Madam Witness, when Engr. Uychocde and his
wife offered to you and your husband the property
subject matter of this case, they showed you the
owner's transfer certificate, is it not?
A Yes, sir.
Q That was shown to you the very first time that this
lot was offered to you for sale?
A Yes.
 Q After you were shown a copy of the title and after
you were informed that they are desirous in selling
the same, did you and your husband decide to buy
the same?

A No, we did not decide right after seeing the title.

Of course, we visited. . .

Q No, you just answer my question. You did not

immediately decide?

A Yes.

Q When did you finally decide to buy the same?

A After seeing the site and after verifying from the

Register of Deeds in Marikina that it is free from
encumbrances, that was the time we decided.

Q How soon after you were offered this lot did you
verify the exact location and the genuineness of the
title, as soon after this was offered to you?

A I think it' s one week after they were offered. 35

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.36 Good faith consists in an honest intention to
abstain from taking an unconscientious advantage of another, 3 7 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.

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. 38

ACCORDINGLY, the assailed decision of the respondent Court of Appeals

dated October 17, 1991 is hereby REVERSED and SET ASIDE. The
decision of the Regional Trial Court dated February 15, 1989 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.

Costs against private respondent.

SO ORDERED.
 On January 8, 1990, petitioners filed a Petition to Remove
FIRST DIVISION Cloud on or Quiet Title to Real Property asserting ownership of the
disputed property.
SPS. JESUS CHING AND LEE G.R. No. 156076 On May 11, 1993, the RTC rendered judgment in favor of
POE TIN, Petitioners, petitioners upholding the latters superior right over the disputed
property in view of the registration of the Affidavit of Adverse Claim
Present: prior to the Certificate of Sale annotated in favor of respondents.
Dispositively the decision reads:
- versus - PUNO, C.J., Chairperson,
CORONA, WHEREFORE, premises, the
CARPIO MORALES*, above-entitled petition is granted for being
AZCUNA, and preponderantly meritorious. Judgment is
LEONARDO-DE hereby rendered ordering:
SPS. ADOLFO & ARSENIA CASTRO, JJ.
ENRILE, Respondents. 1) The Register of Deeds of Las
Pias, Metro Manila to cancel
Promulgated: all the annotations of
encumbrances in favor of
September 17, 2008 defendants [respondents] in
Transfer Certificate of Title
No. 83618 issued by the
Register of Deeds of Pasay
City, Metro Manila, District IV;
2) Defendants [respondents] to
pay plaintiffs [petitioners] in
the sum of P 10,000.00 as
compensatory damages by
x------------------------------------------------------------------------------------------x way of litigation expenses;
3) To pay to plaintiffs
[petitioners] the sum
DECISION of P 10,000.00 as attorneys
fees; and,
LEONARDO-DE CASTRO, J.: 4) To pay the cost of the
proceedings.

Assailed in the instant petition for review on certiorari are SO ORDERED.

the Decision[1] of the Court of Appeals (CA) dated August 29, 2002 in
CA-G R. CV No. 42985 and the Resolution[2] dated November 21,
2002 denying petitioners motion for reconsideration.
The assailed CA decision reversed the decision of the
Regional Trial Court (RTC) of Makati City, Branch 135, in Civil Case
No. 90-064, an action for quieting of title thereat commenced by
petitioner spouses Jesus Ching and Lee Poe Tin against respondent
spouses Adolfo and Arsenia Enrile.
The antecedent facts follow.
On September 5, 1985, petitioners purchased from a
certain Raymunda La Fuente a 370-square meter lot located at Barrio
Tungtong, Las Pias and covered by TCT No. 83618. La Fuente
delivered to petitioners a duly notarized Deed of Absolute Sale[3] with
the Owners Duplicate Certificate of Title and thereafter, petitioners
took physical possession of the subject property.
In time, respondents appealed to the CA, principally
arguing that the RTC committed reversible error in ruling that
petitioners had a better right over the disputed property. Respondents
theorized that the prior conveyance of the disputed property made by
La Fuente to petitioners being a voluntary dealing with a registered
land, mere registration of their adverse claim was insufficient. To
respondents, in order to have petitioners interest protected, they
should have registered the Deed of Absolute Sale with the Register of
Deeds pursuant to Section 51 of PD 1529 and not merely register an
adverse claim under Section 70 of the same law. Citing the second
paragraph of Section 70 which provides that an adverse claim shall be
effective for a period of thirty days from the date of
registration, respondents insisted that the annotated Adverse Claim of
petitioners had already expired, hence, it offered no protection when
respondents acquired the disputed property through execution sale.

For reasons known only to petitioners, the conveyance
was not registered in the Register of Deeds as prescribed by Section
51 of PD 1529[4]. Instead, on November 20, 1986, petitioners executed
an Affidavit of Adverse Claim which was recorded and annotated at
the back of TCT No. 83618 reflected in the Memorandum of
Encumbrances under Entry No. 86-62262.[5]
On August 29, 2002, the CA rendered the herein
challenged decision reversing that of the RTC. Even as the CA viewed
the prior sale of the disputed lot in favor of petitioners as perfected and
consummated, it nonetheless upheld respondents preferential right
over the disputed property. Finding merit in respondents arguments,
the CA ruled:

