MODULE 6

1. Sajonas vs. CA (G.R. No. 102377, July 5, 1996

Sajonas vs. CA (G.R. No. 102377, July 5, 1996 (ANDRIN)

TOPIC ADVERSE CLAIM
FACTS ● Sps. Uychocde sold the parcel of land to Sps. Sajonas on installment basis. Sps. Sajonas caused an annotation
of an adverse claim based on the CTS in 1984. Upon full payment, Uychodes executed a Deed of Sale involving
the property in question. The DOS was registered almost a year after (August 1985).
● In 1980, Pilares entered into a compromise agreement with the Uychodes over a monetary obligation payable
in 2 years. Uychocdes failed to comply. Hence, Pilares move for the issuance in a writ of execution to enforce
the obligation. Pursuant to such, a notice of levy on execution was issued.
● In February 1985, sheriff presented the notice of levy with the RD and the same was annotated on the subject
property.
● Upon registration of the DOS, the TCT of Uychodes was cancelled and another was issued in the name of
Sajonas. The couple then filed for a Third-Party claim. Hence, the auction was not push through.
● Sajonas demanded cancellation, but was despite such, Pilares refused. Hence, filed the instant complaint.
● Lower court rulings:
○ RTC – favor Sajonas. Held:
■ Although notice of Levy was still in Uychocdes name, an adverse claim was annotated.
■ Sajonas are buyers in good faith.
○ CA – reversed the decision and upheld the annotation.
ARGUMENTS Respondents argue that the NOAC is only good for 30 days. It had long expired when the levy was made. Hence, it
was no longer binding and that the sale made in their favor was done in order to defraud creditors. This was upheld
by the CA.
ISSUES 1. WON the NOAC was still in force when the 30-day validity period has lapsed when respondents cause a NOL?
2. WON the petitioners are buyers in good faith of the subject property?
RULING WON the NOAC was still in force when the 30-day validity period has lapsed when respondents cause a
NOL?
The court held that the provision in question would seem to restrict the effectivity of the adverse claim to thirty days.
But it cannot and should not be treated separately, but should be read in relation to the sentence following which
reads that 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.
BECAUSE 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.
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. 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
may not order the cancellation of an adverse claim, notwithstanding 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.
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. 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.
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 as 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".
In sum the disputed inscription of adverse claim was still in effect when Sheriff annotated the notice of levy on execution
thereto. Consequently, he is 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 petitioners. 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.

WON the petitioners are buyers in good faith of the subject property?
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.
 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 any 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
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 and encumbrances except
those set forth on the Certificate of Title and those expressly mentioned in the ACT as having been preserved 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.

2. Rodriguez vs. CA (G.R. No. 142687, July 20, 2006)

Rodriguez vs. CA (G.R. No. 142687, July 20, 2006) (ANDRIN)

TOPIC ADVERSE CLAIM
FACTS
● Respondents were owners of a house and lot. This property was mortgaged to DBP, which was absorbed by
Pag-ibig.
● Respondent-owners (Calingo) entered into a contract of sale with an assumption of mortgage with
Respondent-buyers (Barrameda). The former sold the property to the latter. The latter assumed payment of
a loan balance to DBP.
● In a letter, Calingo informed Pagibig about the said sale with assumption of mortgage in April 1992 but was
only served October 1992.
● Barrameda filed with the RD an affidavit of adverse claim on the property. It wrote to Pag-ibig informing them
that they have purchased the subject property and that they filed a notice of adverse claim over it. It also
sought assistance for the full settlement of the loan and the transfer property in their names.
● Barrameda moved into the property.
● July 1992 – a notice of levy with attachment on real property was annotated by herein petitioners. Its counsel
sent a letter to Barrameda inquiring about the basis of their occupation of the property.
● August 1992 – Barrameda remitted the complete payment of the purchase price which was acknowledged by
Calingo and guaranteed that the property was clear and free from any liens and encumbrances, except the
real estate mortgage assumed.
● October 1992 – 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 and have registered an adverse claim. It
claimed that the RTC sheriff levied the property despite their adverse claim and the adverse claim was done
long before a levy was made. Thus, the levy is illegal. They served a copy of it to petitioners’ counsel.
● 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 HDMF show that the property is owned by the Calingo.
● November 1992- Barrameda found a Notice of Sheriff's Sale posted on their front gate, announcing the auction
sale of their house. Hence, it filed a petition for quieting of title with prayer for preliminary injunction, notice
of levy be cancelled and they be declared lawful owners.
● Lower court rulings:
○ RTC – ruled in favor of petitioners.
■ 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 should have
registered the title in their names.
○ CA – reversed the ruling. Citing Sajonas v. CA.
■ Respondents Barrameda's adverse claim inscribed on the certificate of title was still effective
at the time the property was levied on execution. The notice of levy could not prevail over
respondents Barrameda's adverse claim.
ARGUMENTS Petitioners 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. The affidavit of adverse claim was not sufficient to establish their
claim to the property. And that there was collusion between respondents Barrameda and Calingo.
ISSUES 1. WON 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?
2. WON the adverse claim is sufficient to bind third parties such as herein petitioners?
RULING WON 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?
NO. The Property Registration Decree requires that such document be registered with the Register of Deeds in order
to be binding on third persons provides as rule that, 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.
In the case at bar, the deed of sale with assumption of mortgage was not registered, but instead, respondents
Barrameda filed an affidavit of adverse claim with the Register of Deeds.

WON the adverse claim is sufficient to bind third parties such as herein petitioners?
 NO. The remedy of adverse claim cannot substitute for registration.

In L.P. Leviste and Company, Inc. v. Noblejas the court explained when an inscription of an adverse claim is
sufficient to affect third parties, this is 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.

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 HDMF. It was not shown, however, that
either respondents exerted any effort to retrieve the owner's duplicate copy from the HDMF 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 HDMF 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. Calingo, as party to the contract of mortgage, are charged with the knowledge of such provision
and are bound to comply therewith. Here, there was a haste in disposing of the property when Calingo informed HDMF
only after the said sale. There was no reason for the parties' failure to seek the approval of the HDMF to the sale as it
appears from the letter of Barrameda to HDMF that they were ready to pay in full the balance of the loan plus interest.

What the court suspects is that the judgement of levy was rendered before the sale of property. They find it unsettling
that 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 the property in July of the same year.
As a rule, any prudent buyer of real property, before parting with his money, is expected to first ensure that the title
to the property he is about to purchase is clear and free from any liabilities and that the sellers have the proper
authority to deal on the property.

Again, the court stresses that the annotation of an adverse claim is a measure designed to protect the interest of a
person over a piece of property where the registration of such interest or right is not otherwise provided for
by the law on registration of real property. In the case at bar, 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 registered with the Office of the Register of Deeds. It was not shown in this case that there was justifiable reason
why the deed could not be registered. Hence, the remedy of adverse claim cannot substitute for registration.

3. Golden Haven Memorial Park vs. Filinvest (G.R. No. 188265)

Golden Haven Memorial Park vs. Filinvest (G.R. No. 188265) (ANDRIN)
TOPIC ADVERSE CLAIM
FACTS ● Yap and relatives (Vivar, Cruz, Aquino, Corpuz and Sobremesana) inherited a parcel of land. The heirs had
the land divided into 13 lots. The partition is as follows:
○ Aquino – Lots 1and 12
○ Corpuz and Sobremesana – Lot 2
○ Yap, Cruz, Vivars – Lot 6
● Yap executed an agreement in favor of Golden Haven Memorial Park payable in 3 installments.
● Aquino acting for himself, Corpuz and Sobremesana executed an agreement in favor of GHM to sell lots 1,2,
and 12 same manner of payment with Yap.
● GHM paid the first installment upon execution of the contract for both. GHM then annotated a Notice of
Adverse Claim on the TCTs.
● Later on, the sellers asked if GHM was still interested. GHM replied in affirmative saying it was just waiting
for the titles so it can pay the 2nd installment.
● Sometime, Filinvest applied for a transfer of its name on titles Lots 2, 4, and 5 but was declined.
● Upon inquiry, Filinvest learned that Lot 8, a lot belonging to some other heir or heirs and covered by the
same mother title, had been sold to Household Development Corporation (HDC), a sister company of GHM,
and HDC held the owner's duplicate copy of that title.
● Filinvest immediately filed against HDC a petition for the surrender and cancellation of the co-owners'
duplicate copy. It alleged that it bought Lots 1, 2, 6, and 12 of the property from their respective owners as
evidenced by three deeds of absolute sale in its favor.
● GHM, on the other hand, filed against the sellers and Filinvest a complaint for the annulment of the deeds
of sale issued in the latter's favor.
● Lower court rulings:
○ RTC – The CTS in favor of GHM is valid and enforceable.
○ CA – affirmed RTC decision with respect only to Lot 6.
ARGUMENTS Filinvest: Although the title carried a notice of adverse claim, the notice was only with respect to Yap’s interest in Lot
6 and it did not affect the other lots and the remaining interest in lot 6.
ISSUES WON the contracts to sell that the sellers executed in GHM’s favor covering the same lots sold to Filinvest valid and
enforceable?
RULING YES.

