113) Alejandrino v.

CA
Facts:
The late spouses, Jacinto Alejandrino and Enrica Labunos left their six children a lot in
Mambaling, Cebu City. Upon the demise of the Alejandrino spouses, the property should have
been divided among their children with each child having a share of the lot. However, the estate
of the Alejandrino spouses was not settled in accordance with the procedure outlined in the
ROC.
Petitioner Mauricia allegedly purchased 12.17 sq. mts. of Gregorio’s share, 36.50 sq. mts. of
Ciriaco’s share and 12.17 sq. mts. of Abundio’s share (total of 97.43 sq. mts., including her
own share). It turned out, however, that a third party name Licerio Nique , also purchased
portions of the property from Laurencia, Gregorio, Abundio through Laurencia and Marcelino.
Ruling of the RTC:
Laurencia later questioned the sale in an action for quieting of title and damages against Nique.
The RTC of Cebu rendered a decision in favor of Nique dismissing the complaint filed and
declared the latter as the owner in fee simple of the share of the parcel of land.
Ruling of the CA:
Laurencia appealed to the CA but later withdrew the same.
Meanwhile, Mauricia filed before the RTC a complaint for redemption and recovery of
properties with damages against Nique.
Ruling of the RTC:
The RTC ordered the segregation of 146 sq. mts. from the lot by having the same surveyed.
Mauricia questioned this order of the lower court in a petition for certiorari and prohibition with
prayer for the issuance of a writ of preliminary injunction before the CA.
Ruling of the CA:
Dismissed the petition.
Petitioner’s Argument:
The lower court acted beyond its jurisdiction in ordering the segregation of the property bought
by private respondent as the same was not decreed in its judgment, which had long become
final and executory. Partition of the property cannot be effected because private respondent is
also a defendant. The extrajudicial settlement of estate referred to in the order, was not
discussed in the decision of the lower court and even if it were, she could not be bound thereby
considering that she was not a party litigant. She questions the validity of the deed of
extrajudicial settlement because it was not notarized or published.
Private Respondent’s Arguments:
Although petitioner was not a party litigant, she is estopped form questioning from the decision
in that case and filing the instant petition because she had knowledge of the existence of the
case where res judicata had set in. The instant petition was filed in violation of Circular No.
28-91 on forum shopping “in that petitioner in the instant petition whose counsel is also the
counsel of plaintiff-appellant Laurencia, which is presently pending”. He asserts that the lower
courts did not exceed its jurisdiction and/or commit grave abuse of discretion in granting his
motion for segregation. He also charges counsel for petitioner with exhibiting “unethical
conduct and practice” in appearing as counsel for petitioner after he had appeared for
complainant Laurencia.
Issue:
WON as an heir of the Alejandrino property, Laurencia may validly sell specific portion thereof
to a third party.
Ruling of the SC:
Art. 1078 of the CC provides that where there are two or more heirs, the whole estate of the
decedent is, before partition, owned in common by such heirs, subject to the payment of debts
of the deceased. Under a co-ownership, the ownership of an undivided thing or right
belongs to different persons. Each co-owner which is held pro indiviso exercises his rights
over the whole property and may use and enjoy the same with no other limitation that that he
shall not injure the interests of his co-owners. The underlying rationale is that until a division
is made, the respective share of each cannot be determined and every co-owner exercises,
together with his co-participants, joint ownership over the pro indiviso property, in
addition to his use and enjoyment of the same.
Although the right of an heir over the property of the decedent is inchoate as long as the
estate has not been fully settled and partitioned, the law allows a co-owner to exercise the
rights of ownership over such inchoate right.
With respect to properties shared by virtue of inheritance, alienation of a pro indiviso portion
thereof is specifically governed by Art. 1088.
Laurencia was within her hereditary rights in selling her pro indiviso share of the lot. Because
the property had not yet been partitioned, no particular portion could be identified and
delineated as the object of the sale.
“A co-owner has the right to alienate his pro indiviso share even without the consent of the
other co-owners. As a mere part owner, he cannot alienate the shares of the other co-owners.
The prohibition is premised on the rule that ‘no one can give what he does not have’.”
The legality of Laurencia’s alienation was settled in the previous case. The decision in that case
became final and executory with Laurencia’s withdrawal of her appeal. When Nique filed a
motion for segregation of the portions, he was in effect calling for the partition of the property.
Partition of the estate may only be effected by (1) the heirs themselves extrajudicially; (2)
by the court in an ordinary action for partition; (3) by the testator himself; (4) by the third
person designated by the testator.
The trial court may not order partition of an estate in an action for quieting of title. As there are
no pending administration proceedings, the property of the spouses can only be partitioned by
the heirs themselves in an extrajudicial settlement of estate. Evidence on the extrajudicial
settlement was offered before the RTC and it became the basis for the order of segregation.