In the meantime, petitioners peacefully and continuously This Court, also believes that there
possessed the subject property. is truth in defendants-appellants assertion that
while the sale is perfected and consummated,
On August 19, 1988 ─ three years after they purchased plaintiffs-appellees failed to diligently protect
the disputed property, petitioners received a Notice of Levy on their interests by failing to register the
Attachment and Writ of Execution issued by the Regional Trial Court conveyance or transaction in the office of
(RTC) of Pasig in favor of respondents, in Civil Case No. 54617 Register of Deeds. An owner of a registered
entitled Sps. Adolfo Enrile and Arsenia Enrile v. Raymunda La Fuente. land is vested by law with rights and obligations
and thus exercises all attributes of
The Notice of Levy on Attachment was recorded at the ownership. These attributes include among
dorsal portion of TCT No. 83618 under Entry No. 3433-2 while the Writ others the right to dispose the real property
of Execution was inscribed under Entry No. 3434-2. Also inscribed in itself. The owner of the land may convey,
the TCT is the Certificate of Sale dated January 26, 1989 covering the mortgage, lease or otherwise deal with the
disputed property in favor of respondents. same in accordance with existing laws. He may
use such forms of deeds, mortgages, leases or
other voluntary instrument as are sufficient in
law. However, as clearly provided by Section
51 of Presidential Decree 1529, 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, until the same
has been registered in the office of the Register
of Deeds. It shall operate only as a contract
between the parties and as evidence of
authority to the Register of Deeds to effect
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 of the province or city where the land
lies. Unless and until the subject transaction
has been filed or registered in the office of the
Register of Deeds, the transaction shall only be
binding on the parties to the contract but not on
the third person. The instrument is not thereby
rendered void by failure to register. Section 51
of PD 1529 states:
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.
Laying the blame on petitioners, the CA added:
The law provides protection to third
person, who believing in good faith and relying
on the sweet representations of some evil
minded persons, may be unjustifiably inveigled
to enter into a contract or transaction not
knowing that the subject real property has been
encumbered or sold. It is the duty of the buyer
or vendee to register the transaction before the
Register of Deeds of the province or city where
the property lies. The registration is intended to
inform any minded individual that the property
has been subjected to a prior transaction and
that entering into any further contract involving
the same property shall be at his own risk. In
the event that any third person was bona
fide tricked to enter into any transaction
involving the same property because the
transferee or vendee failed to register the same
as required by law, the latters interests should
be subordinated to that of the third
party. Axiomatic is the rule in this jurisdiction
that when loss or damage was caused to two
individuals who both acted in good faith but
one is negligent, the loss or damage shall fall
upon the one who acted negligently.
Citing a myriad of jurisprudence[6], the CA declared that
respondents, as attaching creditors who registered the order of
attachment and the sale of the property to them as the highest bidders,
acquired a valid title to the disputed property as against petitioners
who had previously bought the same property from the registered
owner but failed to register their deed of sale.
The CA further declared respondents as purchasers in good faith. On
the premise that petitioners filing of the Affidavit of Adverse Claim was
procedurally flawed and that the annotated adverse claim had already
prescribed on December 20, 1986 after the lapse of 30 days from its
registration which was November 20, 1986, the CA ruled that it cannot
be considered sufficient notice to third person like the respondents
who were not aware of the sale of the disputed lot to petitioners prior
to the levy on attachment.
As stated at the threshold hereof, the CA, in its
decision[7] of August 29, 2002, reversed and set aside that of the RTC,
thus:
WHEREFORE, in view of the
foregoing, the Decision dated May 11, 1993 of
the Regional Trial Court, National Capital
Judicial Region, Branch 135, Makati City in
Civil Case No. 90-064 is hereby REVERSED.
The Register of Deeds of Las Pias,
Metro Manila is hereby mandated not to cancel
any annotations of encumbrances in favor of
defendants-appellants in Transfer Certificate of
Title No. 83618 issued by the Register of
Deeds of Pasay City, Metro Manila, Dist. IV.
Who among the parties has a
preferential right over the disputed property.
SO ORDERED.
Their motion for reconsideration having been denied by the
CA in its challenged Resolution of November 21, 2002, petitioners are
now before this Court, faulting the CA as follows:
WITH DUE RESPECT, THE COURT A QUO
GRAVELY ERRED AND ABUSED ITS
DISCRETION WHEN IT RENDERED
SUBJECT DECISION AND RESOLUTION IN A
WAY PROBABLY NOT IN ACCORD WITH
LAW OR RULES WITH THE APPLICABLE
DECISIONS OF THE SUPREME COURT;
Specifically, the Court a quo erred;
a. When it held that the levy on
attachment LATER annotated
shall prevail over the Adverse
Claim EARLIER annotated at the
back of the title by the mere
lapse of 30 days and even
without any petition in court for
 its cancellation;
b. When it did not dismiss the
appeal considering that the
question raised were questions
of law and NO question of fact.[8]
The petition is impressed with merit.
At the outset, the Court finds that the CA committed
reversible error when it ruled that the annotated adverse claim had
already prescribed by the mere lapse of 30 days from its
registration. The issue is no longer of first impression. In the 1996 case
of Sajonas v. Court of Appeals,[9] we explained that a notice of adverse
claim remains valid even after the lapse of the 30-day period provided
by Section 70 of PD 1529. Section 70 provides:
Whoever claims any part or interest
in registered land adverse to the registered
owner, arising subsequent to the date of the
original registration, may, if no other provision
is made in this Decree for registering the same,
make a statement in writing, setting forth fully
his alleged right or interest, and how or under
whom acquired, a reference to the number of
the certificate of title of the registered owner,
and a description of the land in which the right
or interest is claimed.
The statement shall be signed and
sworn to, and shall state the adverse claimant's
residence, and a place at which all notices may
be served upon him. This statement shall be
entitled to registration as an adverse claim on
the certificate of title. The adverse claim shall
be effective for a period of thirty days from the
date of registration. 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. Provided,
however that after cancellation, no second
adverse claim based on the same ground shall
be registered by the same claimant.
In the same case, we held that for as long as there is yet
no petition for its cancellation, the notice of adverse claim remains
subsisting: Thus:
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 the
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.[10]
In a petition for cancellation of adverse claim, a hearing
must first be conducted. The hearing will afford the parties an
opportunity to prove the propriety or impropriety of the adverse
claim.[11]
Now, as we see it, the recourse will either rise or fall on the
decisive question of whether or not respondents were purchasers in
good faith when they acquired the disputed lot despite the annotated
adverse claim on their title.
We rule and so hold that they were not.
The Court has invariably ruled that in case of conflict
between a vendee and an attaching creditor, an attaching creditor who
registers the order of attachment and the sale of the property to him as
the highest bidder acquires a valid title to the property as against a
vendee who had previously bought the same property from the same
owner but who failed to register his deed of sale. This is because
registration is the operative act that binds or affects the land insofar as
third persons are concerned. It is upon registration that there is notice
to the whole world. But where a party has knowledge of a prior existing
interest, as here, which is unregistered at the time he acquired a right
to the same land, his knowledge of that prior unregistered interest has
the effect of registration as to him.[12] Knowledge of an unregistered
sale is equivalent to registration.[13]
The general rule is that a person dealing with registered
land is not required to go behind the register to determine the condition
of the property. In that case, such person is charged with notice of the
burden on the property which is noted on the face of the register or
certificate of title.[14]
Article 1544 of the Civil Code governs in cases of double
sale. It provides:
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.
An innocent purchaser for value or any equivalent phrase
shall be deemed to include, under the Torrens System, the innocent
lessee, mortgagee, and other encumbrancer for value.[15]
In Bautista v. Court of Appeals,[16] we held that where the
thing sold twice is an immovable, the one who acquires it and first
registers it in the Registry of Property, in good faith, shall be the
owner.
Who then can be considered a purchaser in
good faith?
In the early case of Leung Yee v. F.L. Strong
Machinery Co. and Williamson,[17] the Court explained
good faith in this wise:
One who purchases real estate with
knowledge of a defect or lack of title in his
vendor cannot claim that he has acquired title
thereto in good faith as against the true owner
of the land or of an interest therein; and the
same rule must be applied to one who has
knowledge of facts which should have put him
upon such inquiry and investigation as might
be necessary to acquaint him with the defects
in the title of his vendor.[18]
 Good faith, or the want of it, is capable of being us to rule that respondents were not purchasers in good faith and, as
ascertained only from the acts of one claiming its presence, for it is a such, could not acquire good title to the property as against the former
condition of the mind which can only be judged by actual or fancied transferee.
token or signs.[19]
It is beyond dispute that the property in question had
already been sold by La Fuente to petitioners on September 5,
1985. Petitioners immediately took possession thereof. When the
Notice of Levy on Attachment was recorded at the dorsal portion of WHEREFORE, the petition is GRANTED. The decision of
TCT No. 83618 and when the Writ of Execution and Certificate of Sale the Court of Appeals promulgated on August 29, 2002, in CA-G R. CV
were inscribed under Entry No. 3434-2 in favor of respondents, No. 42985, and the Resolution dated November 21, 2002 are hereby
on January 26, 1989, petitioners have been, since September 5, REVERSED and SET ASIDE. In lieu thereof, the decision of the
1985, in actual, physical, continuous and uninterrupted possession. Regional Trial Court, of Makati City Branch 135, dated May 11, 1993,
The law does not require a person dealing with the owner in Civil Case No. 90-064 is REVIVED and AFFIRMED in toto.
of registered land to go beyond the certificate of title as he may rely on
the notices of the encumbrances on the property annotated on the No costs.
certificate of title or absence of any annotation. Here, petitioners
adverse claim is annotated at the back of the title coupled with the fact SO ORDERED.
that they are in possession of the disputed property. To us, these
circumstances should have put respondents on guard and required
them to ascertain the property being offered to them has already been
sold to another to prevent injury to prior innocent buyers. A person
who deliberately ignores a significant fact which would create
suspicion in an otherwise reasonable man is not an innocent
purchaser for value. It is a well-settled rule that a purchaser cannot
close his eyes to facts which should put a reasonable man upon his
guard, and then claim that he acted in good faith under the belief that
there was no defect in the title of the vendor.[20]

As aptly observed by the RTC, regardless of the non-

registration of the Deed of Absolute Sale to petitioners, nor the 30-day
effectivity of the adverse claim under Section 70 of PD 1529,
respondents were constructively notified of petitioners prior purchase
of the disputed property. We quote with approval the RTCs
observation on this matter, thus:

xxx In derogation to defendants claim that they

have a better right over the questioned
property superior over that of the plaintiffs, the
Court has only to carefully examine the face of
TCT No. 83618 and its dorsal part on
Memorandum of Encumbrances for entries and
inscriptions in their chronological order of dates
of annotation of documents in the Office of the
Register of Deeds.On the title itself it is readily
perceived and palpable that Entry No. 86-
62262/T-83618 in reference to the Adverse
Claim executed by plaintiff Jesus Ching was
registered way ahead on November 20,
1986 compared to Entries Nos. 3433-2, 3434-2
and 736-3, respectively the Notice of Levy, Writ
of Execution and Certificate of Sale in favor of
spouses defendants Enrile which were duly
registered on August 19, 1988 (for the first two
documents) and on March 21, 1989 (for the
last document). Perforce, before the
registrations of the three documents purporting
to be the rights and interests of defendants in
the property in question, the defendants more
particularly and the whole world in general
were given constructive notice that Raymunda
La Fuente, the judgment debtor in Civil Case
No. 54617 of the Regional Trial Court of Pasig,
has no more interest and rights to the property
subject of litigation. Defendants should have at
the first instance been duly warned and notified
that the property involved in litigation subject to
attachment and levy, execution and sale from
actual registration of the defendants
documents referred herein.The annotation of
inscription to Entry No. 86-622/T-83618 is
obviously and indeed very clear indicating that
the plaintiffs registered adverse claim in
reference to the sale of the same property
sought by defendants to be levied on
attachment, final execution and sale came
ahead.[21]