Principle:
 ● To prove good faith, the rule is that the buyer of registered land needs only show that he relied on the title
that covers the property. But this is true only when, at the time of the sale, the buyer was unaware of any
adverse claim to the property. Otherwise, the law requires the buyer to exercise a higher degree of diligence
before proceeding with his purchase. He must examine not only the certificate of title, but also the seller's
right and capacity to transfer any interest in the property. In such a situation, the buyer must show that he
exercised reasonable precaution by inquiring beyond the four corners of the title. Failing in these, he may be
deemed a buyer in bad faith.
● The annotation of an adverse claim is intended to protect the claimant's interest in the property. The notice
is a warning to third parties dealing with the property that someone claims an interest in it or asserts a better
right than the registered owner. Such notice constitutes, by operation of law, notice to the whole world.
● One who has knowledge of facts which should have put him upon such inquiry and investigation cannot claim
that he has acquired title to the property in good faith as against the true owner of the land or of an interest
in it.
Application:
● Here, Filinvest was already on notice that GHM had a notice of adverse claim on its mother title.
● Here, although the notice of adverse claim pertained to only one lot and Filinvest wanted to acquire interest
in some other lots under the same title, the notice served as warning to it that one of the owners was engaged
in double selling. Moreover, upon inquiry with the RD, Filinvest also learned that the heirs of Andres Aldana
sold Lot 8 to HDC and turned over the co-owner's duplicate copy to that company which had since then kept
the title.
● Filinvest's knowledge that GHM, a competitor, had bought Lot 6 in which Filinvest was interested, that GHM
had annotated an adverse claim to that Lot 6, and that GHM had physical possession of the title, should have
put Filinvest on its toes regarding the prospects it faced if it bought the other lots covered by the title in
question. Filinvest should have investigated the true status of Lots 1, 2, 6, and 12 by asking GHM the size
and shape of its interest in the lands covered by the same title, especially since both companies were engaged
in the business of developing lands.

Hence, the court upheld the validity of the contract between GHM and the sellers.

4. Martinez vs. Garcia (G.R. No. 166356, Feb. 4, 2010)

Martinez vs. Garcia (G.R. No. 166356, Feb. 4, 2010) (ANDRIN)

TOPIC ADVERSE CLAIM
FACTS ● Brua was the registered owner of a parcel of land. The property was first mortgaged with GSIS which was
annotated in its TCT. Brua obtained a loan from Garcia, his brother in law. To secure payment, he mortgaged
the said property evidenced by a Deed of Real Estate Mortgage.
● The title to the property was in possession of GSIS and Garcia could not register its Deed of Real estate
mortgage so he executed an affidavit of adverse claim.
● Brua then requested Garcia to pay the former’s loan with GSIS to that the title would be released. So, Garcia
paid the amount and thus, the title was released to him. Later on, a sale was executed over the property
between Garcia and Brua. And have it registered with RD.
● However, the annotations at the back of the title were carried to the new title.
● A Notice of Levy on Attachment and/or Levy, Notice of Levy on Execution, and Certificate of Sale, in favor of
Martinez, were all made in connection with Martinez's action for Collection of Sum of Money, which she filed
against Brua at the RTC of Makati. In that case, a decision was rendered in favor of Martinez, where the
RTC ordered Brua to pay the former the amount of P244,594.10, representing the value of the dishonored
checks. The decision became final and executory as Brua failed to appeal the same, and a notice of levy on
execution was issued. A public auction was subsequently conducted, where the property was awarded to
Martinez as the sole bidder.
● Garcia and Brua filed with the RTC of Pasig an Action to Quiet Title. RTC rendered its decision dismissing
Garcia's action for quieting of title. RTC found that the adverse claim which Garcia caused to be annotated on
the previous title of the property was predicated on a mortgage because when the adverse claim was
annotated he was not yet the purchaser. And when the judicial liens were annotated, Garcia’s claim became
inferior over the Martinez.
● CA reversed and set aside the RTC decision. The CA said that 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; that while one who buys a property from the registered owner need not have to 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.
PETITIONER
ARGUMENTS 1. That the adverse claim of Garcia is only to the extent secured by a real estate mortgage and cannot be
considered superior to that of a final sale conducted by the sheriff by virtue of a court judgment that has
attained finality.
2. That Sajonas v. CA is not applicable because in Sajonas what was annotated is a contract to sell. Here, it is a
claim of mortgage.
ISSUES 1. WON the adverse claim could be considered superior to that of a final sale conducted by the sheriff by
virtue of a court judgment that has attained finality?
2. WON petitioner cannot be considered as buyer in good faith?
3. WON Sajonas v. CA is applicable in this case?
RULING WON the adverse claim could be considered superior to that of a final sale conducted by the sheriff by
virtue of a court judgment that has attained finality?
 NO. A levy does not make the judgement 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.
In the case at bar, Garcia's adverse claim, which refers to the deed of mortgage executed by Brua in his favor, was
annotated on Brua's title registered with the RD June 23, 1980. The adverse claim was already existing when the
Notice of Levy on Execution, as well as the Certificate of Sale in favor of petitioner, was inscribed. 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 of the subject property, she was charged with the knowledge
that the subject 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. Thus, 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 Land Registration Act or
Act No. 496 (now P.D. No. 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.

WON petitioner cannot be considered as buyer in good faith?

YES. 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 such purchase, or before he has notice of the claims or interest of some
other person in the property. Here, petitioner admitted on cross-examination that when she registered her notice of
attachment in 1981 and the levy on execution on July 11, 1988, she already saw respondent Garcia's adverse claim
inscribed on respondent Brua's title on June 23, 1980.

WON Sajonas v. CA is applicable in this case?

NO. The issue posed in Sajonas was whether the adverse claim inscribed on TCT No. N-190417 was still in force when
private respondent therein caused the annotation of the notice of levy on execution on the title; if the adverse claim
was still in effect, then respondent therein was charged with the knowledge of pre-existing interest over the subject
property and, thus, the Sajonases were entitled to the cancellation of the notice of levy inscribed on the title. The court
ruled in Sajonas that the inscription of the adverse claim on the title of the subject property was still in effect on
February 12, 1985, when the sheriff annotated the notice of levy on execution in favor of respondent therein; that
respondent, therein was charged with knowledge that the subject 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. We then said that such
notice of levy could not prevail over the existing adverse claim inscribed on the certificate of title in favor of the
Sajonases.
In the case at bar, 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. Although the deed of sale between respondents Brua and Garcia was done after the notice of levy
on execution and certificate of sale were inscribed on the title, it was clearly stated in the deed that the subject property
was only a partial payment for respondent Brua's mortgage indebtedness to respondent Garcia, which the former could
no longer redeem from the latter. Thus, the sale of the subject property by respondent Brua to respondent Garcia was
by reason of respondent Brua's prior loan from respondent Garcia, which was secured by a mortgage on the subject
property; and this mortgage was registered and already existing on the title of the subject 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 respondent Garcia.

5. Padilla, Jr. vs. Phil. Producer’s Cooperative (G.R. No. 141256, July 15, 2005)
6. Reyes vs. Tang Soat Ing (G. R.No. 185620, December 14, 2011)
7. Viewmaster Construction vs. Maulit, et.al. (G.R. No.136283, Feb. 29, 2000)
8. Atlantic Erectors, Inc. v s. Herbal Cove Realty (G.R. No. 148568, March 20, 2003)
9. Homeowners Savings vs. Delgado (G. R. No. 189477, February 26, 2014)

Viewmaster Construction v. Maulit, GR No. 189477, (CABASAG)

TOPIC Lis Pendens
FACTS ● Felonia and De Guzman (respondents) were the registered owners of a parcel of land covered by TCT No. T-
402 issued by the register of deeds of Las Piñas City.
● Respondents mortgaged the property to Delgado to secure the loan in the amount of P1,655,000.00. However,
instead of a real estate mortgage, the parties executed a Deed of Absolute Sale with an Option to Repurchase.
● Felonia and De Guzman filed a Reformation case, before the RTC. On the findings that it is "very apparent
that the transaction had between the parties is one of a mortgage and not a deed of sale with right to
repurchase," the RTC rendered a judgment favorable to the respondents.
● Delgado elevated the case to the CA. The CA affirmed the trial court decision.
● In Spite of the pendency of the Reformation case in which she was the defendant, Delgado filed a "Petition
for Consolidation of Ownership of Property Sold with an Option to Repurchase and Issuance of a New
Certificate of Title" (Consolidation case) in the RTC. The RTC ordered the issuance of a new title under
Delgado's name.
● Delgado transferred the title to her name. Hence, TCT No. T-402, registered in the names of Felonia and De
Guzman, was canceled and TCT No. 44848 in the name of Delgado, was issued.
● Aggrieved, Felonia and De Guzman elevated the case to the CA through a Petition for Annulment of Judgment.
● Delgado mortgaged the subject property to Homeowners Savings and Loan Bank using her newly registered
title. HSLB caused the annotation of the mortgage. Respondents caused the annotation of a Notice of Lis
Pendens on Delgado's title.
● November 1997- HSLB foreclosed the subject property and later consolidated ownership in its favor, causing
the issuance of a new title in its name, TCT No. 64668.
 ● The CA annulled and set aside the decision of the RTC, Las Piñas City in the Consolidation case. The decision
of the CA, declaring Felonia and De Guzman as the absolute owners of the subject property and ordering the
cancellation of Delgado's title, became final and executory.
● Respondents, claiming to be the absolute owners of the subject property, instituted the instant complaint
against Delgado, HSLB, RD of Las Piñas City before the RTC for Nullity of Mortgage and Foreclosure Sale,
Annulment of Titles of Delgado and HSLB, and finally, Reconveyance of Possession and Ownership of the
subject property in their favor.
● RTC ruled in favor of Felonia and De Guzman as the absolute owners of the subject property. On appeal, the
CA affirmed with modifications the trial court decision.
ARGUMENTS PETITIONER (HSLB)
- HSLB asserted that Felonia and De Guzman are barred from laches as they had slept on their rights to timely
annotate, by way of Notice of Lis Pendens, the pendency of the Reformation case. HSLB also claimed that it
should not be bound by the decisions of the CA in the Reformation and Consolidation cases
- petitioners pray that the decision of the CA be modified "to the effect that the mortgage lien in favor of
petitioner HSLB annotated as entry No. 4708-12 on TCT No. 44848 be carried over on TCT No. T-402 after it
is reinstated in the name of Felonia and De Guzman."