Mauricia does not deny the fact of the execution of the deed of the extrajudicial settlement of
estate but questions only its validity on account of absence of notarization and the non-
publication thereof.
Notarization of the deed of extrajudicial settlement has the effect of making it a public
document that can bind third parties. However, this formal requirement is superseded by the
CC in Art. 1082.
It appears that when a co-owner sells his inchoate right in the co-ownership, he expresses
his intention to put an end to indivision among his co-heirs. Partition among co-owners may
thus be evidenced by the overt act of a co-owner of renouncing his right over the property
regardless of the form it takes. Laurencia expressed her intention to terminate the co-ownership
by selling her share to Nique.
The execution of the deed reflected the intention of both to physically divide the property. Both
of them had acquired the shares of their brothers and therefore it was only the two of them that
needed to settle the estate. The fact that the document was not notarized is no hindrance to its
effectivity.
Laurencia had transmitted her rights over portions she had acquired form her brothers to Nique.
The sale was made after the execution of the deed of extrajudicial settlement that Nique himself
witnessed.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED.
115.) Joseph L. Sy v. Nicolas Capistrano
Facts:
Sometime in 1980, Nenita Scott approached Capistrano and offered her services to help him
sell his land covered by TCT No. 76496 of the ROD of Caloocan. Capistrano gave her a
temporary authority to sell which expired without any sale transaction being made. To his
shock, he discovered that TCT 76496 (in his name) had already been cancelled and a new one
was issued tp Josephina A. Jamilar. The new TCT was likewise already been cancelled and
replaced by 3 TCTs all in the names of the Jamilar spouses. Out of 2 of the 3 new TCTs, had
also been cancelled and replaced, issued to Nelson Golpeo and John B. Tan.
Capistrano also discovered 10 events concerning his land.
Thus, the action for reconveyance was filed by Capistrano.
Respondent’s Contention:
The signature’s on the deed of sale in favor of Scott were forgeries; that the owner’s duplicate
copy of TCT No. 76496 in his name had always been in his possession; and that Scott, the
Jamilar spouses, Golpeo, and Tan were not innocent purchasers for value since they all
participated in defrauding him of his property.
Jamilar spouses’ Answer with Counterclaim:
Denied the allegations and claimed that Capistrano had no cause of action against them since
there was no privity of transaction between them; the issuance of the new TCT in their names
was proper, valid and legal; and that Capistrano was estopped.
Sy, Golpeo, and Tan’s Answer:
Denied the allegations in the complaint and alleged that Capistrano had no cause of action
against them; that at the time they bought the property from the Jamilars and the Gilturas as
unregistered owners, there was nothing in the COTs that would indicate any vice in its
ownership; that a buyer in good faith of a registered realty need not look beyond the Torrens
title to search any defect; and that they were innocent purchasers for value.
Scott’s Answer with Counterclaim and Cross-claim against Sy, Golpeo, Tan and the
Jamilars:
Alleged that she had no knowledge or any actual participation in the execution of the deeds of
sale in her favor and the Jamilars’; that she only knew of the conveyances when she received a
copy of the complaint; that her signatures were forgeries; that when her authority to sell the
land expired, she had no other dealings with it; that she never received any amount of money
as alleged consideration for the property; and that, even if she were the owner, she would never
have sold it at a low price.
She also alleged that when she was looking for buyers, the Jamilars helped her locate the
property, and they became conversant with the details of the ownership and other particulars;
that only the other defendants were responsible for the seeming criminal conspiracy; that in the
event that she would be held liable to Capistrano, her other co-defendants should be ordered to
reimburse her of whatever amount she may be made to pay Capistrano.
Sy, Golpeo, and Tan filed a third-party complaint against the Giltura spouses who were the
Jamilars’ alleged co-vendors of the property.
Trial Court’s Decision:
Decided in favor of Capistrano and declared him as the absolute owner of the land; ordering
the ROD to cancel the TCTs in the name of Josefina Jamilar, Golpeo, and Tan; issuing three
new TCTs in replacement of the cancelled ones; ordering all private defendats to pay jointly
and severally for damages caused; and ordering the Cross-claim, Third-Party Complaint, and
Counterclaims dismissed.
CA’s Decision:
Affirmed the decision of the trial court with modification.
Issue/s:
WON petitioners were innocent purchasers for value.
SC’s Ruling:
Petition should be denied.
Firstly, the CA was correct in upholding the finding of the trial court that the sale of the property
from Capistrano to Scott was a forgery, and resort to a handwriting expert was not necessary as
the specimen signature submitted during trial showed marked variance from that found in the
deed of absolute sale.
