8 LOZANO vs BALLESTEROS.

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LTD – Module 7 – by MBC

8. Dario N. LOZANO, in his capacity as administrator of the estate of the deceased Agusto N.
Lozano, Patrocinio Del Prado And Antonio Lozano , plaintiffs-appellants, vs.
Ignacio BALLESTEROS , defendant-appellee.
G.R. No. L-49470, 1991 April 8

FACTS:
Maria Nieves Tuazon was the original registered exclusive owner of Lots Q,B and O with
Original Certificate of Title No. 46076. Lot Q, which is the land in question was sold to Marciana
de Dios on March 6, 1958 by virtue of a deed of absolute sale. Maria Nieves Tuazon was the
deceased mother of the plaintiffs.
On June 2, 1958, the Lozano’s (plaintiffs-appellants) together with Marciana de Dios filed
before the Court of First Instance (CFI), Pangasinan the approval of the consolidation-subdivision
plan and for the annotation of several documents at the back of the OCT No. 46076. The court
approved this petition and directed the inscription of said deed of sale at the back of the title.
On January 22, 1963, plaintiffs caused the annotation of their adverse claim at the back
of the title of the said lot.
On August 25, 1966, Marciana de Dios sold lot Q to Ignacio Ballesteros (defendant-
appellee) and Transfer Certificate of Title was later transferred in his name.
On September 21, 1966 plaintiffs filed an action for reconveyance against Marciana de
Dios claiming that Augusto Lozano is the absolute owner of Lots Q, O and B. The court rendered
a default decision in favor of the plaintiffs on June 8, 1967.
Because the plaintiffs failed to effect the recovery and/or the reconveyance of the lots,
they filed several complaints before the CFI of Pangasinan for reconveyance and recovery of
possession. The decision of the trial court was in favor of the defendant. The plaintiffs made an
appeal to the Court of Appeals, but its resolution ruled that it is beyond its jurisdiction. Thus, the
records of the case were elevated to the Supreme Court.

ISSUE:
Whether or not the lower court erred in not declaring Ignacio Ballesteros as a purchaser
in bad faith as he has knowledge of the Lozano’s claims against Marciana De Dios.

HELD:
NO. The lower court did not err in not declaring Ignacio Ballesteros as purchaser in bad
faith.
The appellee stresses that "a cursory examination of the adverse claim filed by the
plaintiffs-appellants . . . readily reveals that the same has failed to comply with the formal
requirements of Section 110 of Act 496 with respect to adverse claims. And for which, and for all
legal purposes, the adverse claim under comment is not valid and effective." Furthermore,
appellee "submits that the protection given by the law to adverse claimants in regard to the
property subject to an adverse claim is available only to the party whose registered adverse
claim meets all the formal requisites of law, and not when the same is a nullity." Hence, appellee
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concludes that "an invalid and ineffective adverse claim cannot validly serve as a notice or
warning to third parties who may deal with the properties subject thereto because such
adverse claim by reason of its nullity is deemed not existent and unregistered."
Despite the appellee's alleged knowledge of the appellants' claims against De Dios, we
still find the allegation of bad faith on the part of the appellee devoid of merit. It should be
stressed that bad faith is inconsequential because of the ineffectiveness of the adverse claim.

PRINCIPLES AND ANALYSIS:

Section 70 of PD 1529:
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 the 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 of 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.
01. Adverse claim, purpose.
The purpose of annotating the adverse claim on the title of the disputed land is to
inform third persons that there is a controversy over the ownership of the land.
Cf. Lozano vs Ballesteros
As reflected in the case above, the Lozanos caused the annotation of their adverse claim
at the back of the title of the said lot before It was sold to Ballesteros, but defendant Ballesteros
through a cursory examination found out that plaintiffs failed to comply with the formal
requirements of Section 110 of Act 496 with respect to adverse claims.
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02. Requisites of an adverse claim.

The following are the formal requisites of an adverse claim:
1. The adverse claimant must state the following in writing:
(a) his alleged right or interest;
(b) how and under whom such alleged right or interest is acquired;
(c) the description of the land in which the right or interest is claimed; and
(d) the number of the certificate of title;
2. The statement must be signed and sworn to before a notary public or other officer
authorized to administer oath; and
3. The claimant should state his residence or the place to which all notices may be
served upon him.
Non-compliance with the above requisites renders the adverse claim non-
registrable and ineffective.
Cf. Lozano vs Ballesteros
Pertaining to the case above, even if the plaintiffs Lozano alleged defendant Ballesteros
as a purchaser in bad faith, it is still not important because of the ineffectiveness of the adverse
claim as clearly, the plaintiffs did not comply with the formal requisites of an adverse claim.