RESPONDENT ( Felonia and De Guzman)

- the transaction had between the parties is one of a mortgage and not a deed of sale with right to repurchase
- claiming to be the absolute owners of the subject property
ISSUES W/N HSLB is a mortgagee and a purchaser in good faith
RULING ● We cannot grant the prayer of petitioner. The priorly registered mortgage lien of HSLB is now worthless.
● Arguably, HSLB was initially a mortgagee in good faith. In Bank of Commerce v. San Pablo, Jr., the doctrine
of mortgagee in good faith was explained:

There is, however, a situation where, despite the fact that the mortgagor is not the owner of the
mortgaged property, his title being fraudulent, the mortgage contract and any foreclosure sale
arising there from are given effect by reason of public policy. This is the doctrine of "the mortgagee
in good faith" based on the rule that all persons dealing with property covered by the Torrens Certificates
of Title, as buyers or mortgagees, are not required to go beyond what appears on the face of the title. The
public interest in upholding indefeasibility of a certificate of title, as evidence of lawful ownership of the land
or of any encumbrance thereon, protects a buyer or mortgagee who, in good faith, relied upon what appears
on the face of the certificate of title.

● When the property was mortgaged to HSLB, the registered owner of the subject property was Delgado who
had in her name TCT No. 44848. HSLB cannot be faulted in relying on the face of Delgado's title. The records
indicate that Delgado was at the time of the mortgage in possession of the subject property and Delgado's
title did not contain any annotation that would arouse HSLB's suspicion. HSLB, as a mortgagee, had a right
to rely in good faith on Delgado's title, and in the absence of any sign that might arouse suspicion, HSLB had
no obligation to undertake further investigation.
● However, the rights of the parties to the present case are defined not by the determination of whether or not
HSLB is a mortgagee in good faith, but of whether or not HSLB is a purchaser in good faith. And, HSLB is
not such a purchaser.
● A purchaser in good faith is defined as one who buys a property without notice that some other person
has a right to, or interest in, the property and pays full and fair price at the time of purchase or before he has
notice of the claim or interest of other persons in the property. When a prospective buyer is faced with facts
and circumstances as to arouse his suspicion, he must take precautionary steps to qualify as a purchaser in
good faith.
● In the case at bar, HSLB utterly failed to take the necessary precautions. At the time the subject property was
mortgaged, there was yet no annotated Notice of Lis Pendens. However, at the time HSLB purchased the
subject property, the Notice of Lis Pendens was already annotated on the title.
● Lis pendens is a Latin term which literally means, "a pending suit or a pending litigation" while a notice
of lis pendens is an announcement to the whole world that a real property is in litigation, serving
as a warning that anyone who acquires an interest over the property does so at his/her own risk, or that
he/she gambles on the result of the litigation over the property. It is a warning to prospective buyers to take
precautions and investigate the pending litigation.
● The purpose of a notice of lis pendens is to protect the rights of the registrant while the case is
pending resolution or decision. With the notice of lis pendens duly recorded and remaining uncancelled, the
registrant could rest secure that he/she will not lose the property or any part thereof during litigation.
● 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 Court's jurisdiction until the judgment or the
decree have been entered; otherwise, by successive alienations pending the litigation, its judgment or decree
shall be rendered abortive and impossible of execution.
● At the time HSLB bought the subject property, HSLB had actual knowledge of the annotated Notice of
Lis Pendens. HSLB continued with the purchase knowing the legal repercussions a notice of lis pendens
entails. As correctly found by the CA, "the notice of lis pendens was annotated on 14 September 1995,
whereas the foreclosure sale, where the appellant was declared as the highest bidder, took place sometime
in 1997. There is no doubt that at the time appellant purchased the subject property, it was aware
of the pending litigation concerning the same property.
● The subject of the lis pendens on the title of HSLB's vendor, Delgado, is the "Reformation case"
filed against Delgado by the herein respondents. The case was decided with finality by the CA in favor
of herein respondents. The contract of sale in favor of Delgado was ordered reformed into a contract of
mortgage. By final decision of the CA, HSLB's vendor, Delgado, is not the property owner but only a
mortgagee. As it turned out, Delgado could not have constituted a valid mortgage on the property. That the
mortgagor be the absolute owner of the thing mortgaged is an essential requisite of a contract of mortgage.
 ● Insofar as the HSLB is concerned, there is no longer any public interest in upholding the indefeasibility of the
certificate of title of its mortgagor, Delgado. Such title has been nullified in a decision that had become final
and executory. Its own title, derived from the foreclosure of Delgado's mortgage in its favor, has likewise
been nullified in the very same decision that restored the certificate of title in respondents' name.

10. Casim vs. RD of Las Pinas (G.R. No.168655, July 2, 2010)

Casim v. RD Las Pinas, GR No. 168655, (CABASAG)

TOPIC Lis Pendens
FACTS ● Petitioner is a duly organized domestic corporation in whose name TCT No. 49936 was registered. Petitioner
acquired the covered property by virtue of a Deed of Absolute Sale and as a result the mother title, TCT No.
30459 was cancelled and TCT No. 49936 was issued in its stead.
● Petitioner filed with the RTC an original petition for the cancellation of the notice of lis pendens, as well as of
all the other entries of involuntary encumbrances annotated on the original copy of TCT No. 49936. Petitioner
prayed that the notice of lis pendens as well as all the other annotations on the said title be cancelled.
● Petitioner claimed that its owner's duplicate copy of the TCT was clean at the time of its delivery and that it
was surprised to learn later on that the original copy of its TCT, on file with the Register of Deeds, contained
several entries which all signified that the covered property had been subjected to various claims. The subject
notice of lis pendens is one of such entries.
● To justify the cancellation, petitioner alleged that the notice of lis pendens was a forgery due to the
inconsistencies in the inscriber's signature as well as from the fact that the notice was entered non-
chronologically, that is, the date thereof is much earlier than that of the preceding entry. In this regard, it
noted the lack of any transaction record on file with the Register of Deeds that would support the notice of
lis pendens annotation.
● The Intestate Estate of Bruneo F. Casim, representing Bruneo F. Casim, intervened in the instant case and
filed a Comment/Opposition in which it maintained that the RTC of Las Piñas did not have jurisdiction over
the present action because the matter of canceling a notice of lis pendens lies within the jurisdiction of the
court before which the main action referred to in the notice is pending.
● In this regard, it emphasized that the case referred to in the said notice had already attained finality as the
Supreme Court had issued an entry of judgment therein and that the RTC of Makati City had ordered execution
in that case. It cited the lack of legal basis for the petition in that nothing in the allegations hints at any of
the legal grounds for the cancellation of notice of lis pendens.
● The trial court, ruling that it did not have jurisdiction, resolved to dismiss the petition and declared that the
action must have been filed before the same court and in the same action in relation to which the annotation
of the notice of lis pendens had been sought.
● The trial court pointed out that not only did petitioner resort to the wrong forum to determine the existence
of forgery, but also that forgery could not be presumed merely from the alleged non-chronological entries in
the TCT but instead must be positively proved.

ARGUMENTS Petitioner
- the notice of lis pendens was a forgery due to the inconsistencies in the inscriber's signature
- the notice was entered non-chronologically, that is, the date thereof is much earlier than that of the preceding
entry. it noted the lack of any transaction record on file with the Register of Deeds that would support the
notice of lis pendens annotation.
- An action for cancellation of notice of lis pendens, petitioner believes, is not always ancillary to an existing
main action because a trial court has the inherent power to cause such cancellation, especially in this case
that petitioner was never a party to the litigation to which the notice of lis pendens relates.
- the trial court has committed an error in declining to rule on the allegation of forgery, especially since there
is no transaction record on file with the Register of Deeds relative to said entries.
- TCT No. 49936 is indefeasible and holds it free from any liens and encumbrances which its mother title, TCT
No. 30459, might have suffered.
- the notion that forgery of the notice of lis pendens suffices as a ground for the cancellation thereof which
may be availed of in an independent action by the aggrieved party