The deed of sale between Scott and the Jamilars was also forged, as it noted the stark differences
between the signatures of Scott and those in her handwritten letters to Capistrano.
Secondly, the CA properly held that the Jamilars should have known that the signatures of Scott
and Capistrano were forgeries due to the patent variance of the signatures in the two deeds of
sale shown by Scott. Hence, they were not innocent purchasers for value.
The CA also correctly found the Gilturas not innocent purchasers for value, because they failed
to check the veracity of the allegation of Jamilar that he acquired the property from Capistrano.
The SC also share the observation of the CA that Sy knew the title was still in the name of
Capistrano but failed to verify the claim of the spouses regarding the transfer of ownership of
the property by asking for the copies of the deeds of absolute sale between Capistrano and Scott,
and between Scott and Jamilar. Sy should have likewise inquired why the Gilturas had to affix
their conformity to the contract to sell by asking for a copy of the deed of sale between the
Jamilars and the Gilturas. Had Sy, done so, he would have learned that the Jamilars claimed
that they purcchased the property from Capistrano and not Scott.
Tan’s testimony that he, Golpeo and Sy are brothers, he and Golpeo having been adopted by
Sy’s father. Tan also testified that he and Golpeo were privy to the transaction between Sy and
the Jamilars and the Gilturas, as shown by their collective act of filing a complaint for specific
performance to enforce the contract to sell.
Also noteworthy is tha fact that even before the supposed executed deed of sale by Scott in
favor of the Jamilars, the latter had already caused the subdivision of the property into 9 lots,
with the title to the property still in the name of Capistrano.
The owner’s copy of the original TCT in the name of Capistrano had always been in his
possession since he gave Scott only a photocopy thereof pursuant to the latter’s authority to
look for a buyer of the property. The Jamilars were able to acquire a new owner’s duplicate
copy by filing an affidavit of loss and a petition for the issuance of another owner’s duplicate
copy. The minimum requirement of a good faith buyer is that the vendee of the real
property should at least see the owner’s duplicate copy of the title. A person who deals with
registered land through someone who is not th registered owner is expected to look beyond
the COT and examine all the factual circumstances thereof in order to determine if the
vendor has the capacity to transfer any interest in the land. He has the duty to ascertain the
identity of the person with whom he is dealing and the latter’s legal authority to convey.
Finally, there is the questionable cancellation of the COT of Capistrano which resulted in the
immediate issuance of a certificate of title in favor of the spouses despite the claim that
Capistrano sold his property to Scott and it was Scott who sold the same to the Jamilars.
WHEREFORE, the petition is DENIED DUE COURSE for failure to establish reversible error
on the part of the CA.
117.) Enriqueta Locsin v. Bernardo Hizon
Facts:
Locsin was the registered owner of a lot covered by TCT No. 235094. In 1992, she filed an
ejectment case against Billy Aceron before the MTC to recover possession over the land. The
two entered into a compromise agreement, which the MTC approved. Locsin later went to the
US without knowing whether Aceron has complied with his part of the bargain under the
compromise agreement. In spite her absence, she continued to pay the real property tax on the
subject lot.
In 1994, after discovering her copy of the TCT was missing, Locsin filed a petition for
administrative reconstruction in order to secure a new TCT. Sometime in 2002, she then
requested her counsel to check the status of the subject lot. It was then that they discovered the
following:
1. One Marylou Bolos had the new TCT cancelled and secured a new one in her favor by
registering a Deed of Absolute Sale allegedly executed by Locsin.
2. Bolos later sold the lot to Bernardo Hizon but was titled under Carlos Hizon’s name.
3. Bernardo, claiming to be the owner of the property, filed a Motion for Issuance of Writ
of Execution for the enforcement of the court-approved compromise agreement.
4. The property was already occupied and was, in fact, up for sale.
Locsin, through counsel, sent Carlos a letter requesting the return of the property sincer her
signature was a forgery. Carlos denied Locsin’s request, claiming that he was unaware of any
defect or flaw in Bolos’ title and is thus an innocent purchaser for value and good faith.
Bernardo met with Locsin’s counsel and discussed the possibility of a compromise. He ended
the metting with a promise to come up with the win-win situation for his son and Locsin, a
promise which turned out to be deceitful for Locsin learned that Carlos already sold the property
to his sister and her husband (Jose and Lourdes Guevara) and had a new COT issued in their
names. The spouses then immediately mortgaged the said property to secure a loan/credit
facility with Damar Credit Corp.
Locsin then filed an action for reconveyance, annulment of the new TCT, cancellation of the
mortgage lien annotated thereon, and damages against Bolos, Bernardo, Carlos, the Sps.
Guevara, DCC, and the ROD. The charges against DCC, however were dropped on joint motion
of the parties. This is in view of the cancellation of the mortgage for failure of the spouses
Guevara to avail of the loan/credit facility DCC extended in their favor.