Hence, the particular circumstances of this case constrain

 SECOND DIVISION
[G.R. No. 114732. August 1, 2000]
ESTRELLA TIONGCO YARED (now deceased) substituted by one of
her heirs, CARMEN MATILDE M. TIONGCO petitioner,
vs. HON. RICARDO M. ILARDE, Presiding Judge, Regional
Trial Court of Iloilo, Br. 26, JOSE B. TIONGCO and
ANTONIO G. DORONILA, JR., respondents.
DECISION
DE LEON, JR., J.:
Before us is a petition for certiorari under Rule 65 assailing the
Order dated March 17, 1994[1] of the Regional Trial Court of Iloilo City,
Branch 26, which reinstated an earlier order cancelling the notice
of lis pendens annotated on the back of Transfer Certificates of Title Nos.
T-92383 and T-5050, of the Registry of Deeds of Iloilo City covering Lots
3244 and 3246, respectively, located in Iloilo City.
The relevant facts are summarized as follows:
On October 17, 1990, petitioner Estrella Tiongco Yared filed an
amended complaint[2] before the Regional Trial Court, 6th Judicial Region,
Branch XXVI, against private respondents Jose B. Tiongco and Antonio
Doronila, Jr. Docketed as Civil Case No. 19408, the action was one for
"annulment of affidavit of adjudication, sales, transfer certificates of title,
reconveyance and damages.
In brief, the amended complaint alleged that respondent 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.
After respondent Jose B. Tiongco filed his answer, trial ensued
during which, on three separate occasions, he filed motions seeking the
cancellation of the notices of lis pendens.[4] All these motions were
denied.[5]
On December 14, 1993, the respondent judge issued a
Decision[6] 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[7]on December 17,
1993. As before, respondent Tiongco filed a motion for cancellation of the
notices of lis pendens[8] dated December 21, 1993; this was denied in an
Order dated January 10, 1994.[9] He filed a "Second Motion for
Reconsideration"[10] which was also denied in an Order dated January 26,
1994.[11] Displaying remarkable tenacity, respondent Tiongco filed a "Third
Motion for Reconsideration."[12] This time, however, his arguments proved
persuasive. In an Order[13]dated February 14, 1994, the respondent judge
ruled to wit:
In the light of the ruling laid down in Magdalena Homeowners
Association Inc. vs. Court of Appeals, 184 SCRA 325; 330 (1990),
cited in Vda. De Kilayko vs. Tengco, 207 SCRA 600; 614-615
(1992), that "the continuance or removal of a notice of lis pendens
is not contingent on the existence of a final judgment in the action
and ordinarily has no effect on the merits thereof so that the notices
of lis pendens in the case at bar may, on proper grounds, be
cancelled notwithstanding the non-finality of the judgment of this
Court brought about by plaintiff's appeal and considering the finding
of this Court that plaintiff's action had already prescribed, which
finding is based on the admitted fact that the questioned deed of
adjudication was registered way back of May 10, 1974 so that the
possibility of this finding being reversed is quite remote if not totally
nil and, considering further, the circumstances obtaining in this
case, among which are: (1) that the criminal complaint for perjury
filed by plaintiff against defendant Jose B. Tiongco based on the
same deed of adjudication had already been dismissed with finality
also on the ground of prescription; (2) that the occupants of the
property who were alleged as formerly paying rentals to herein
plaintiff, Estrella Tiongco Yared, had already recognized
defendant's ownership and had long stopped paying rentals to
plaintiff without the latter intervening, much less, contesting the
decision in Civil Case No. 15421 where defendant Jose B. Tiongco
was declared with finality as the true and lawful owner of Lots Nos.
3244 and 3246; and (3) that, if at all, the present claim of plaintiff
covers but a very small portion of subject lots consisting only a total
of about 64 square meters hence, it would be unfair to the
defendant who has torrens title covering the parcels of lands solely
in his name to have the same subjected to the harsh effect of such
a encumbrance; the Court, in view of all the foregoing
considerations and upon further review of the records, hereby
reconsiders its stand on the subject matter of lis pendens and so
holds that the continued annotation of subject notices of lis pendens
is intended to molest the defendant, Jose B. Tiongco, and is not
necessary to protect the rights of plaintiff as such rights, if any, are
now foreclosed by prescription.
This time, it was petitioner's turn to seek reconsideration.[14] On
March 4, 1994, the public respondent issued an Order[15] reversing himself
on the ground that (1) it had already lost jurisdiction over the case due to
the expiration of the last day to appeal of both parties, (2) the notice of
appeal has been approved, and (3) the records had been ordered
elevated to the Court of Appeals.
Private respondent Tiongco filed another motion for
reconsideration[16] against the Order dated March 4, 1994. On March 17,
1994, the respondent judge issued the order, subject of this petition, which
is quoted hereunder:
Considering that under Section 9, Rule 41 of the Rules of Court, although
appeal had already been perfected, the Court, prior to the transmittal of
the records to the appellate court, may issue orders for the protection and
preservation of the rights of the parties which do not involve any matter
litigated by the appeal and considering that in the case at bar, lis pendens
is not a matter litigated in the appeal and the records have not as yet been
transmitted to the appellate court so that this Court still has jurisdiction to
issue the Order of February 14, 1994 cancelling the notices of lis pendens
annotated on TCT No. T-92383 covering Lot 3244 and on TCT No. T-5050
covering lot 3246 and considering further, that the said Order does not
direct cancellation of lis pendens annotated on TCT No. T-89483 covering
Lot no. 1404 which contains a total area of 1,587 square meters where the
area of 64 square meters claimed by plaintiff can very well be taken; as
prayed for by the defendant Jose B. Tiongco, the Order of March 4, 1994
is hereby reconsidered and set aside and the Order of February 14, 1994
is hereby reconsidered and set aside and the Order of February 14, 1994
cancelling the notices of lis pendens on TCT No. T-92383 covering lot
3244 and on TCT No. T-5050 covering lot 3246 is hereby reinstated.
On April 5, 1994, the Register of Deeds cancelled the annotation of
notices of lis pendens.[17]
Feeling that a motion for reconsideration would be fruitless,
petitioner filed the instant special civil action for certiorari, alleging that:
 THE HONORABLE RESPONDENT JUDGE ACTED
CAPRICIOUSLY, WHIMSICALLY AND WITH GRAVE ABUSE OF
DISCRETION IN ORDERING THE CANCELLATION OF THE
NOTICES OF LIS PENDENS ANNOTATED AT THE BACK OF
THE CERTIFICATES OF TITLE THAT ARE THE SUBJECT OF
THE CIVIL CASE NO. 19408, AS THESE ARE AMONG THE
DOCUMENTS THAT ARE SOUGHT TO BE DECLARED NULL
AND VOID BY THE HEREIN PETITIONER.
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 Procedure [20] 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 procedure[24] 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.[26]
The petition should be dismissed, 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. Suelto[27] 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.
We reaffirmed this policy in People v. Cuaresma,[28] thus:
xxx A last word. This Court's original jurisdiction to issue writ of
certiorari (as well as prohibition, mandamus, quo warranto, habeas
corpus and injunction) is not exclusive. It is shared by this Court
with Regional Trial Courts (formerly Courts of First Instance), which
may issue the writ, enforceable in any part of their respective
regions. It is also shared by this Court, and by the Regional Trial
Court, with the Court of Appeals (formerly Intermediate Appellate
Court), although prior to the effectivity of Batas Pambansa Bilang
129 on August 14, 1981, the latter's competence to issue the
extraordinary writs was restricted to those "in aid of its appellate
jurisdiction." This concurrence of jurisdiction is not, however, to be
taken as according to parties seeking any of the writs an absolute,
unrestrained freedom of choice of the court to which application
therefor will be directed. There is after all a hierarchy of courts. That
hierarchy is determinative of the venue of appeals, and should also
serve as a general determinant of the appropriate forum for
petitions for the extraordinary writs. A becoming regard for that
judicial hierarchy most certainly indicates that petitions for the
issuance of extraordinary writs against first level ("inferior") courts
should be filed with the Regional Trial Court, and those against the
latter, with the Court of Appeals. A direct invocation of the Supreme
Court's original jurisdiction to issue these writs should be allowed
only when there are special and important reasons therefor, clearly
and specifically set out in the petition. This is established policy. It
is a policy that is necessary to prevent inordinate demands upon
the Court's time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent further over-
crowding of the Court's docket.Indeed, the removal of the restriction
on the jurisdiction of the Court of Appeals in this regard, supra-
resulting from the deletion of the qualifying phrase, "in aid of its
appellate jurisdiction"-was evidently intended precisely to relieve