Intervenor’s Comments
- as opposed to petitioner's claim that there was no carry-over of encumbrances made in TCT No. 49936 from
the mother title TCT No. 30459, the latter would show that it also had the same inscriptions as those found
in TCT No. 49936 only that they were entered in the original copy on file with the Register of Deeds.
- Also, as per Certification issued by the Register of Deeds, petitioner's claim of lack of transaction record could
not stand, because the said certification stated merely that the corresponding transaction record could no
longer be retrieved and might, therefore, be considered as either lost or destroyed.
- The Intestate Estate of Bruneo F. Casim (intervenor), in its Comment on the present petition, reiterates that
the court a quo does not have jurisdiction to order the cancellation of the subject notice of lis pendens because
it is only the court exercising jurisdiction over the property which may order the same — that is, the court
having jurisdiction over the main action in relation to which the registration of the notice has been sought.
Also, it notes that even on the assumption that the trial court had such jurisdiction, the petition for cancellation
still has no legal basis as petitioner failed to establish the grounds therefor.
ISSUES W/N Whether the RTC of Las Piñas City, Branch 253 has jurisdiction in an original action to cancel the notice of lis
pendens annotated on the subject title as an incident in a previous case
RULING ● Lis pendens — which literally means pending suit — refers to the jurisdiction, power or control
which a court acquires over the property involved in a suit, pending the continuance of the
action, and until final judgment. Founded upon public policy and necessity, lis pendens is intended to
keep the properties in litigation within the power of the court until the litigation is terminated, and to prevent
the defeat of the judgment or decree by subsequent alienation.
 ● Its notice is an announcement to the whole world that a particular 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.
● A notice of lis pendens, once duly registered, may be cancelled by the trial court before which
the action involving the property is pending. This power is said to be inherent in the trial court
and is exercised only under express provisions of law. Accordingly, Section 14, Rule 13 of the
1997 Rules of Civil Procedure authorizes the trial court to cancel a notice of lis pendens where it is properly
shown that the purpose of its annotation is for molesting the adverse party, or that it is not necessary to
protect the rights of the party who caused it to be annotated.
● The power to cancel a notice of lis pendens is exercised only under exceptional circumstances, such as: where
such circumstances are imputable to the party who caused the annotation; where the litigation was unduly
prolonged to the prejudice of the other party because of several continuances procured by petitioner; where
the case which is the basis for the lis pendens notation was dismissed for non prosequitur on the part of the
plaintiff; or where judgment was rendered against the party who caused such a notation. In such instances,
said notice is deemed ipso facto cancelled.
● In theorizing that the RTC of Las Piñas City has the inherent power to cancel the notice of lis pendens that
was incidentally registered in relation to Civil Case which had been decided by the RTC of Makati City, Branch
62 and affirmed by the Supreme Court on appeal, petitioner advocates that the cancellation of such a
notice is not always ancillary to a main action. The argument fails.
● The subject notice of lis pendens had been recorded at the instance of Bruneo F. Casim (Bruneo)
in relation to Civil Case No. 2137 29 — one for annulment of sale and recovery of real property — which he
filed before the RTC of Makati City, Branch 62 against the spouses Jesus and Margarita Casim, predecessors-
in-interest and stockholders of petitioner corporation. That case involved the property subject of the present
case. At the close of the trial on the merits therein, the RTC of Makati rendered a decision adverse to Bruneo
and dismissed the complaint for lack of merit. Aggrieved, Bruneo lodged an appeal with the Court of Appeals
which reversed and set aside the trial court's decision. Expectedly, the spouses Jesus and Margarita Casim
elevated the case to the Supreme Court, but their appeal was dismissed for being filed out of time.
● A necessary incident of registering a notice of lis pendens is that the property covered thereby
is effectively placed, until the litigation attains finality, under the power and control of the court
having jurisdiction over the case to which the notice relates. Parties dealing with the given property are
charged with the knowledge of the existence of the action and are deemed to take the property subject to
the outcome of the litigation. It is also in this sense that the power possessed by a trial court to cancel the
notice of lis pendens is said to be inherent as the same is merely ancillary to the main action.|
● The precautionary notice of lis pendens may be ordered cancelled at any time by the court having jurisdiction
over the main action inasmuch as the same is merely an incident to the said action.
● Clearly, the action for cancellation of the notice of lis pendens in this case must have been filed
not before the court a quo via an original action but rather, before the RTC of Makati City, Branch
62 as an incident of the annulment case in relation to which its registration was sought. Thus, it
is the latter court that has jurisdiction over the main case referred to in the notice and it is that same
court which exercises power and control over the real property subject of the notice.
● The petition could no longer be expected to pursue before the proper forum inasmuch as the decision
rendered in the annulment case has already attained finality before both the Court of Appeals and the
Supreme Court on the appellate level, unless of course there exists substantial and genuine claims against
the parties relative to the main case subject of the notice of lis pendens. There is none in this case. It is thus
well to note that the precautionary notice that has been registered relative to the annulment case then
pending before the RTC of Makati City, Branch 62 has served its purpose. With the finality of the decision
therein on appeal, the notice has already been rendered functus officio. The rights of the parties,
as well as of their successors-in-interest, petitioner included, in relation to the subject property,
are hence to be decided according the said final decision.
● Petitioner is not altogether precluded from pursuing a specific remedy, only that the suitable course of action
legally available is not judicial but rather administrative. Section 77 of P.D. No. 1529 provides the
appropriate measure to have a notice of lis pendens cancelled out from the title, that is by presenting to the
Register of Deeds, after finality of the judgment rendered in the main action, a certificate executed by the
clerk of court before which the main action was pending to the effect that the case has already been finally
decided by the court, stating the manner of the disposal thereof. Section 77 materially states:

SEC. 77.Cancellation of lis pendens. — Before final judgment, 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 registered. It may also
be cancelled by the Register of Deeds upon verified petition of the party who caused the registration thereof.

At any time after final judgment in favor of the defendant, or other disposition of the action such as to
terminate finally all rights of the plaintiff in and to the land and/or buildings involved, in any
case in which a memorandum or notice of lis pendens has been registered as provided in the
preceding section, the notice of lis pendens shall be deemed cancelled upon the registration of
a certificate of the clerk of court in which the action or proceeding was pending stating the
manner of disposal thereof.

11. Pineda Vs. Arcalas (G.R. No. 170172, November 23, 2007)

Pineda v. Arcalas, GR No. 170172, (CABASAG)

TOPIC Levies on Execution
FACTS ● The subject property consists of three parcels of land, which are described as Lot No. 3762-D, Lot No. 3762-
E, and Lot No. 3762-F. These three lots are portions of Lot No. 3762, registered in the name of Spouses
Mauro Lateo and Encarnacion Evangelista (spouses Lateo) under TCT No. T-52319 located at Barrios Duhat
and Labuin, Santa Cruz, Laguna.
 ● A certain Victoria Tolentino bought the said property from the Spouses Lateo. Sometime later, a civil case for
Sum of Money was instituted by Arcalas against Tolentino. This case stemmed from an indebtedness
evidenced by a promissory note and four post-dated checks later dishonored, which Victoria Tolentino owed
Arcalas.
● Sept. 1997-Branch 93 of the Quezon City RTC, rendered judgment in favor of Arcalas and against Victoria
Tolentino.
● Dec. 1977-Pineda bought the subject property from Victoria L. Tolentino. Pineda alleged that upon payment
of the purchase price, she took possession of the subject property by allowing a tenant, Rodrigo Bautista to
cultivate the same. However, Pineda failed to register the subject property under her name.
● To execute the judgment, the Quezon City RTC levied upon the subject property and the Notice of Levy on
Alias Writ of Execution was annotated at the back of TCT No. T-52319.
● Asserting ownership of the subject property, Pineda filed with the Deputy Sheriff of the Quezon City RTC an
Affidavit of Title and Third Party Claim. Arcalas filed a motion to set aside Pineda's Affidavit of Title and Third
Party Claim, which the Quezon City RTC granted.
RTC: Arcalas showed that her levies on the properties were duly registered while the alleged Deed of Absolute
Sale between the defendant Victoria L. Tolentino and Analyn G. Pineda was not. The levies being superior to
the sale claimed by Ms. Pineda, the court rules to quash and set aside her Affidavit of Title and Third Party
Claim.
● After the finality of the Order of the Quezon City RTC quashing Pineda's third-party claim, Pineda filed with
the Office of the Register of Deeds of Laguna another Affidavit of Third Party Claim and caused the inscription
of a notice of adverse claim at the back of TCT No. T-52319.
● Arcalas and Leonardo Byron P. Perez, Jr. purchased Lot No. 3762 at an auction sale conducted by the Deputy
Sheriff of Quezon City. The sale was evidenced by a Sheriff's Certificate of Sale issued on the same day and
registered at the back of TCT No. T-52319.
● Arcalas then filed an action for the cancellation of the entry of Pineda's adverse claim before the Laguna RTC.
The Laguna RTC ordered the cancellation of the Notice of Adverse Claim.
● Pineda appealed the Order of the Laguna RTC before the Court of Appeals under Rule 44 of the Rules of
Court. The appellate court dismissed the appeal and considered it abandoned when Pineda failed to file her
appellant's brief.
● Pineda filed a Motion for Reconsideration but was denied. Pineda filed a Second Motion for Reconsideration,
which was denied because no appellant's brief was attached to either motion for reconsideration.
ARGUMENTS PETITIONER ( Arlyn Pineda)
- contends that her possession of the subject property cures the defect caused by her failure to register the
subject property in her name (inaccurate and inapplicable)
- she is not a party to Civil Case No. Q-96-27884, heard before the Quezon City RTC, and that the levy on the
alias writ of execution cannot affect her purchase of subject property
- Pineda's counsel overlooked the period within which he should file the appellant's brief.
RESPONDENT (Julie Arcalas)

ISSUES Whether the portion bought by Pineda can be exempted from the registered notice of levy (NO)
RULING ● Sections 51 and 52 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree,
provide that:

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 the city where the land lies.

Section 52. Constructive notice upon registration. — Every conveyance, mortgage, lease, lien, attachment,
order, judgment, instrument or entry 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.