Ruling of the RTC:
Dismissed the complaint and finding for respondents, as defendants thereat, holding that: (a)
there is insufficient evidence to show that Locsin’s signature was a forgery; (b) the deed of sale
is a public document, having been notrarized; thus it has, in its favor the presumption of
regularity; (c) Locsin cannot rely on the apprent difference of the signatures in the deed and in
the docs presented by her to prover her allegation of forgery; (d) the transfers of title from Bolos
to Carlos and from Carlos to the spouses Guevara are valid and regular; (e) Bernardo, Carlos,
and the spouses are all buyers in good faith.
Ruling of the CA:
Ruled that it was erroneous for the RTC to hold that Locsin failed to prove forgery of her
signature since thes signature in the Deed of Absolute Sale in favor of Bolos differs from her
signatures in the other documents offered as evidence.
It however, affirmed the RTC’s finding that respondents are innocent purchasers for value. It
ruled that respondents, having dealt with property registered under the Torrens System, need
not go beyond the COT, but only has to rely on the said certificate. The CA added, any notice
of defect or flaw in the title of the vendor should encompass facts and circumstances that would
impel a reasonably prudent man to inquire into the status of the title of the property in order to
amount to bad faith.
The Ca ruled that Locsin can no longer recover the lot.
Petitioner’s Argument:
She insists that Bernardo was well aware, at the time he purchased the property, of a possible
defect in Bolos’ title since he knew that another person was then occupying the lot. Bernardo
even moved the execution of the compromise agreement between Locsin and Aceron in order
to enforce to oust Aceron of his possession over the property.
She maintains that Bernardo should have acted as a reasonably diligent buyer in verifying the
authenticity of Bolos’ title. Bernardos’ stubborn refusal to make an inquiry is indicative of his
lack of prudence in protecting himself from possible defects or flaws therein, and constantly
bars him from interposing the protection accorded to an innocent purchaser for value.
Petitioner points out that Carlos’ and Sps. Guevara’s admissions and testimonies, when placed
side-by-side, it is revealed that the transfore from the former to the latter was only simulated
and intended to keep the property out of petitioner’s reach.
Respondent’s Argument:
They maintain that they had the right to rely solely upon the face of Bolos’ clean title,
considering that it was free from any lien or encumbrance. They are not even required, so they
claim, to check on the validity of the sale. They also claim that their knowledge of Aceron’s
possession cannot be the basis for an allegation of bad faith, for the property was purchased on
an “as-is where-is” basis.
Issue/s:
WON respondents are innocent purchasers for value.
SC’s Ruling:
Precautionary measures for buyers of real property:
An innocent purchaser for value is one who buys the property of another without notice that
some other person has a right to or interest in it, and who pays a full and fair price at the
time of the purchase or before receiving any notice of another person’s claim. A defective
title – or one the procurement of which is tainted with fraud and misrepresentation – may be
the source of a completely legal and valid title, provided that the buyer is an innocent third
person who, in good faith, relied on the correctness of the COT, or an innocent purchaser for
value.
The mirror doctrine which echoes the rule that every person dealing with registered land
may safely rely on the correctness of the COT issued therfor and is in no way obliged to
go beyond the certificate to determine the condition of the property. Except, “The presence
of anything which excites or arouses suspicion should then prompt the vendee to look beyond
the certificate and investigate the title of the vendor appearing on the face of said certificate.
One who falls within the exception can neither be denominated an innocent purchaser for value
nor a purchaser in good faith and, hence, does not merit the protection of the law”.
Bolos’ COT was concededly free from liens and encumbrances on its face. However, the failure
of Carlos and the spouses Guevara to exercise the necessary level of caution bars the application
of the mirror doctrine and inspires the Court’s concurrence with petitioner’s proposition.
Carlos is not an innocent purchaser for value:
Bernardo negotiated with Bolos for the property as Carlos’ agent. This is bolstered by the fact
that he was the one who arranged for the sale and eventual registration of the property in Carlos’
favor.
The principal is chargeable and bound by the knowledge of, or notice to, his agent in that
capacity, any information available and known to Bernardo is deemed similarly available
and known to Carlos, including the following:
1. Bernardo knew that Bolos, from whom he purchased the subject property, never
acquired possession over the lot. In fact, in his direct testimony, Bernardo admitted
having knowledge of Aceron's lot possession as well as the compromise agreement
between petitioner and Aceron.
2. Bolos' purported Deed of Sale was executed on November 3, 1979 but the ejectment
case commenced by Locsin against Aceron was in 1992, or thirteen (13) years after
the property was supposedly transferred to Bolos.