this Court pro tanto of the burden of dealing with applications for
the extraordinary writs which, but for the expansion of the Appellate
Court's corresponding jurisdiction, would have had to be filed with
it.
The Court feels the need to reaffirm that policy at this time, and to enjoin
strict adherence thereto in the light of what it perceives to be a growing
tendency on the part of litigants and lawyers to have their applications for
the so-called extraordinary writs, and sometimes even their appeals,
passed upon and adjudicated directly and, immediately by the highest
tribunal of the land. The proceeding at bar is a case in point. The
application for the writ of certiorari sought against a City Court was
brought directly to this Court although there is no discernible special and
important reason for not presenting it to the Regional Trial Court.
The Court therefore closes this decision with the declaration, for the
information and guidance of all concerned, that it will not only continue to
enforce the policy, but will require a more strict observance
thereof. (emphasis supplied)
Notwithstanding these pronouncements, parties persisted in
disregarding the judicial hierarchy. As we noted in Santiago v. Vasquez,[29]
One final observation. We discern in the proceedings in this case a
propensity on the part of petitioner, and, for that matter, the same may be
said of a number of litigants who initiate recourses before us, to disregard
the hierarchy of courts in our judicial system by seeking relief directly from
this Court despite the fact that the same is available in the lower courts in
the exercise of their original or concurrent jurisdiction, or is even
mandated by law to be sought therein. This practice must be stopped, not
only because of the imposition upon the precious time of this Court but
also because of the inevitable and resultant delay, intended or otherwise,
in the adjudication of the case which often has to be remanded or referred
to the lower court as the proper forum under the rules of procedure, or as
better equipped to resolve the issues since this Court is not a trier of
facts. We, therefore, reiterate the judicial policy that this Court will not
entertain direct resort to it unless the redress desired cannot be obtained
in the appropriate courts or where exceptional and compelling
circumstance justify availment of a remedy within and calling for the
exercise of our primary jurisdiction.
This policy found further application in People v. Court of
Appeals,[30] Aleria v. Velez, [31] and Tano v. Socrates.[32] Only the presence
of exceptional and compelling reasons justified a disregard of the rule.[33]
 Petitioner has failed to advance a satisfactory explanation as to her obscure the issues, and his reliance on the fool's gold of gossip betrays
failure to comply with or non-observance of the principle of judicial only a shocking absence of discernment. To this end, it will be wise to give
hierarchy. There is no reason why the instant petition could not have been him an object lesson in the elementary rules of courtesy by which we
brought before the Court of Appeals, considering all the more that the expect members of the bar to comport themselves. These provisions of
appeal of the main case was already before it. In Magdalena, the Code of Professional Responsibility are pertinent:
Homeowners Association, Inc. v. Court of Appeals[34] we ruled, to wit:
CANON 8-A LAWYER SHALL CONDUCT HIMSELF WITH
The notice of lis pendens-i.e., that real property is involved in an action-is COURTESY, FAIRNESS AND CANDOR TOWARD
ordinarily recorded without the intervention of the court where the action is HIS PROFESSIONAL COLLEAGUES, AND SHALL
pending. The notice is but an incident in an action, an extrajudicial one, to AVOID HARASSING TACTICS AGAINST
be sure. It does not affect the merits thereof. It is intended merely to OPPOSING COUNSEL.
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 Rule 8.01-A lawyer shall not, in his professional dealings, use
in the property in any voluntary transaction are subject to the results of the languages which is abusive, offensive or otherwise
action, and may well be inferior and subordinate to those which may be improper.
finally determined and laid down therein. The cancellation of such a
precautionary notice is therefore also a mere incident in the action, and
may be ordered by the Court having jurisdiction of it at any given xxx xxx xxx xxx
time. And its continuance or removal-like the continuance or removal or
removal of a preliminary attachment of injunction-is not contingent on the Rule 11.03-A lawyer shall abstain from scandalous, offensive or menacing
existence of a final judgment in the action, and ordinarily has no effect on language before the courts.
the merits thereof.
In Romero v. Valle,[44] we stated that a lawyer's actuations,
In the case at bar, the case had properly come within the appellate "[a]lthough allowed some latitude of remarks or comment in the
jurisdiction of the Court of Appeals in virtue of the perfection of the furtherance of the cause he upholds, his arguments, both written or oral,
plaintiff's appeal. It therefore had power to deal with and resolve any should be gracious to both court and opposing counsel and be of such
incident in connection with the action subject of the appeal, even before words as may be properly addressed by one gentleman to another."
final judgment. The rule that no questions may be raised for the first time Otherwise, his use of intemperate language invites the disciplinary
on appeal have reference only to those affecting the merits of the action, authority of the court.[45] We are aghast at the facility with which
and not to mere incidents thereof, e.g., cancellation of notices of lis respondent Atty. Jose B. Tiongco concocts accusations against the
pendens, or, to repeat, the grant or dissolution of provisional opposing party and her counsel, although it is of public record that
remedies. [emphasis supplied] in Tiongco v. Deguma, et a1.,[46] we dismissed as totally unfounded his
charge of fraudulent conspiracy and public scandal against petitioner,
Had petitioner brought the instant petition before the Court of Major Tiongco, Atty. Deguma and even the latter's superior at the Public
Appeals, the same could, and would, have been consolidated with the Attorney's Office, Atty. Napoleon G. Pagtanac. His lexicon of insults,
appeal, thereby bringing under the competence of the said court all though entertaining, do not find a ready audience in us, and he should be,
matters relative to the action, including the incidents thereof. as he is hereby, warned accordingly: Homines qui gestant, quiqui
auscultant crimina, si meo arbitratu liceat, omnis pendeat, gestores
Prescinding from the foregoing discussion, the disposition of the linguis, auditores auribus.[47]
instant case will be incomplete without a reference to the improper and
unethical language employed by respondent Jose B. Tiongco, who is also WHEREFORE, the petition fir certiorari is hereby
counsel for private respondents, in his pleadings and motions filed both DISMISSED, without pronouncement as to costs.
before us and the court a quo. It is his belief that counsel for petitioner, SO ORDERED.
Atty. Marciana Deguma, "a rambunctious wrestler-type female of 52 who
does not wear a dress which is not red, and who stampedes into the
courtroom like a mad fury and who speaks slang English to conceal her
faulty grammar,"[35] is impelled by less than less than noble reasons in
serving as counsel for petitioner. Her ulterior motive? "[T]o please and
tenderize and sweeten towards her own self the readily available Carmelo
M. Tiongco,"[36] a retired police major described by respondent Tiongco as
Atty. Deguma's "nio bonito,"[37] an unmarried mestizo with curly hair who
lives with plaintiff for being houseless[38] who rents a place on the subject
property sought to be recovered by petitioner. Atty. Deguma, apparently
are unmarried maiden of a certain age, is variously described by
respondent Tiongco as "a love-crazed female Apache [who] is now ready
to skin defendant alive for not being a bastard,"[39] and a "horned spinster
and man-hungry virago and female bull of an Amazon who would stop at
nothing to molest, harrass (sic) and injure defendant - if only to please and
attract police-major Carmelo Tiongco Junior - the deeply desired object of
her unreciprocated affections - who happens not to miss every chance to
laugh at her behind her back."[40] He claims that Atty. Deguma, a lawyer
with the Public Attorney's Office, is engaged in a game of one-upmanship
with a fellow employee, in that "she happens to be ambitious enough to
secretly (that what she thought) plot to put one over her office-mate who
simply netted a corporal (if not a private) by aiming at no lest than an
IMDC major - hoping to catch him by sheer brass and audacity.[41] In so
doing, Atty. Deguma is using the PAO as a "marriage bureau for her own
benefit.[42] Respondent Tiongco predicts that nothing good will come out of
opposing counsel's scheme since, quoting Voltaire, "outside of virtue,
ther's (sic) no happiness."[43]
Respondent Tiongco has achieved a remarkable feat of character
assassination. His verbal darts, albeit entertaining in a fleeting way, are
cast with little regard for truth. However, he does nothing more than to
 FIRST DIVISION
[G.R. No. 146262. January 21, 2005]
HEIRS OF EUGENIO LOPEZ, SR., petitioners, vs. HON. ALFREDO R.