● It is clear from these provisions that before a purchaser of land causes the registration of the transfer of the
subject property in her favor, third persons, such as Arcalas, cannot be bound thereby. Insofar as third
persons are concerned, what validly transfers or conveys a person's interest in real property is the registration
of the deed.
● As the deed of sale was unrecorded, it operates merely as a contract between the parties, namely
Victoria Tolentino as seller and Pineda as buyer, which may be enforceable against Victoria Tolentino through
a separate and independent action. On the other hand, Arcalas's lien was registered and annotated at
the back of the title of the subject property and accordingly amounted to a constructive notice
thereof to all persons, whether or not party to the original case filed before the Quezon City RTC.
● The doctrine is well settled that a levy on execution duly registered takes preference over a prior
unregistered sale. A registered lien is entitled to preferential consideration. The Court held that a registered
writ of attachment was a superior lien over that on an unregistered deed of sale. This is so because an
attachment is a proceeding in rem. It is against the particular property, enforceable against the whole
world.
● Notwithstanding the preference given to a registered lien, this Court has made an exception in a case where
a party has actual knowledge of the claimant's actual, open, and notorious possession of the disputed property
 at the time the levy or attachment was registered. In such situations, the actual notice and knowledge of a
prior unregistered interest, not the mere possession of the disputed property, was held to be equivalent to
registration.
● In this case, Pineda did not even allege, much less prove, that Arcalas had actual knowledge of her claim of
ownership and possession of the property at the time the levy was registered. The records fail to show that
Arcalas knew of Pineda's claim of ownership and possession prior to Pineda's filing of her third party claim
before the Quezon City RTC. Hence, the mere possession of the subject property by Pineda, absent any proof
that Arcalas had knowledge of her possession and adverse claim of ownership of the subject property, cannot
be considered as equivalent to registration.

12. Valdevieso vs. Damalerio (G. R. No. 133303, February 17, 2005)

Valdivieso v. Damalerio, GR No. 133303, (CABASAG)

TOPIC Levies on Execution
FACTS ● Bernardo Valdevieso (petitioner) bought from spouses Lorenzo and Elenita Uy a parcel of land, more or less,
located at Bo. Tambler, General Santos City, and covered by Transfer Certificate of Title (TCT) No. T-30586.
● The deed of sale was not registered, nor was the title of the land transferred to petitioner.
● December 1995- the said property was immediately declared by petitioner for taxation purposes as Tax
Declaration No. 16205 with the City Assessor's Office.
● April 1996- spouses Candelario and Aurea Damalerio (respondents) filed with the RTC of General Santos City,
a complaint for a sum of money against spouses Lorenzo and Elenita Uy with application for the issuance of a
Writ of Preliminary Attachment.
● The trial court issued a Writ of Preliminary Attachment by virtue of which the property, then still in the name
of Lorenzo Uy but which had already been sold to petitioner, was levied. The levy was duly recorded in the
Register of Deeds of General Santos City and annotated upon TCT No. T-30586.
● June 1996, TCT No. T-30586 in the name of Lorenzo Uy was cancelled and, in lieu thereof, TCT No. T-74439
was issued in the name of petitioner. This new TCT carried with it the attachment in favor of respondents.
● Petitioner filed a third-party claim to discharge or annul the attachment levied on the property covered by TCT
No. T-74439 on the ground that the said property belongs to him and no longer to Lorenzo and Elenita Uy.
● The trial court ruled for the petitioner. It held that the levy of the property by virtue of attachment is lawful
only when the levied property indubitably belongs to the defendant. Applying the rulings in the cited cases, it
opined that although defendant Lorenzo Uy remained the registered owner of the property attached, yet the
fact was that he was no longer the owner thereof as it was already sold earlier to petitioner, hence, the writ of
attachment was unlawful.
● Respondents sought reconsideration thereof which was denied. From the unfavorable resolution of the trial
court in the third-party claim, respondents appealed to the Court of Appeals. The CA reversed the resolution
and by judgment it declared that an attachment or levy of execution, though posterior to the sale, but if
registered before the sale is registered, takes precedence over the sale. The writ of attachment in favor of the
respondents, being recorded ahead of the sale to petitioner, will therefore take precedence.
● Petitioner moved for reconsideration but this was denied by the Court of Appeals.
ARGUMENTS PETITIONER (Bernardo Valdevieso)
- maintains that he has a superior right over the questioned property because when the same was attached on
23 April 1996, this property was no longer owned by spouses Uy against whom attachment was issued as it
was already sold to petitioner on 05 December 1995.
- The ownership thereof was already transferred to petitioner
- petitioner avers that he promptly worked out for the transfer of registration in his name. The slight delay in the
registration, he claims was not due to his fault but attributable to the process involved in the registration of
property such as the issuance of the Department of Agrarian Reform clearance which was effected only after
compliance with several requirements.
- submits it would be in accord with justice and equity to declare him as having a superior right to the disputed
property than the respondents

RESPONDENTS (Candelario Damalerio and Aurea Damalerio)

- aver that registration of a deed of sale is the operative act which binds the land and creates a lien thereon
- Before the registration of the deed, the property is not bound insofar as third persons are concerned. Since the
writ of attachment in favor of respondents was registered earlier than the deed of sale to petitioner, respondents
were of the belief that their registered writ of attachment on the subject property enjoys preference and priority
over petitioner's earlier unregistered deed of sale over the same property
- petitioner cannot invoke equity in his favor unless the following conditions are met: (a) the absence of specific
provision of a law on the matter; and (b) if the person who invokes it is not guilty of delay. Both conditions
have not been met, however, since there is a law on the subject matter, i.e., Section 51 of Presidential Decree
No. 1529, and that petitioner allegedly slept on his rights by not immediately registering an adverse claim based
on his deed of sale.
ISSUES Whether or not a registered writ of attachment on the land is a superior lien over that of an earlier unregistered deed
of sale?
RULING The court agrees with the respondents.
● The law applicable to the facts of this case is Section 51 of P.D. No. 1529. Said Section provides:

Sec. 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.

● it is to be noted that though the subject land was deeded to petitioner as early as 05 December 1995, it was
not until 06 June 1996 that the conveyance was registered, and, during that interregnum, the
land was subjected to a levy on attachment. It should also be observed that, at the time of the attachment
of the property on 23 April 1996, the spouses Uy were still the registered owners of said property. Under the
cited law, the execution of the deed of sale in favor of petitioner was not enough as a succeeding
step had to be taken, which was the registration of the sale from the spouses Uy to him.
● Insofar as third persons are concerned, what validly transfers or conveys a person's interest in
real property is the registration of the deed. Thus, when petitioner bought the property on 05 December
1995, it was, at that point, no more than a private transaction between him and the spouses Uy. It needed
to be registered before it could bind third parties, including respondents. When the registration finally
took place on 06 June 1996, it was already too late because, by then, the levy in favor of respondents, pursuant
to the preliminary attachment ordered by the General Santos City RTC, had already been annotated on the title.
● The settled rule is that levy on attachment, duly registered, takes preference over a prior
unregistered sale. This result is a necessary consequence of the fact that the property involved was duly
covered by the Torrens system which works under the fundamental principle that registration is the
operative act which gives validity to the transfer or creates a lien upon the land.
● The preference created by the levy on attachment is not diminished even by the subsequent
registration of the prior sale. This is so because an attachment is a proceeding in rem. It is against the
particular property, enforceable against the whole world. The attaching creditor acquires a specific lien on the
attached property which nothing can subsequently destroy except the very dissolution of the attachment or
levy itself. Such a proceeding, in effect, means that the property attached is an indebted thing and a virtual
condemnation of it to pay the owner's debt.The lien continues until the debt is paid, or sale is had under
execution issued on the judgment, or until the judgment is satisfied, or the attachment discharged or vacated
in some manner provided by law.

13. Toledo Banaga vs. CA, et. al. (G.R. No. 127941, Jan. 28, 1999)

Toledo Banaga vs. CA, et.al. (G.R. No. 127941, Jan. 28, 1999)
TOPIC Surrender of Owner’s Duplicate (Sec. 107, PD 1529)
FACTS ● In an action for redemption filed by Banaga, the trial court declared that she had lost her right to redeem
the property earlier foreclosed and which was subsequently sold at public auction to private respondent.
● Certificates of Title covering the said property were issued to private respondent over which Banaga
annotated a notice of lis pendens. CA reversed the decision and allowed her to redeem the property. On
June 11, 1992, Banaga tried to redeem the property by depositing with the trial court the amount of
redemption which was financed by co-petitioner Tan. Respondent opposed the redemption stating that it
was made beyond the time given to her by the court in the earlier case.
● The lower court decided on August 7, 1992, that the redemption was valid and ordered the RD to cancel
respondent’s CT and issue new titles in Banaga’s name. Respondent appealed and filed a petition for
certiorari with the CA while later causing another notice of lis pendens on the CTs. CA issued a TRO to stop
execution of the decisions of the lower court. On January 7, 1993, Banaga sold the property to Tan with the
deed of sale which mentioned that the CT of respondent was not yet cancelled. Despite the notice, Tan
subdivided the property under a subdivision plan made in the name of private respondent.
● When the TRO expired, Tan asked the RD to issue new titles in her name and such was granted with the
previous annotations of the notices of lis pendens still written into the CT. CA later declared on October 28,
1993 the private respondent the absolute owner of the subject property for failure to redeem the property
within the 30-day period previously granted to her by the court. The decision became final and review was
dismissed for lack of merit.
● The trial court issued a writ of execution to order the RD to reinstate the CTs in respondent’s name. The
fact that CA’s decision declared him as the absolute owner entitles him to a writ of execution to reinstate
the titles in Damalerio’s name.
● However, the RD refused to comply with the writ of execution, stating that the CT issued to Tan must first
be surrendered. Respondent moved to cite RD in contempt of court which was denied because the trial
court said that the remedy is by consulta to the Commission of Land Registration. They also denied the
motion for an issuance of a writ of possession because the appropriate remedy is to declare the CTs of Tan
void.
● CA granted the petition upon appeal by certiorari and mandamus. SC upheld the same in the present case.
It was puzzled as to why the petition of Tan and Banaga (petitioners) seek to set aside the two orders by
respondent judge (the orders to set aside were the denial of a writ of possession and denial of a motion for
reconsideration.)
ARGUMENTS
ISSUES W/N the execution of the final and executory decision which is to issue titles in the name of private respondent
cannot be compelled by mandamus because of the "formality" that the registered owner first surrenders her
duplicate Certificates of Title for cancellation
RULING
Petition is denied.