3. The August 6, 1993 Judgment, 24 issued by the MTC on the compromise agreement
between Locsin and Aceron, clearly stated therein that " [o]n August 2, 1993, the parties
[Aceron and Locsin] submitted to [the MTC] for approval a Compromise Agreement
dated July 28, 1993." It further indicated that "[Aceron] acknowledges [Locsin's]
right of possession to [the subject property], being the registered owner thereof."
Having knowledge of these, Bernardo and Carlos should have been impelled to investigate the
reason behind the arrangement. They should have inquired regarding the status of the title of
the property in litigation in order to protect of Carlos’ interest. It should have roused suspiction
that it was Locsin, not Bolos, who sought the recovery of possession by commencing an
ejectment case against Aceron, and even entered into a compromise agreement with the latter
years after the purported sale in Bolos’ favor. Instead, Bernardo and Carlos took
inconsistent positions when they argued for the validity of the transfer of the property in
favor of Bolos, but in the same breath prayed for the enforcement of the compromise
agreement entered into by Locsin.
Entering into a compromise agreement is an act of strict dominion. If Bolos already
acquired ownership of the property as early as 1979, it should have been her who entered into
a compromise agreement with Aceron in 1993, not her predecessor-in-interest, Locsin, who,
theoretically, had already divested herself of ownership thereof.
The Spouses Guevara are not innocent purchasers for value:
The SC found the sale highly suspicious. There is a dearth of evidence to support the spouses’
position that the sale was a bona fide transaction. There is no document, contract, or deed
evidencing the sale in favor of the spouses Guevara. The same goes for the payment of the
purchase price of the property in favor of Carlos. The only documentary evidence presented
were: (1) deed of sale between Locsin and Bolos; (2) TCT issued in Bolos’ name; (3) TCT in
Carlos’ name; (6) TCT in the name of Sps. Guevara.
Respondents proffer their own testimonies explaining the circumstances surrounding the
alleged sale. Basic is the rule that bare and self-serving allegations, unsubstantiated by
evidence, are not equivalent to proof. The SC did not give credence to their representations
that the sale actually transpired.
The transfer from Carlos to the Sps. Guevara was effected only 15 days after Locsin demanded
the surrender of the property from Carlos.
Even the mortgage in favor of DCC was a mere ploy to make it appear that the Sps. Guevara
exercised acts of dominion over the subject property.
WHEREFORE, the petition is GRANTED.
119. Alfredo Sajonas and Conchita Sajonas v. CA
FACTS: The Sajonas couple are before us, on a Petition for Review on Certiorari,
praying inter alia to set aside the CA’s decision, and to reinstate that of the RTC
On September 22, 1983, spouses Uychocde agreed to sell a parcel of residential land located in
Antipolo, Rizal to the spouses Sajonas on installment basis as evidenced by a Contract to Sell
dated September 22, 1983. The property was registered in the names of the Uychocde
spouses under TCT No. N-79073 of the Register of Deeds of Marikina, Rizal.
On August 27, 1984, the Sajonas couple caused the annotation of an adverse claim based on
the said Contract to Sell on the title of the subject property, which was inscribed as Entry No.
116017. Upon full payment of the purchase price, the Uychocdes executed a Deed of Sale
involving the property in question in favor of the Sajonas couple on September 4, 1984. The
deed of absolute sale was registered almost a year after, or on August 28, 1985.
Meanwhile, it appears that Pilares (defendant-appellant) filed a Civil Case for collection of
sum of money against Ernesto Uychocde. On June 1980, a Compromise Agreement was entered
into by the parties in the said case under which Uychocde acknowledged his monetary
obligation to Pilares amounting to P27,800 and agreed to pay the same in two years. When
Uychocde failed to comply with his undertaking in the compromise agreement, Pilares moved
for the issuance of a writ of execution to enforce the decision based on the compromise
agreement, which the court granted in its order dated August 3, 1982. Accordingly, a writ of
execution was issued on August 12, 1982 by the CFI of Quezon City. Pursuant to the order of
execution a notice of levy on execution was issued on February 12, 1985. On the same
date, defendant sheriff Garcia of Quezon City presented said notice of levy on execution before
the Register of Deeds of Marikina and the same was annotated at the back of the TCT of the
subject land.
When the deed of absolute sale dated September 4, 1984 was registered on August 28, 1985,
TCT No. N-79073 was cancelled and in lieu thereof, TCT No. N-109417 was issued in the
name of the Sajonas couple. The notice of levy on execution annotated by defendant sheriff
was carried over to the new title. On October 21, 1985, the Sajonas couple filed a Third Party
Claim with the sheriff of Quezon City, hence the auction sale of the subject property did not
push through as scheduled.