ENRIQUEZ, in his capacity as Administrator of the Land
Registration Authority and the REGISTER OF DEEDS OF
MARIKINA CITY, respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for review[1] to reverse the Decision[2] dated 29
November 2000 of the Court of Appeals (appellate court) in CA-G.R. SP
No. 55993. The appellate court affirmed the Resolution [3] dated 21 May
1999 issued by the Land Registration Authority (LRA) in Consulta No.
2879. The LRA ruled that a notice of lis pendens based on a motion is not
registrable.
The Facts
Alfonso Sandoval (Sandoval) and Roman Ozaeta, Jr. (Ozaeta) filed
an application for registration of title before the Regional Trial Court of
Pasig City, Branch 152 (land registration court), docketed as Case No.
2858, Land Registration Case No. N-18887 (LRC No. N-18887). The land
registration court issued an order of general default and hearings on the
application followed. On 31 May 1966, the land registration court granted
the application. The decision became final and executory, and the land
registration court issued a certificate of finality dated 8 March 1991. [4]
The National Land Titles and Deeds Administration (now LRA)
issued on 20 October 1977 Decree Nos. N-217643 and N-217644 in the
names of Sandoval and his wife Rosa Ruiz, and Ozaeta and his wife Ma.
Salome Lao.[5]
On 16 July 1997, petitioners Eugenio Lopez, Jr., Manolo Lopez,
Oscar Lopez, and Presentacion L. Psinakis (petitioners), heirs of Eugenio
Lopez, Sr., filed a motion[6] in LRC No. N-18887. The motion alleged that
Sandoval and Ozaeta sold the lots subject of the application to the late
Eugenio Lopez, Sr. on 23 September 1970. Petitioners prayed that the
court consider in the land registration case the Deed of Absolute
Sale[7] over the lots executed by Sandoval and Ozaeta and their
respective spouses in favor of Eugenio Lopez, Sr. Invoking Section 22 of
Presidential Decree No. 1529 (PD 1529),[8] petitioners also prayed that the
court issue the decree of registration in their names as the successors-in-
interest of Eugenio Lopez, Sr.
The land registration court gave due course to the motion and
conducted hearings.[9]
The Register of Deeds of Marikina City issued the corresponding
OCT Nos. O-1603 and O-1604 in favor of Sandoval and Ozaeta and their
spouses only on 18 August 1998.[10] The pertinent entries[11] in the
Decrees read:
This Decree is issued pursuant to the Decision dated 31st day of May,
1966 of the Hon. Pedro C. Navarro, Judge of [Court of First Instance of
Rizal, Branch II, Pasig, Rizal], and the Honorable Briccio C. Ygaa,
this 3rd day of July, 1998.
Issued at the National Land Titles and Deeds Registration Administration,
Quezon City, this 20th day of October, in the year of Our Lord nineteen
hundred and ninety-seven at 8:01 a.m.
(signed)
ALFREDO R. ENRIQUEZ
ADMINISTRATOR
National Land Titles and Deeds
Registration Administration
Entered in the Registration Book for Marikina, pursuant to the
provisions of section 39 of PD No. 1529, on the 18th day of August
nineteen hundred and ninety-eight, at 1:16 p.m.
(signed)
EDGAR D. SANTOS
Register of Deeds (Emphasis added)
Petitioners filed another motion on 25 November 1998 to declare
void Decree Nos. N-217643 and N-217644 and Original Certificate of Title
(OCT) Nos. O-1603 and O-1604. Petitioners pointed out that the OCTs
show that incumbent Administrator Alfredo R. Enriquez signed the
Decrees on 20 October 1997, before he assumed office on 8 July 1998
and even before Hon. Briccio C. Ygaa issued the Order of 3 July 1998.[12]
Petitioners questioned the inconsistencies in the dates and
requested the LRA to recall the decrees. The LRA Administrator denied
the request and explained the inconsistencies in the dates in a
letter[13] dated 1 December 1998. The entire letter states:
Republic of the Philippines
Department of Justice
LAND REGISTRATION
AUTHORITY
Quezon City
1 December 1998
Atty. Crisostomo A. Quizon
Quiason Makalintal Barot Torres & Ibarra Law Offices
2nd Floor Benpres Building
Exchange Road corner Meralco Ave.
Ortigas Center, Pasig City
Sir:
This concerns your letter requesting the recall of Decree Nos. N-217643
and N-217644 issued in Land Registration Case No. N-2858, LRC Record
No. N-18887, both in the names of Alfonso Sandoval and his wife, Rosa
Ruiz, and Roman Ozaeta, Jr., and his wife, Ma. Salome Lao.
Records of this Authority show that aforesaid decrees of registration were
prepared on October 20, 1977 pursuant to the decision of the court dated
May 31, 1966 and the order for issuance of decree dated August 24,
1993. Said decrees were forwarded to the Office of the Administrator on
August 8, 1998 and was [sic] released therefrom on August 13, 1998.
Consequently, said decrees were signed sometime between August 8 and
13 1998 and definitely not on October 20, 1997 as what is reflected
thereon because the undersigned Administrator assumed office only on
July 8, 1998. Apparently, at the time the decrees were signed it was not
noticed, through oversight, that they were dated October 20, 1977. It is
therefore hereby clarified that Decree Nos. N-217643 and N-217644 were
actually issued sometime between August 8 and 13 1998 and not on
October 20, 1997.
Regarding the claim that these decrees were prematurely issued as the
motion for the issuance of the decrees in favor of the Heirs of Eugenio
Lopez, the properties involved having been sold to him by the applicants,
is still pending with the court, it is informed that no copy of said motion nor
of the order directing this Office to comment thereon appears on file in the
records of the case. Hence, these matters could not have been taken into
consideration in the issuance of the decrees. Had the Administration been
apprised of these incidents, perhaps the issuance of the decrees could
have been held in abeyance until the court has resolved the same.
As to the recall of the decrees of registration, we regret to inform you that
since the certificates of title transcribed pursuant to said decrees have
already been issued and released by the Registrar of Deeds concerned, it
is now beyond our authority to recall them unless duly authorized by the
court.
We hope that we have satisfactorily disposed of the concerns raised in
your letter.
Very truly yours,
(signed)
ALFREDO R. ENRIQUEZ
Administrator
On 25 November 1998, petitioners filed with the Register of Deeds
of Marikina City an application to annotate the notice of lis pendens at the
back of OCT Nos. O-1603 and O-1604 on the ground that petitioners have
filed with the land registration court a motion to declare OCT Nos. O-1603
and O-1604 void.[14] Petitioners attached to the application a copy of the
25 November 1998 motion and the pertinent OCTs.
In a letter[15]dated 15 December 1998, the Register of Deeds of
Marikina City denied the application to annotate the notice of lis pendens.
The entire letter states:
Republic of the Philippines
Department of Justice
LAND REGISTRATION AUTHORITY
Registry of Deeds, Marikina City
15 December 1998
Atty. Crisostomo A. Quizon
2nd Floor, Benpres Bldg.
Exchange Road cor. Meralco Avenue
Pasig City
Sir:
This is in connection to [sic] your application to have a Notice of Lis
Pendens [annotated] at the back of OCT Nos. O-1603 and O-1604 issued
in the name of ALFONSO SANDOVAL AND SPOUSE.
Pursuant to Sec. 76, PD No. 1529[,] the contents of the notice are the
name[s] of the parties, the court where the action is pending, the date the
action was instituted and a copy of the compalint [sic] in order to
determine if the person named in the title is impleaded.
We regret to inform you that the application, bereft of the original petition
or compaint [sic] upon which this office will base its action, is DENIED.
If you do not agree with our findings, you can, without withdrawing the
documents you submitted, elevate the matter en consulta five (5) days
from receipt hereof to the Office of the Administrator, Land Registration
Authority, East Avenue cor. NIA Road, Quezon City.
Very truly yours,
(signed)
EDGAR D. SANTOS
Register of Deeds
On 14 January 1999, three days after receipt of the letter,
petitioners elevated the denial in consulta to the LRA. The case was
docketed as Consulta No. 2879.
The Ruling of the Land Registration Authority
In its resolution[16] dated 21 May 1999, the LRA stated that the sole
question for resolution is whether a notice of lis pendens is registrable
based on a motion to declare void the decrees and titles. The LRA agreed
with the Register of Deeds that a notice of lis pendens based on a motion
is not registrable. Relying on Section 24, Rule 14 of the Rules of Court,
the LRA ruled that only a party to a case has the legal personality to file a
notice of lis pendens relative to the pending case.
The LRA focused on petitioners standing in LRC No. N-18887. The
LRA declared that petitioners are not parties in LRC No. N-18887. Since a
land registration case is a proceeding in rem, an order of general default
binds the whole world as a party in the case. Petitioners are mere
movants whose personality the court has not admitted. Based on Section
26 of PD 1529, the LRA ruled that petitioners should have filed a motion to
lift the order of general default. Pertinent portions of the LRA decision
read:
Until and after the Order of General Default in LRC Case No. 18887 is
lifted, petitioners cannot be clothed with personality as oppositors in said
land registration case by merely filing a motion after a judgement has
been rendered. Such being the case, a notice of lis pendens on the basis