The petitioners argue that the winning party must wait execution until the losing party has complied with the formality
of surrender of the duplicate title. Such preposterous contention borders on the absurd and has no place in our legal
system. Precisely, the Supreme Court had already affirmed the CA's judgment that Certificates of Title be issued in
private respondent's name.
 If execution cannot be done just because the losing party will not surrender her titles, the entire proceedings of the
courts would be rendered useless. The surrender of the duplicate is implied from the executory decision
since the petitioners were themselves parties thereto.

Besides, as part of the execution process, it is a ministerial function of the Register of Deeds to comply with the decision
of the court to issue a title and register a property in the name of a certain person, especially when the decision had
attained finality, as in this case. The enforcement of a final and executory judgment is likewise a ministerial function
of the courts and does not call for the exercise of discretion. Being a ministerial duty, a writ of mandamus lies to
compel its performance. Moreover, it is axiomatic that where a decision on the merits is rendered and the same has
become final and executory, as in this case, the action on procedural matters or issues becomes moot and academic.

Thus, the so-called consulta to the Commissioner of Land Registration, which is not applicable herein, was only a naive
and belated effort resorted to by petitioners in order to delay execution. If petitioners desire to stop the enforcement
of a final and executory decision, they should have secured the issuance of a writ of preliminary injunction, but which
they did not avail knowing that there exist no legal or even equitable justifications to support it.

14. Abad, et. al., vs. Filhomes Realty (G.R. No. 189239, Nov. 24, 2010)

Abad,et. al., vs. Filhomes Realty (G.R. No. 189239, Nov. 24, 2010)
TOPIC Surrender of Owner’s Duplicate (Sec. 107, PD 1529)
FACTS
● Fil-Homes Realty and Development Corporation and Magdiwang Realty Corporation (respondents), co-owners
of two lots, filed a complaint for unlawful detainer against above-named petitioners (Abad et. al) before the
MeTC.
● Respondents alleged that petitioners, through tolerance, had occupied the subject lots since 1980 but ignored
their repeated demands to vacate them. Petitioners countered that there is no possession by tolerance for
they have been in adverse, continuous and uninterrupted possession of the lots for more than 30 years; and
that respondents’ predecessor-in-interest, Pilipinas Development Corporation, had no title to the lots. In any
event, they contend that the question of ownership must first be settled before the issue of possession may
be resolved.
● On June 30, 2004, while the case is still pending, the City of Parañaque filed expropriation proceedings
covering the lots before the Regional Trial Court of Parañaque with the intention of establishing a socialized
housing project therein for distribution to the occupants including petitioners. A writ of possession was
consequently issued and a Certificate of Turn-over given to the City. Petitioners contested that they have a
better right on the land since they are beneficiaries of the expropriation proceedings but nowhere in the
ordinance stated any beneficiaries.

METC

The MeTC rendered judgment (in the unlawful detainer case) in favor of the respondents ordering plaintiffs to vacate
and surrender possession of the premises. But since no payment had been made yet to respondents for the lots,
the MeTC held that they (respondents) still maintain ownership thereon. It added that petitioners cannot claim a better
right by virtue of the issuance of a Writ of Possession for the project beneficiaries have yet to be named.

RTC

The RTC reversed the MeTC decision and dismissed respondents’ complaint on the ground that there was no toleration
and therefore the unlawful detainer case must not prosper; and (1) the issuance of a writ of possession in favor of the
City bars the continuation of the unlawful detainer proceedings, and (2) since the judgment had already been rendered
in the expropriation proceedings which effectively turned over the lots to the City, the MeTC has no jurisdiction to
disregard the final judgment and writ of possession due to non-payment of just compensation.

CA
The respondents appealed to the CA and the appellate court ruled in favor of respondents. It held that petitioners’
occupation of the property without the permission of the previous owner — Pilipinas Development Corporation — as
an indicium of tolerance by respondents' predecessor-in-interest, ruled in favor of respondents. It also held that (2)
the issuance of a writ of possession in the expropriation proceedings does not signify the completion of the
expropriation proceedings.
ISSUES W/N issuance of writ of possession signifies completion of expropriation proceeding thus transferring ownership of
subject land to the City.
RULING
Petition is denied

It is only upon the completion of the two stages that an expropriation can be said to have been completed. The process
is not complete until payment of just compensation. To effectuate the transfer of ownership, it is necessary for the
NPC to pay the property owners the final just compensation.

Expropriation of lands consists of two stages:

1. The first phase is concerned with the determination of the authority of the plaintiff to exercise the power of eminent
domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not of
dismissal of the action, "of condemnation declaring that the plaintiff has a lawful right to take the property sought to
 be condemned, for the public use or purpose described in the complaint, upon the payment of just compensation to
be determined as of the date of the filing of the complaint.

2. The second phase of the eminent domain action is concerned with the determination by the court of "the just
compensation for the property sought to be taken." This is done by the court with the assistance of not more than
three (3) commissioners.

Accordingly, the issuance of the writ of possession in this case does not write finish to the expropriation proceedings.
To effectuate the transfer of ownership, it is necessary for the NPC to pay the property owners the final just
compensation.

In the present case, the mere issuance of a writ of possession in the expropriation proceedings did not transfer
ownership of the lots in favor of the City. Such issuance was only the first stage in expropriation. There is even no
evidence that judicial deposit had been made in favor of respondents prior to the City’s possession of the lots, contrary
to Section 19 of the LGC.

15. Development Bank of the Phils. vs. Bautista (G.R. No. 21362, Nov. 29, 1968)

Development Bank of the Phils. vs. Bautista (G.R. No. 21362, Nov. 29, 1968)
TOPIC Claims against the Assurance Fund (Sec. 95)
FACTS
● On July 16, 1949, Bautista applied for a loan with the Rehabilitation Finance Corporation (RFC), now
Development Bank of the Philippines (DBP), offering as security the parcel of land covered by O.C.T. No. P-
389. Aside from her certificate of title, Bautista also submitted namely, Tax Declaration No. 5153 in her name
and the blueprint plan of the land.
● The RFC then approved a loan of P4,000.00 in favor of Bautista. Bautista failed to pay the amortization on
the loan so that the RFC took steps to foreclose the mortgage extrajudicially. On July 26, 1952, the Register
of Deeds cancelled O.C.T. No. P-389 and replaced it with T.C.T. No. NT-12108 in the name of the RFC. On or
about this time, however, an action was filed by Rufino Ramos and Juan Ramos in the Court of First Instance
of Nueva Ecija against the Government of the Republic of the Philippines and the RFC (as successor in interest
of Bautista) claiming ownership of the land in question and seeking the annulment of T.C.T. No. 2336.
● A decision thereon was rendered on June 27, 1955 whereby the aforementioned certificates of title were
declared null and void. As creditor, the Development Bank of the Philippines now appellant, filed complaint
against one of its debtors, Lourdes Gaspar Bautista, now appellee, for the recovery of a sum of money
representing the unpaid mortgage indebtedness.
● RTC dismissed DBP’s complaint. The lower court being of the view that the due process requirement was
flagrantly disregarded, since she (Bautista) was not made a party in such action where her title was set
aside, such a judgment could in no wise be binding on her and be the source of a claim by the appellant
bank. Hence, this appeal by appellant bank.
ISSUES W/N DBP can recover money from the Assurance Fund if Bautista cannot be compelled to pay her remaining balance
RULING
Petition is denied.
In the suit before the lower court, the Director of Lands and the National Treasurer of the Philippines were likewise
made defendants by appellant bank because of its belief that if no right existed as against appellee Bautista,
recovery could be had from the Assurance Fund. Such a belief finds no support in the applicable law, which allows
recovery only upon a showing that there be no negligence on the part of the party sustaining any loss or damage or
being deprived of any land or interest therein by the operation of the Land Registration Act. This certainly is not the
case here, plaintiff-appellant being solely responsible for the plight in which it now finds itself. Accordingly, the
Director of Lands and the National Treasurer of the Philippines are likewise exempt from any liability

16. Torres vs. Court of Appeals (G.R. No. L-­‐63046 June 21, 1990)
17. Yap vs. Republic (G. R. No. 199810, March 15, 2017)

Yap vs. Republic (G. R. No. 199810, March 15, 2017)