On January 1986, the Sajonas spouses demanded the cancellation of the notice of levy on
execution upon Pilares, through a letter to their lawyer. Despite said demand, defendant-
appellant Pilares refused to cause the cancellation of said annotation. In view thereof, plaintiffs-
appellees filed a complaint in the RTC of Rizal, against Pilares, the judgment creditor of the
Uychocdes. The trial court rendered its decision in favor of the Sajonas couple, and ordered
the cancellation of the Notice of Levy from TCT No. N-109417. The court a quo stated, thus:
…It is a well settled rule in this jurisdiction that actual notice of an adverse claim is
equivalent to registration and the subsequent registration of the Notice of Levy could not
have any legal effect in any respect on account of prior inscription of the adverse
claim annotated on the title of the Uychocdes.
On the issue of whether or not plaintiffs (Sajonas) are buyers in good faith of the property of
the spouses Uychocde even notwithstanding the claim of the defendant that said sale executed
by the spouses was made in fraud of creditors, the Court finds that the evidence in this
instance is bare of any indication that said plaintiffs as purchasers had notice beforehand of the
claim of the defendant over said property or that the same is involved in a litigation between
said spouses and the defendant. Good faith is the opposite of fraud and bad faith, and the
existence of any bad faith must be established by competent proof.
Dissatisfied, Pilares appealed to the CA assigning errors on the part of the lower court. The
appellate court reversed the lower court’s decision, and upheld the annotation of the levy on
execution on the certificate of title. The respondent appellate court upheld private respondents’
theory when it ruled:
The above staled conclusion of the lower court is based on the premise that the adverse claim
filed by plaintiffs-appellees is still effective despite the lapse of 30 days from the date of
registration. However, under the provisions of Section 70 of P.D. 1529, an adverse claim
shall be effective only for a period of 30 days from the date of its registration.
Hence this petition.
ISSUE:
1. THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY
PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE
INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION IN ITS
ENTIRETY AND TO RECONCILE THE APPARENT INCONSISTENCY WITHIN THE
PROVISION IN ORDER TO GIVE EFFECT TO IT AS A WHOLE.
HELD: ACCORDINGLY, the assailed decision of the respondent CA dated October 17, 1991
is hereby REVERSED and SET ASIDE. The decision of the RTC finding for the cancellation
of the notice of levy on execution from Transfer Certificate of Title No. N-109417 is hereby
REINSTATED. The inscription of the notice of levy on execution on TCT No. N-109417 is
hereby CANCELLED.
The question may be posed, was the adverse claim inscribed in the TCT still in force when
private respondent caused the notice of levy on execution to be registered and annotated in the
said title, considering that more than thirty days had already lapsed since it was annotated ?
(Pilares argues that the adverse claim ceases to have any legal force and effect (30) days
after August 27, 1984 pursuant to Section 70 of P.D. 1529)
In construing the law aforesaid, care should be taken that every part thereof be given effect and
a construction that could render a provision inoperative should be avoided, and inconsistent
provisions should be reconciled whenever possible as parts of a harmonious whole. For taken
in solitude, a word or phrase might easily convey a meaning quite different from the one
actually intended and evident when a word or phrase is considered with those with which it is
associated. In ascertaining the period of effectivity of an inscription of adverse claim, we must
read the law in its entirety. Sentence three, paragraph two of Section 70 of P.D. 1529 provides:
“The adverse claim shall be effective for a period of thirty days from the date of registration.”
At first blush, the provision in question would seem to restrict the effectivity of the adverse
claim to thirty days. But the above provision cannot and should not be treated separately,
but should be read in relation to the sentence following, which reads:
After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of
a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the
lapse of thirty days, then it would not have been necessary to include the foregoing caveat to
clarify and complete the rule. For then, no adverse claim need be cancelled. If it has been
automatically terminated by mere lapse of time, the law would not have required the party in
interest to do a useless act. The law, taken together, simply means that the cancellation of the
adverse claim is still necessary to render it ineffective, otherwise, the inscription will remain
annotated and shall continue as a lien upon the property.
To hold otherwise would be to deprive petitioners of their property, who waited a long time to
complete payments on their property, convinced that their interest was amply protected by the
inscribed adverse claim.
In sum, the disputed inscription of an adverse claim on the TCT No. N-79073 was still in effect
on February 12, 1985 when Quezon City Sheriff Roberto Garcia annotated the notice of levy
on execution thereto. Consequently, he is charged with knowledge that the property sought to
be levied upon the execution was encumbered by an interest the same as or better than that of
the registered owner thereof. Such notice of levy cannot prevail over the existing adverse claim
inscribed on the certificate of title in favor of the petitioners
NOTES:
1. Concededly, annotation of an adverse claim is a measure designed to protect the interest of
a person over a piece of real property where the registration of such interest or right not
otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property
Registration Decree), and serves a warning to third parties dealing with said property that
someone is claiming an interest on the same or a better right than that of the registered owner
thereof. Such notice is registered by filing a sworn statement with the Register of Deeds of the
province where the property is located, setting forth the basis of the claimed right together with
other dates pertinent thereto.