of the motion filed by petitioners cannot be admitted for registration. To
rule otherwise would preempt the judgment of the Court in so far as the
personalities of the movants as oppositors in the land registration case is
concerned.
WHEREFORE, premises considered, this Authority is of the opinion and
so holds that the notice of lis pendens is not registrable.
SO ORDERED.[17]
The Ruling of the Court of Appeals
Undaunted, petitioners filed before the appellate court a petition for
review of the LRAs decision. Petitioners filed the petition on the ground of
manifest error and grave abuse of discretion on the part of the LRA
Administrator when he ruled in Consulta No. 2879 that the notice of lis
pendens is not registrable.
The appellate court dismissed the petition for lack of merit. The
appellate court reiterated the LRAs ruling that only a party to a case has
the legal personality to file a notice of lis pendens. Petitioners have no
legal personality because they failed to file a motion to lift the order of
general default in the land registration case.
Issues
Petitioners present the following issues for resolution of this Court:
 1. WHETHER PETITIONERS MOTION TO DECLARE VOID
THE DECREES ISSUED BY THE LAND
REGISTRATION AUTHORITY IS A PROPER BASIS
FOR FILING THE NOTICE OF LIS PENDENS, and
2. WHETHER PETITIONERS CAN FILE THE MOTION TO
DECLARE VOID THE DECREES ISSUED BY THE
LAND REGISTRATION COURT IN LRC CASE NO. N-
18887 DESPITE THE FACT THAT THE COURT HAS
NOT LIFTED THE GENERAL ORDER OF DEFAULT.[18]
The Ruling of the Court
The petition has no merit.
We agree with the observation of the appellate court that the
pleadings filed by petitioners, public respondents and the Office of the
Solicitor General cite more or less the same provisions of the laws as
applicable in support of their respective contentions but differ x x x only
with respect to their interpretation thereof.[19] With this observation in mind,
we quote the pertinent provisions of the 1997 Rules of Civil Procedure and
of PD 1529.
Section 14, Rule 13 of the 1997 Rules of Civil Procedure provides:
SECTION 14. Notice of lis pendens. In an action affecting the title or the
right of possession of real property, the plaintiff and the defendant, when
affirmative relief is claimed in his answer, may record in the office of the
registry of deeds of the province in which the property is situated a notice
of the pendency of the action. Said notice shall contain the names of the
parties and the object of the action or defense, and a description of the
property in that province affected thereby. Only from the time of filing such
notice for record shall a purchaser, or encumbrancer of the property
affected thereby, be deemed to have constructive notice of the pendency
of the action, and only of its pendency against the parties designated by
their real names.
The notice of lis pendens hereinabove mentioned may be cancelled only
upon order of the court, after proper showing that the notice is for the
purpose of molesting the adverse party, or that it is not necessary to
protect the rights of the party who caused it to be recorded.
Section 76 of PD 1529 states:
SECTION 76. Notice of lis pendens. No action to recover possession of
real estate, or to quiet title thereto, or to remove clouds upon the title
thereof, or for partition or other proceedings of any kind in court directly
affecting the title to land or the use or occupation thereof or the buildings
thereon, and no judgment, and no proceeding to vacate or reverse any
judgment, shall have any effect upon registered land as against persons
other than the parties thereto, unless a memorandum or notice stating the
institution of such action or proceeding and the court wherein the same is
pending, as well as the date of the institution thereof, together with a
reference to the number of the certificate of title, and an adequate
description of the land affected and the registered owner thereof, shall
have been filed and registered.
Notice of Lis Pendens
Lis pendens literally means a pending suit. The doctrine of lis
pendens refers to the jurisdiction, power or control which a court acquires
over property involved in a suit, pending the continuance of the action, and
until final judgment.[20]
The purposes of lis pendens are (1) to protect the rights of the party
causing the registration of the lis pendens, and (2) to advise third persons
who purchase or contract on the subject property that they do so at their
peril and subject to the result of the pending litigation.[21]
The filing of a notice of lis pendens has a two-fold effect. First, it
keeps the subject matter of the litigation within the power of the court until
the entry of the final judgment to prevent the defeat of the final judgment
by successive alienations. Second, it binds a purchaser, bona fide or not,
of the land subject of the litigation to the judgment or decree that the court
will promulgate subsequently. However, the filing of a notice of lis
pendens does not create a right or lien that previously did not exist.[22]
Without a notice of lis pendens, a third party who acquires the
property after relying only on the certificate of title is a purchaser in good
faith. Against such third party, the supposed rights of a litigant cannot
prevail, because the former is not bound by the property owners
undertakings not annotated in the transfer certificate of title.[23] Thus, we
have consistently held that
The notice of lis pendens x x x is ordinarily recorded without the
intervention of the court where the action is pending. The notice is but an
incident in an action, an extrajudicial 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. The cancellation of such a precautionary notice is therefore also a
mere incident in the action, and may be ordered by the Court having
jurisdiction of it at any given time. And its continuance or removal x x x is
not contingent on the existence of a final judgment in the action, and
ordinarily has no effect on the merits thereof.[24]
A notice of lis pendens may involve actions that deal not only with
title or possession of a property, but also with the use or occupation of a
property.[25] The litigation must directly involve a specific property which is
necessarily affected by the judgment. Magdalena Homeowners
Association, Inc. v. Court of Appeals[26] enumerated the cases where a
notice of lis pendens is appropriate:
[A] notice of lis pendens is proper in the following cases, viz:
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.
On the other hand, the doctrine of lis pendens has no application in the
following cases:
a) Preliminary attachments;
b) Proceedings for the probate of wills;
c) Levies on execution;
d) Proceedings for administration of estate of deceased persons; and
e) Proceedings in which the only object is the recovery of a
money judgment.[27]
As decreed by Section 76 of PD 1529, a notice of lis
pendens should contain a statement of the institution of an action or
proceeding, the court where the same is pending, and the date of its
institution. A notice of lis pendens should also contain a reference to the
number of the certificate of title of the land, an adequate description of the
land affected and its registered owner.
The Register of Deeds denied registration of the notice of lis
pendens because the application was bereft of the original petition or
complaint upon which this office will base its action.[28] In consulta to the
LRA, petitioners pointed out that they have complied with the
requirements for the registration of the notice of lis pendens, as follows:
7.2.1 The Notice of Lis Pendens contains a statement of the filing by the
Heirs of Eugenio Lopez of a motion to declare Original Certificates of Title
Nos. O-1603 and O-1604 null and void;
7.2.2 It contains the name of the court wherein the motion is pending
which is the registration court, Regional Trial Court, Branch 152, Pasig
City. The date of the filing of the motion is shown on the motion itself
wherein the receipt of said motion by the land registration court
on November 25, 1998 is duly stamped;
7.2.3 The numbers of the Original Certificates of Title Nos. O-1603 and O-
1604 are clearly indicated in the notice;
7.2.4 There is adequate description of the land affected in the Notice of Lis
Pendens;
7.2.5 The names of the registered owners are indicated in Paragraph 4 of
the Motion attached to the Notice;
7.2.6 A copy of the motion to declare OCT Nos. O-1603 and O-1604 null
and void, dated November 25, 1998 upon which the Register of Deeds of
the Province of Rizal will base its action is attached as Annex A of the
Notice of Lis Pendens. (Emphasis in the original)[29]
Petitioners enumeration readily reveals that they have not complied
with the requisites. Both the LRA and the appellate court denied the
application for a notice of lis pendens because petitioners are mere
movants, and not original parties, in LRC No. N-18887. As petitioners are
not parties to an action as contemplated in Section 76 of PD 1529, they
failed to present the requisite pleading to the Register of Deeds of
Marikina City. We hold that the Register of Deeds correctly denied the
application for a notice of lis pendens.
Reconveyance
Petitioners committed a fatal procedural error when they filed a
motion in LRC No. N-18887 on 16 July 1997. The remedy of petitioners is
an action for reconveyance against Sandoval, Ozaeta and their spouses.
Reconveyance is based on Section 55 of Act No. 496, as amended by Act