TOPIC Certificate of Titles pursuant to patents(Sec. 103)
FACTS ● Dela Cruz applied for a free patent — since he could not wait for approval of her application, she executed a
deed of waiver/quitclaim in favor of Pagarigan.
● Pagarigan filed his own free patent and it was issued to him. He then mortgaged it to Banco Davao. Banco
Davao foreclosed it and sold it to public auction. Sale was duly annotated in the title.
● Valparaiso and Malalis(protestants) alleged that they have been in adverse, exclusive, and continuous
occupation of the subject property since 1945, cultivating it, and planting various crops, nipa palms and
coconut trees on said land. Later on, they filed a formal protest alleging the recall of the free patent, an
auction for reversion. Pagarigan ordered the demolition of the houses. As a response, Valaparaiso and Malalis
caused the annotation of lis pendens in the title of the subject land to enjoin Pagarigan, Metran and Galope
from demolishing the former’s houses, pending the determination of the DENR on the propriety of cancelling
the title obtained by Pagarigan.
● The administrative protest of the protestants reached the Office of Sec of DENR, which cancelled the free
patent for FRAUD and found that Pagarigan never occupied the land and he merely misrepresented.
● Meanwhile, Banco Davao, without consolidating title over the land in its name, sold the property to Yap and
Villamor and issued TCT.
● Now, the Department of Transportation and Communication filed a complaint for expropriation of the portion
of the subject before RTC of Davao City which was confronted with the issue of who among the claimants
shall be entitled to just compensation. The trial court held that the just compensation should be in favor of
Yap and Villamor and deemed them purchasers in Good faith.
● Thereafter, respondent (RD of DENR) filed for cancellation of free patent, nullification of title and reversion.
 ● RTC: Dismissed. Held that land was sold to a third person in good faith. It must be shown that they were
part of the fraud. Also, maintained that, as a court of co-equal jurisdiction, it is bound by the said finding
under the principle of conclusiveness of judgment.
● CA: Reversed RTC. CA adopted the findings of the DENR as to the commission of fraud by Pagarigan in his
Free Patent Application(FPA), and held that neither the Bank nor Yap and Villamor were innocent purchasers
for value. Thus, ordered the reversion of the subject lot to the mass of public domain.
● Bank, Yap, and Villamor sought reconsideration of the CA decision, but their motion was denied. Hence this
petition.
ARGUMENTS Yap asserts that she purchased property in good faith for nothing appears in the OCT indicating that some other
person has a right to, or interest over the property covered thereby. As such, there was no obligation on their part to
look beyond the certificate of title to determine the legal condition of the concerned property. Also, that Lis pendens
was not offered in court and the expropriation case adjudged them as good faith and alleged res judicata.
ISSUES 1. Whether or not the Bank, Yap, and Villamor were purchasers in good faith and for value.
2. Whether or not the instant action undermine the indefeasibility of Torrens Title
3. Whether or not the reversion of the subject lot is in order.
RULING 1. Neither the Bank, nor Yap and Villamor were purchasers in good faith and for value.
The fact that Pagarigan fraudulently secured his free patent was duly established by the investigation conducted by
the DENR through Senior Special Investigator Domingo Mendez.

Thus, the DENR ordered for the institution of the present action seeking the cancellation of the certificate of title issued
in the name of Pagarigan, and for the reversion of the land covered thereby to the government. However, Section
32 of Presidential Decree No. 1529 mandates that for a reversion case to prosper, it is not enough to prove that
the original grantee of a patent has obtained the same through fraud; it must also be proven that the subject property
has not yet been acquired by an innocent purchaser for value, because fraudulent acquisition cannot affect the titles
of the latter.

Henceforth, the ultimate resolution of this case boils down to the determination on whether the subsequent
conveyances of the subject lot from Pagarigan were made to innocent purchasers for value.

In the present petition, Yap maintains that the presumption that she and Villamor are buyers in good faith and for
value has not been rebutted. She adds that even if it is assumed, for the sake of argument, that their predecessor-in-
interest committed fraud and misrepresentation, their title as innocent purchasers and for value will not in any way be
affected.

This Court cannot sanction Yap's assertion. Time and again, the Court has ruled that the burden of proof to establish
the status of a purchaser and registrant in good faith lies upon the one who asserts it. This onus probandi cannot be
discharged by mere invocation of the legal presumption of good faith.

It must be emphasized that aside from the fact that a notice of lis pendens was already annotated on
OCT No. P-11182 even before Yap and Villamor purchased the subject property, it was also established that
when they did so, the said property was still registered in the name of Pagarigan since the Bank did not consolidate
its title thereto. Stated simply, Yap and Villamor purchased the subject property not from the registered
owner.

2. The instant action does not undermine the indefeasibility of Torrens Title
In the case of Lorzano v. Tabayag, Jr., the Court reiterated that a Torrens title emanating from a free patent which
was secured through fraud does not become indefeasible because the patent from whence the title sprung is itself
void and of no effect whatsoever.

3. Yes. A fraudulently acquired free patent may only be assailed by the government in an action for reversion.

A free patent that was fraudulently acquired, and the certificate of title issued pursuant to the same, may only be
assailed by the government in an action for reversion, pursuant to Section 101 of the Public Land Act.

In Sherwill Development Corporation v. Sitio Sto. Niño Residents Association, Inc., the Court pointed out
that: It is also to the public interest that one who succeeds in fraudulently acquiring title to a public land should not
be allowed to benefit therefrom, and the State should, therefore, have an even existing authority, thru its duly-
authorized officers, to inquire into the circumstances surrounding the issuance of any such title, to the end that the
Republic, thru the Solicitor General or any other officer who may be authorized by law, may file the corresponding
action for the reversion of the land involved to the public domain, subject thereafter to disposal to other qualified
persons in accordance with law. In other words, the indefeasibility of a title over land previously public is not a bar
to an investigation by the Director of Lands as to how such title has been acquired, if the purpose of such investigation
is to determine whether or not fraud had been committed in securing such title in order that the appropriate action for
reversion may be filed by the Government.

18. Alonzo vs. CCC (G.R. No. 188471, April 20, 2010)

Alonzo vs. CCC (G.R. No. 188471, April 20, 2010)

TOPIC Certificate of Titles pursuant to patents(Sec. 103)
FACTS ● Petitioner Francisco M. Alonso, who died pendente lite and substituted by his legal heirs, the sole heir of the
late Tomas N. Alonso and Asuncion Medalle, who died on June 16, 1962 and August 18, 1963, respectively.
Cebu Country Club, Inc. is a non-stock, non-profit corporation duly organized and existing under Philippine
Laws the purpose of which is to cater to the recreation and leisure of its members.
● Sometime in 1992, petitioner discovered documents and records:
 -Friar Lands Sale Certificate Register/Installment Record Certificate No. 734;
- Sales Certificate No. 734; and
-Assignment of Sales Certificate
● The said documents indicate that his father acquired Lot No. 727 of the Banilad Friar Lands Estate from the
Government of the Philippine Islands in or about the year 1911 in accordance with the Friar Lands Act. The
documents likewise show that one Leoncio Alburo, the original vendee of Lot No. 727, assigned his sales
certificate to petitioner’s father on December 18, 1911, who completed the required installment payments
thereon under Act No. 1120 and was consequently issued Patent No. 14353 on March 24, 1926.
● On March 27, 1926, the Director of Lands, acting for and on behalf of the government, executed a final deed
of sale in favor of petitioner’s father Tomas N. Alonso. It appears, however, that the deed was not registered
with the Register of Deeds because of lack of technical requirements, among them the approval of the deed
of sale by the Secretary of Agriculture and Natural Resources, as required by law.
● Upon investigation of the status of the land, petitioner found out from the office of the Registrar of Deeds of
Cebu City that title to Lot No. 727 of the Banilad Friar Lands Estate had been "administratively reconstituted
from the owner’s duplicate" on July 26, 1948 under Transfer Certificate of Title (TCT) No. RT-1310 (T-11351)
in the name of United Service Country Club, Inc., predecessor of Cebu Country Club, Inc.
● On March 8, 1960, upon order of the Court of First Instance, the name of the registered owner
in TCT No. RT-1310 (T-11531) was changed to Cebu Country Club, Inc. Moreover, the TCT provides
that the reconstituted title was a transfer from TCT No. 1021.
● In the firm belief that petitioner’s father is still the rightful owner of Lot No. 727 of the Banilad Friar Lands
Estate since there are no records showing that he ever sold or conveyed the disputed property to anyone, on
July 7, 1992, petitioner made a formal demand upon Cebu Country Club, Inc. to restore to him the ownership
and possession of said lot within fifteen (15) days from receipt thereof. Cebu Country Club, Inc., however,
denied the petitioner's claim and refused to deliver possession to him.
● Left with no other recourse, on September 25, 1992, petitioner filed with the Regional Trial Court, Cebu
City, a complaint for declaration of nullity and non-existence of deed/title, cancellation of certificates of title
and recovery of property against defendant Cebu Country Club, Inc.
● Rulings:
● RTC: Judgment was rendered in favor of the defendant and against the plaintiff: declaring the contested
property or Lot 727 as legally belonging to the defendant; directing the plaintiff to pay attorney’s fee of P400,
000.00; and litigation expenses of P51, 000.00; and finally, with costs against the plaintiff.
● CA Ruling: After proceedings on appeal, the Court of Appeals affirmed the lower court’s decision.
Thereafter, the petitioner filed a motion for reconsideration; however, the Court of Appeals denied the
motion. Hence, this appeal.
ARGUMENTS PETITIONER’s(among others)
1. R.A. No. 9443 did not improve Cebu Country Club's plight, inasmuch as R.A. No. 9443 presupposed first a
sales certificate that lacked the required signature, but Cebu Country Club did not have such a sale
certificate. Moreover, the titleholders were in fact the owners of the lands covered by their respective titles,
which was not true with Cebu Country Club due to its being already adjudged with finality to be not the
owner of Lot 727-D-2. Lastly, Cebu Country Club's title was hopelessly defective, as found by the Supreme
Court itself;
2. The doctrine of law of the case barred the application of R.A. No. 9443 to Cebu Country Club;
3. The use of R.A. No. 9443 as a waiver on the part of the Government vis-àvis Cebu Country Club was not
only misplaced but downrightly repugnant to Act 1120, the law governing the legal disposition and
alienation of Friar Lands; and
4. The petitioners had the requisite standing to question the patent errors of the RTC, especially in the face of
the unholy conspiracy between the OSG
ISSUES 1) Whether or not the petitioners were the real parties-in-interest to question the denial by the RTC of the OSG's
motion for the issuance of a writ of execution;
2) Whether or not R.A. No. 9443 gave the petitioners a legal interest to assail the RTC's orders
RULING
1. Petitioners are not proper parties to appeal and assail the order of the RTC.
Admittedly, neither petitioners nor their predecessor had any title to the land in question. The most that petitioners
could claim was that the Director of Lands issued a sales patent in the name of Tomas N. Alonso. The sales patent,
however, and even the corresponding deed of sale were not registered with the Register of Deeds and
no title was ever issued in the name of the latter. This is because there were basic requirements not
complied with, the most important of which was that the deed of sale executed by the Director of Lands
was not approved by the Secretary of Agriculture and Natural Resources. Hence, the deed of sale was
void. "Approval by the Secretary of Agriculture and Commerce is indispensable for the validity of the
sale."