2. Under the Torrens system, registration is the operative act which gives validity to the transfer
or creates a lien upon the land. A person dealing with registered land is not required to go behind
the register to determine the condition of the property. He is only charged with notice of the
burdens on the property which are noted on the face of the register or certificate of title, but
nevertheless he is bound by the liens and encumbrances annotated thereon. One who buys
without checking the vendor’s title takes all the risks and losses consequent to such failure
3. A subsequent sale of property covered by a Certificate of Title cannot prevail over an adverse
claim, duly sworn to and annotated on the certificate of title previous to the sale.
4. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with
the Register of Deeds a sworn petition to that effect
1. As to whether or not the petitioners are buyers in good faith of the subject property, the same
should be made to rest on the findings of the trial court. As pointedly observed by the appellate
court, “there is no question that plaintiffs-appellees were not aware of the pending case filed by
Pilares against Uychocde at the time of the sale of the property by the latter in their favor.” This
was clearly elicited from the testimony of Conchita Sajonas, wife of plaintiff, during cross-
examination
A purchaser in good faith and for value is one who buys property of another without notice that
some other person has a right to or interest in such property and pays a full and fair price for
the same, at the time of such purchase, or before he has notice of the claims or interest of some
other person in the property. Good faith consists in an honest intention to abstain from taking
an unconscientious advantage of another, Thus, the claim of the private respondent that the
sale executed by the spouses was made in fraud of creditors has no basis in fact, there being no
evidence that the petitioners had any knowledge or notice of the debt of the Uychocdes in favor
of the private respondent, nor of any claim by the latter over the Uychocdes’ properties or that
the same was involved in any litigation between said spouses and the private respondent. While
it may be stated that good faith is presumed, conversely, bad faith must be established by
competent proof by the party alleging the same. Sans such proof, the petitioners are deemed to
be purchasers in good faith, and their interest in the subject property must not be disturbed.
6. At any rate, the Land Registration Act (Property Registration Decree) guarantees to every
purchaser of registered land in good faith that they can take and hold the same free from any
and all prior claims, liens an encumbrances except those set forth on the Certificate of Title and
those expressly mentioned in the ACT as having been reserved against it. Otherwise, the
efficacy of the conclusiveness of the Certificate of Title which the Torrens system seeks to
insure would be futile and nugatory.
121. Flor Martinez v. Ernesto G. Garcia
Facts:
Edilberto Brua was the registered owner of a parcel of land covered by TCT 346026. The
property was first mortgaged to the GSIS, and such was annotated at the back of the TCT as
Entry No. 91370. Respondent Brua obtained a loan from his brother-in-law, Ernesto Garcia
(P150,000.00) and, to secure the payment, Brua mortgaged the property to Garcia, as evidenced
by a Deed of Real Estate Mortgage executed in Garcia’s favor. Since the title to the property
was with the GSIS and Garcia could not register the Deed of Real Estate Mortgage, he
then executed an Affidavit of Adverse Claim and registered it with the ROD as Entry No.
49853/T-34026 which remained uncanceled.
Brua requested Garcia to pay the former’s loan with the GSIS, so that the title would be
released. Garcia paid the GSIS P400,000.00 and the title was released to him.
A Deed of Absolute Sale was executed between Garcia and Brua over the property where Brua
sold the property in the amount of P705,000.00. In the same deed, it was stated that the
property was only a partial payment of Brua’s mortgage indebtedness to Garcia, which
he could No. longer redeem from the latter. Garcia registered the Deed of Sale with the ROD
and a new TCT was issued in the names of Garcia and his wife. However, the annotations at
the back of the previous title were carried over the the new title, to wit: Entry No. 56837, a
Notice of Levy on Attachment and/or Levy inscribed; Entry No. 2881 showing a Notice of
Levy on Execution in favor of petitioner Flor Martinez; Entry No. 3706, which was a Certificate
of Sale in favor of petitioner; Entry No. 72854, which was a Notice of Levy on Execution in
favor of Pilipinas Bank; and Entry No. 16611, which was the cancellation of Brua’s mortgage
with the GSIS.
It appeared that the annotations in favor of petitioner were all made in connection with
petitioner’s action for Collection of Sum of Money, which she filed against Brua to pay the
former the amount of P244,594.10, representing the value of dishonored checks plus 12%
interest per annum as damages and premium paid by petitioner for the attachment bond. The
decision became final and executory as Brua failed to appeal the same, and a notice of levy oon
execution was issued. A public auction was conducted, where the subject property was awarded
to Martinez as the sole bidder in the amount of P10,000.00, and a Certificate of Sale was issued
in her favor.