No. 3322, which states that xxx in all cases of registration procured by
fraud the owner may pursue all his legal and equitable remedies against
the parties to such fraud, without prejudice, however, to the rights of any
innocent holder for value of a certificate of title xxx.
An action for reconveyance is an action in personam available to a
person whose property has been wrongfully registered under the Torrens
system in anothers name. Although the decree is recognized as
incontrovertible and no longer open to review, the registered owner is not
necessarily held free from liens. As a remedy, an action for reconveyance
is filed as an ordinary action in the ordinary courts of justice and not with
the land registration court.[30] Reconveyance is always available as long as
the property has not passed to an innocent third person for value. A notice
of lis pendens may thus be annotated on the certificate of title immediately
upon the institution of the action in court. The notice of lis pendens will
avoid transfer to an innocent third person for value and preserve the claim
of the real owner.[31]
Necessity of a Motion to Lift the Order of General Default
In its comment,[32] the LRA states that under Section 26 of PD 1529
the order of default includes petitioners. Therefore, petitioners failure to
move to lift the default order did not give them standing in the case. As
long as the court does not lift the order of general default, petitioners have
no legal standing to file the motion to declare void the decrees of
registration issued to the applicant. Section 26 of PD 1529 provides thus:
Sec. 26. Order of default; effect. If no person appears and answers within
the time allowed, the court shall, upon motion of the applicant, no reason
to the contrary appearing, order a default to be recorded and require the
applicant to present evidence. By the description in the notice To All
Whom It May Concern, all the world are made parties defendant and shall
be concluded by the default order.
Where an appearance has been entered and an answer filed, a default
order shall be entered against persons who did not appear and answer.
Petitioners justification for filing a motion to annul the decrees and
titles, as opposed to filing a motion to lift the order of general default, rests
on two related assumptions. First, with the filing of the 16 July 1997
motion and giving of due course to the motion by the land registration
court, petitioners assert that they acquired legal standing in the
registration proceedings. Second, buyer Eugenio Lopez, Sr. stepped into
the shoes of the sellers-applicants Sandoval and Ozaeta when applicants
sold the property to him. As successors-in-interest of the buyer, petitioners
contend that they are not strangers to the proceedings.
To justify their two assumptions, petitioners traced the antecedent
of Section 22 of PD 1529 to Section 29 of Act 496[33] and its judicial
interpretation in Mendoza v. Court of Appeals.[34]
Section 22 of PD 1529 provides:
SECTION 22. Dealings with land pending original registration.After the
filing of the application and before the issuance of the decree of
registration, the land therein described may still be the subject of dealings
in whole or in part, in which case the interested party shall present to the
court the pertinent instruments together with the subdivision plan
approved by the Director of Lands in case of transfer of portions thereof,
and the court, after notice to the parties, shall order such land registered
subject to the conveyance or encumbrance created by said instruments,
or order that the decree of registration be issued in the name of the person
to whom the property has been conveyed by said instruments.
The pertinent portion of Section 29 of Act 496 provides:
SECTION 29. After the filing of the application and before the issuance of
the decree of title by the Chief of the General Land Registration Office, the
land therein described may be dealt with and instruments relating thereto
shall be recorded in the office of the register of deeds at any time before
issuance of the decree of title, in the same manner as if no application had
been made. The interested party may, however, present such instruments
to the Court of First Instance instead of presenting them to the office of the
Register of Deeds, together with a motion that the same be considered in
relation with the application, and the court, after notice to the parties shall
order such land registered subject to the encumbrance created by said
instruments, or order the decree of registration issued in the name of the
buyer or of the person to whom the property has been conveyed by said
instruments. x x x
Mendoza v. Court of Appeals[35] explains the procedure in cases
of conveyance of the land subject of a registration proceeding by an
instrument executed between the time of filing of the application for
registration and the issuance of the decree of title.
The law does not require that the application for registration be amended
by substituting the buyer or the person to whom the property has been
conveyed for the applicant. Neither does it require that the buyer or the
person to whom the property has been conveyed be a party to the case.
He may thus be a total stranger to the land registration proceedings. The
only requirements of the law are: (1) that the instrument be presented to
the court by the interested party together with a motion that the same be x x x [P]etitioners committed an error of procedure when they filed a
considered in relation with the application; and (2) that prior notice be motion to intervene in the x x x land registration case for the proper
given to the parties to the case xxx.[36] procedure would have been for them to ask first for the lifting of the order
of general default, and then, if lifted, to file an opposition to the application
Petitioners also assert that they do not dispute the judgment of the of the applicants. This is so because proceedings in land registration are
land registration court. However, this position is in conflict with their 25 in rem, and not in personam, the sole object being the registration applied
November 1998 motion to have the decree and the titles declared void. for, and not the determination of any right not connected with the
Petitioners now assume the roles of both successors-in-interest and registration (Estila vs. Alvero, 37 Phil. 498).
oppositors. This confusion of roles brought about petitioners grave error in
procedure. Petitioners are not mere interested parties in this case. By filing their
motion to have the decrees and the corresponding certificates of title
The land registration court granted the application in LRC No. N- declared void, they took the role of oppositors to the application for land
18887 on 31 May 1966 and issued a certificate of finality dated 8 March registration.
1991. Petitioners filed their motion to consider the deed of sale in the
registration on 16 July 1997. Petitioners filed their motion to have the The appellate court stated that in as much as it would want to oblige
decrees and the corresponding certificates of title declared void on 25 to the plea of petitioners to hasten or expedite the proceedings and to
November 1998. Petitioners filed both motions long after the decision in avoid further expenses on the part of the petitioners, however[,] (it) could
LRC No. N-18887 became final and executory. Neither petitioners nor not.[40] Indeed, it requires a delicate balancing act between the objective of
even the applicants from whom they base their claim presented the Deed the Rules of Court to secure a just, speedy and inexpensive disposition of
of Sale before the land registration court while the action was pending. every action and proceeding[41] and the strict requirements for a notice
of lis pendens. The facts in this case show that petitioners have not
Considering the facts and arguments as presented above, we hold complied with the requirements.
that the motion filed by petitioners is insufficient to give them standing in
the land registration proceedings for purposes of filing an application of a WHEREFORE, we DENY the petition. We AFFIRM the Decision of
notice of lis pendens. However, we disagree with the LRA and the the Court of Appeals in CA-G.R. SP No. 55993 dated 29 November 2000.
appellate courts observation that petitioners need to file a motion to lift the
order of general default. A motion to lift the order of general default should SO ORDERED.
be filed before entry of final judgment. The land registration court granted
the application for registration of title on 31 May 1966 and issued a
certificate of finality on 8 March 1991. Petitioners filed their motion on 16
July 1997. Thus, even if petitioners filed a motion to lift the order of
general default, the order of default could not be set aside because the
motion was filed out of time.
In Lim Toco v. Go Fay,[37] this Court explained the effect of an
order of default to the party defaulted. A party declared in default loses his
standing in court. As a result of his loss of standing, a party in default
cannot appear in court, adduce evidence, be heard, or be entitled to
notice. A party in default cannot even appeal from the judgment rendered
by the court, unless he files a motion to set aside the order of default
under the grounds provided in what is now Section 3, Rule 9 of the 1997
Rules of Civil Procedure.
Indeed, in its comment before this Court, the LRA stated thus:

Under Section 26, PD 1429, petitioners are deemed to have been

included by the default order. Those who did not file an answer should be
considered as having lost their standing in court from that stage (Republic
v. Dela Rosa, 173 SCRA 12) except when they file a motion to set aside
the order [of] default on the grounds mentioned in Section 3, Rule 18 of
the Rules of Court (Toco v. Fay, 80 Phil. 166).

In land registration cases (as in the said LRC No. N-18887), an order of
general default was deemed to have been issued based on the
presumption of regularity in judicial proceedings (Pascual, et al. v. Ortega,
et al., 58 O.G. 12 March 1962 C.A.). Petitioners failed to adduce any
evidence showing that the order of general default was lifted. Records
disclosed that without first filing a motion to lift the order of general default,
petitioners filed a motion to declare as null and void the decrees and titles.
Until the order of general default is lifted by the court, petitioner could not
be considered as a party to the action. They are deemed movants whose
personality as far as the case is concerned is not yet admitted by the court
considering that the order of default has not been lifted.[38]

One should be careful, however, to distinguish between movants as

mere interested parties prescribed under Section 22 of PD 1529 and
movants as intervenors-oppositors to the land registration proceedings. It
is only in the latter case that a motion to lift the order of general default is
required. It is only in the latter case that the doctrine pronounced
in Serrano v. Palacio,[39] as repeatedly invoked by the LRA and OSG, is
applicable:
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-60323, April 17, 1990
MAGDALENA HOMEOWNERS ASSOCIATION, INC., RICARDO
CHUNG, JOSE ESTRELLA, LEONCIO PALANCA, NORBERTO
ROBLEZA, J.S. VALBUENA, GREGORIO CANCIO FRANCISCO
BUENCAMINO, and JESUS TOMACRUZ, petitioners,
vs. COURT OF APPEALS, MAGDALENA ESTATE, INC., QUEZON
CITY, DEVELOPMENT BANK OF THE PHILIPPINES, and THE
REGISTER OF DEEDS, QUEZON CITY, respondents.
NARVASA, J.:
A Resolution of the Court of Appeals 1 ordering, on motion, the Register of
Deeds to cancel a notice of lis pendensannotated in several Torrens
titles 2 is the subject of the special civil action of certiorari at bar.
The notice of lis pendens was recorded at the instance of the plaintiffs in
Civil Case No. Q-18223 of the Court of First Instance at Quezon
City. 3 The case involved a dispute regarding the ownership of certain lots
within a subdivision known as Magdalena Rolling Hills which the residents
claimed had been reserved as an "open space" and therefore could not in
any manner be sold, disposed of or encumbered.
The subdivision was owned by the Magdalena Estate, Inc. (hereafter
simply MEI), located at New Manila, Quezon City. It originally had a total
area of 355,490 square meters. Among the subdivision lots was Lot 15,
Block 18, which had an area of 21,460 square meters. A part of this Lot
15, measuring 7,100 square meters, had initially been set aside as the
subdivision's "open space," i.e., reserved for use as a park, playground or
recreational zone.
However, an amendment of the plan of the subdivision (amended
subdivision plan [LRC] Psd-18617) 4 — substituting the area earlier
designated as open space with an area of 7,100 square meters (being as
aforesaid a portion of Lot 15, Block 18), with several other lots (Lots 21 to
27 of Block 20) having a combined area also of 7,100 square meters —
was approved by the City Council of Quezon City. The Council also
authorized the subdivision for disposition to the public of the former open
space. 5 Subsequently, the Court of First Instance of Quezon City also
approved the same amended subdivision plan [LRC] Psd-18167) in
accordance with Republic Act No. 44, subject to the condition "that all the
roads, alleys, drainage and open space, dedicated for public use,
delineated therein, shall be made subject to the limitations imposed by
law." 6
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. 7
Some time afterwards, by virtue of a deed executed by MEI and accepted
by the City Mayor of Quezon City, 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.8
After the donation of the parks and playgrounds just mentioned, MEI
disposed of the entire Lot 15, Block 18 including that part thereof or
originally designated as open space (measuring 7,100 square meters). An
area of' 15,778 square meters within this Lot 15, was subsequently
conveyed to the Development Bank of the Philippines (DBP) by way
of dacion en pago on May 19, 1971. 9 The rest, residential lots with an
aggregate area of 5,688 square meters, were sold to third parties who
thereafter constructed houses thereon. 10
Now, the purchasers of the other subdivision lots, who had organized
themselves into a non-stock corporation known as the Magdalena
Homeowners Association, Inc., believed that the act of the Quezon City
Government of authorizing the release of said Lot 15 as open space, after
it had been so declared and earlier dedicated as such — and its
substitution by another portion of the subdivision — was beyond the City
Government's authority. They therefore brought suit against the
Magdalena Estate, Inc. MEI in the Court of First Instance at Quezon City
for the recovery of said Lot 15 as "open space" for public use of the
residents of the subdivision. 11 The complaint, amended a few months
later to implead the Quezon City Government, 12 prayed for judgment (1)
that MEI pay Quezon City P2,575,200, representing the market value of
Lot 15, Block 18, or that, alternatively, (2) the transfer certificates covering
Lots 1 to 10, Block 11 (12?), (LRC) Psd-19167, with an aggregate area of
5,359 square meters i.e., Transfer Certificates of Title Numbered 166683,
166754 to 166763, inclusive, of the Registry of Deeds for Quezon City be
cancelled and new ones issued in the name of Quezon City for the use
and employment, as parks and playgrounds, of the residents of the
subdivision. 13 Answers were in due course filed by the defendants.
While the case was pending, notices of lis pendens were, at the plaintiffs'
instance, inscribed by the Register of Deeds of Quezon City on the
Torrens is titles of all the lots embraced within Block 12 (Numbered
166754 to 166763, inclusive, as well as those titles numbered 258973,
258974, 266509, 266510, 267304 to 267309, inclusive). 14These were
among the lots previously conveyed by MEI to the Development Bank of
the Philippines by way of dacion en pago, supra. 15
Judgment was rendered by the Trial Court after due proceedings, 16 the
dispositive portion of which is as follows:
WHEREFORE, considering that the plaintiffs have no cause of
action against defendant Quezon City government, the
complaint against it is hereby DISMISSED.
HOWEVER, insofar as the action for recovery of open space is
concerned, judgment is hereby rendered authorizing the
plaintiffs to recover the subject space from MEI, thereafter to be
donated to the Quezon City government, to maintain and
develop the same for the ultimate use of the common weal.
Not satisfied with this judgment, the petitioners went up to the Court of
Appeals to seek its modification. 17
While the case was pending adjudgment, MEI and DBP filed separate
motions with the Court of Appeals praying for cancellation of the notice
of lis pendens annotated on the titles of the lots in Block 12 of the
subdivision. 18 These motions were granted by resolution dated December
10, 1981. Reconsideration was sought and denied by Resolution dated
February 8, 1982. Hence, the petition at bar, for nullification of the
resolutions of December 10, 1981 and February 8, 1982 on the theory that
in promulgating them, the Court of Appeals had acted with grave abuse of
discretion if not indeed without or in excess of its jurisdiction.
The petitioners' first argument, that the Court of Appeals had no
jurisdiction to take cognizance of and grant the motion to cancel notice
of lis pendens because no such motion had ever been filed in the Court a
quo, cannot be sustained.
According to Section 24, Rule 14 of the Rules of Court 19 and Section 76
of Presidential Decree No. 1529, 20 a notice of lis pendens is proper in the
following cases, viz.:
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 — i.e., that real property is involved in an action
— is ordinarily recorded without the intervention of the court where the
action is pending. The notice is but an incident in 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. 21 The cancellation
of such a precautionary notice is therefore also a mere incident in the
action, and may be ordered by the Court having jurisdiction of it at any
given time. And its continuance or removal — like the continuance or
removal of a preliminary attachment or injunction — is not contingent on
the existence of a final judgment in the action, and ordinarily has no effect
on the merits thereof.

In the case at bar, the case had properly come within the appellate
jurisdiction of the Court of Appeals in virtue of the perfection of the
plaintiffs' appeal.1âwphi1 It therefore had power to deal with and resolve
any incident in connection with the action subject of the appeal, even
before final judgment. 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 thereof, e.g., cancellation of notices of lis
pendens, or, to repeat, the grant or dissolution of provisional remedies.

Now, a notice of lis pendens may be cancelled upon order of the court,
"after proper showing that the notice is for the purpose of molesting the
adverse party, or that it is not necessary to protect the rights of the party
who caused it to be recorded." 22

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. 23

That determination, and the conclusion that Presidential Decree No. 1529
"authorizes the cancellation of notices oflis 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.