The annoation of Pilipinas Bank’s Notice of Levy on Execution was by virtue of a civil case by
Filipinas Manufacturer’s Bank, now known as Pilipinas Bank, against Brua.
Garcia and Brua filed an Action to Quiet Title, initially against Martinez due to the
encumbrances/liens annotated on respondent Garcia’s new title. They contended that these were
registered subsequent to the annotation of Garcia’s adverse claim and prayed that these be
canceled. The complaint was amended to include Pilipinas Bank as an additional defendant.
Ruling of the RTC:
Dismissed Garcia’s action for quieting of title. It found that the adverse claim which Garcia
caused to be annotated on the previous title was predicated on his interest as a mortgagee of a
load which he extended to Brua; that Garcia’s adverse interest was merely that of a second
mortgagee, as he was not yet the purchaser of the property; that when the judicial liens were
caused to be registered by petitioner on Brua’s title, by virtue of petitioner being adjudged
judgement creditor, Garcia’s claim became inferior to that of petitioner.
Garcia’s inaction to preserve his adverse claim as a second mortgagee and his sudden decision
to redeem and purchase the second property from GSIS showed bad faith; that respondent Brua
did not even testify or participate in the case, except when he was impleaded as a plaintiff in
the case. The RTC did not give credit to Garcia’s claim that he and Brua had no prior knowledge
of the occurrence of a public auction and the consequent annotation of the certificate of sale,
and found Garcia to be a buyer in bad faith.
Ruling of the CA:
Reversed and set aside the RTC decision. It ruled that a subsequent sale of property covered by
a COT cannot prevail over an adverse claim, duly sworn to and annotated on the COT previous
to the sale; that while one who buys a property from the registered owner need not look behind
the title, he is nevertheless bound by the liens and encumbrances annotated thereon; and thus
one who buys without checking the vendor’s title takes all the risks and losses consequent to
such failure. In order to protect his interest, Garcia executed an Affidavit of Adverse Claim,
annotated it on the title of the property and it has remained uncanceled up to this time; that such
adverse claim was registered prior to the inscription of the Certificate of Sale in favor of
petitioner.
Issue/s:
WON there was grave abuse of discretion amounting to lack or excess of jurisdiction committed
by the CA.
Petitioner’s Argument:
Garcia’s adverse claim is nothing but a notice that he has an interest adverse to that of
respondent Brua; that the adverse claim cannot be said to be superior to a final sale conducted
by the sheriff by authority of the court pursuant to a judgment that has attained finality.
Ruling of the SC:
They dismissed the petition.
The levy does not make the judgment creditor the owner of the property levied upon. He merely
obtains a lien. Such levy on execution is subject and subordinate to all valid claims and liens
existing against the property at the time the execution lien attached, such as real estate
mortgages.
Garcia’s adverse claim, which refers to the deed of mortgage executed by Brua, was annotated
on respondent Brua’s title registered with the ROD. The adverse claim was already existing
when the Notice of Levy on Execution, as well as the Certificate of Sale was inscribed; and
hence, the adverse claim is sufficient to constitute constructive notice to petitioner regarding
the subject property. When petitioner registered her Notice of Levy on Execution on the title,
she was charged with the 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.
No grave abuse of discretion was committed by the CA.
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 LRA, 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.
Petitioner cannot be considered as a buyer in good faith. A purchaser in good faith and for value
is one who buys the 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 purchase, or
before he has notice of the claims or interest of some other person in the property.
Garcia caused the annotation of his adverse claim only as a mortgagee of respondent Brua. The
subsequent deed of sale was executed in 1991 between respondent’s Garcia and Brua after the
former paid the latter’s loan from eith the GSIS. When a new title was issued in Garcia’s name,
the notice of levy on execution and the certificate of sale were already annotated on the title of
the property; and thus, the sale in favor of Garcia could not prevail over the previous auction
sale in petitioner’s favor.
The adverse claim of respondent Garcia based on the Deed of Mortgage executed by respondent
Brua over the subject land in the former’s favor was existing when the Notice of Levy on
Execution was inscribed in favor of petitioner. It was clearly stated in the deed that the property
was only a partial payment for Brua’s mortgage indebtedness to respondent Garcia, which the
former could no longer redeem from the latter. The sale of the property was by reason of Brua’s
prior load from Garcia, which was secured by a mortgage; and this mortgage was registered
and already existing on the title of the property when the Notice of Levy on Execution and
Certificate of Sale in favor of petitioner were inscribed thereon. Thus, petitioner’s claim over
the subject property must yield to the earlier encumbrance registered by Garcia.