Every action must be prosecuted or defended in the name of the real party in interest, unless otherwise authorized by
law or the rules. A real party in interest is one who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit. "Interest" within the meaning of the rule means material interest, an interest
in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere
incidental interest. The rule refers to a real or present substantial interest, as distinguished from a mere expectancy;
or from a future, contingent, subordinate, or consequential interest. One having no right or interest to protect cannot
invoke the jurisdiction of the court as a party-plaintiff in an action.

Accordingly, an appeal, like this one, is an action to be prosecuted by a party in interest before a higher court. In order
for the appeal to prosper, the litigant must of necessity continue to hold a real or present substantial interest that
entitles him to the avails of the suit on appeal. If he does not, the appeal, as to him, is an exercise in futility. Hence,
petitioner having no legal interest in the property since they do not possess any legal title to claim possession thereof
cannot be referred to as a party in interest in this case. In contrast, the Government, being the legal owner of Lot No.
727-D-2, is the only party adversely affected by the denial, and is the proper party entitled to assail the denial. However,
 its manifest desistance from the execution of the decision effectively barred any challenge against the denial, for its
non-appeal rendered the denial final and immutable.

2. R.A. No. 9443 gives petitioners no legal interest to assail the denial of the motion for execution
RA No. 9443 expressly declares as valid "all existing Transfer Certificates of Title and Reconstituted Certificates of Title
duly issued by the Register of Deeds of Cebu Province and/or Cebu City covering any portion of the Banilad Friar Lands
Estate," and recognizes the registered owners as absolute owners. To benefit from R.A. No. 9443, therefore, a
person must hold as a condition precedent a duly issued Transfer Certificate of Title or a Reconstituted
Certificate of Title.

The petitioners could not benefit from R.A. No. 9443 because of their non-compliance with the express condition of
holding any Transfer Certificate of Title or Reconstituted Certificate of Title respecting Lot 727-D-2 or any portion
thereof.
The appropriate recourse for the petitioners, if they persist in the belief that the TCT of Cebu Country Club should
be nullified, is to compel the OSG through the special civil action for mandamus to commence the action
to annul on the ground that Cebu Country Club had obtained its title to Lot 7217-D-2 through fraud. Yet,
that recourse is no longer availing, for the decision in G.R. No. 130876 explicitly found and declared that the
reconstituted title of Cebu Country Club had not been obtained through fraud.

Said the Court:

a. On the question that TCT No. RT-1310 (T-11351) bears the same number as another title to another
land, we agree with the Court of Appeals that there is nothing fraudulent with the fact that Cebu Country Club, Inc.
's reconstituted title bears the same number as the title of another parcel of land. This came about because under
General Land Registration Office (GLRO) Circular No. 17, dated February 19, 1947, and Republic Act No. 26 and Circular
No. 6, RD 3, dated August 5, 1946, which were in force at the time the title was reconstituted on July 26, 1948, the
titles issued before the inauguration of the Philippine Republic were numbered consecutively and the titles issued after
the inauguration were numbered also consecutively starting with No. 1, so that eventually, the titles issued before the
inauguration were duplicated by titles issued after the inauguration of the Philippine Republic. . . . .

b. On alleged extrinsic and intrinsic fraud in the reconstitution of the title in the absence of a deed of
conveyance in its favor. In truth, however, reconstitution was based on the owner's duplicate of the title, hence,
there was no need for the covering deed of sale or other modes of conveyance. Cebu Country Club, Inc. was admittedly
in possession of the land since long before the Second World War, or since 1931. In fact, the original title (TCT No.
11351) was issued to the United Service Country Club, Inc. on November 19, 1931 as a transfer from Transfer
Certificate of Title No. 1021. More importantly, Cebu Country Club, Inc. paid the realty taxes on the land even before
the war, and tax declarations covering the property showed the number of the TCT of the land. Cebu Country Club,
Inc. produced receipts showing real estate tax payments since 1949. On the other hand, petitioner failed to produce a
single receipt of real estate tax payment ever made by his father since the sales patent was issued to his father on
March 24, 1926. Worse, admittedly petitioner could not show any [T]orrens title ever issued to Tomas N. Alonso,
because, as said, the deed of sale executed on March 27, 1926 by the Director of Lands was not approved by the
Secretary of Agriculture and Natural Resources and could not be registered.

c. Petitioner also alleges that Cebu Country Club, Inc. obtained its title by fraud in connivance with
personnel of the Register of Deeds in 1941 or in 1948, when the title was administratively reconstituted.
Imputations of fraud must be proved by clear and convincing evidence. Petitioner failed to adduce evidence of fraud.
In an action for re-conveyance based on fraud, he who charges fraud must prove such fraud in obtaining a title. "In
this jurisdiction, fraud is never presumed." The strongest suspicion cannot sway judgment or overcome the
presumption of regularity. "The sea of suspicion has no shore, and the court that embarks upon it is without rudder or
compass." Worse, the imputation of fraud was so tardily brought, some forty-four (44) years or sixty- one (61) years
after its supposed occurrence, that is, from the administrative reconstitution of title on July 26, 1948, or from the
issuance of the original title on November 19, 1931, that verification is rendered extremely difficult, if not impossible,
especially due to the supervening event of the second world war during which practically all public records were lost
or destroyed, or no longer available.

The Court declares that Cebu Country Club, Inc. is the exclusive owner of Lot No. 727-D-2 of the Banilad Friar Lands
Estate, as confirmed by Republic Act No. 9443.

19. Egao vs. CA (G. R. No. L79787, June 29, 1989)

Egao vs. CA (G. R. No. L79787, June 29, 1989)

TOPIC Certificate of Titles pursuant to patents(Sec. 103)
FACTS ● The respondents filed a motion for quieting the title and recovery of possession and ownership against the
petitioners. Apparently, they claim they are the owners of the parcel of land by virtue of the deed of sale they
entered into with Roberto Marfori to whom the petitioners allegedly sold their land to.
● The Egaos acquired their land title by virtue of a free patent and transferred their ownership in favor of Marfori
by virtue of a deed of sale. However, the Certificate of Title was not transferred in Marfori’s favor. Upon
purchase of the land from Marfori, the respondents introduced improvements thereon and paid taxes for the
property.
● However, the petitioners illegally occupied portions of the land. Petitioner answers that they are the true
owner of the land by virtue of the Certificate of Title issued by the Register of Deeds pursuant to their Free
Patent.
● RTC: ruled in favor of Egao.
● Upon appeal, the CA reversed the decision of the lower court on grounds that the main issue should be
whether Egao can validly sell the land to Marfori who subsequently transferred the ownership to the
respondents.
 ● CA: holds both Egao and Marfori to be in pari delicto for violating the 5-year restriction provided by
Commonwealth 141 against encumbrance and alienation of public lands acquired thru free patent or
homestead patent. They cannot therefore obtain affirmative relief. It also declares the respondents as
innocent purchasers for value who obtained the duplicate of the OCT still in the name of the Egaos from
Marfori and ownership was transferred to them by physical possession of the property. It thus promulgated
judgment holding the respondents the absolute owners of the land in dispute, to cancel the OCT of the
petitioner and its transfer thereof to the respondents and to surrender peaceful possession of the land to the
respondents.
ARGUMENTS
ISSUES Whether or not the petitioners validly transferred their ownership to Marfori to resolve the rights of the respondents
over the land in dispute.
RULING No. The SC holds that based on the adduced evidence, the Egaos sold the lot to Marfori within the 5-year restriction
period provided by law on Free Patent based on the Deed of Sale entered into by the parties. Although the
petitioners denied the validity of the Deed of Sale the court held that it was notarized and a notarial document has in
its favor the presumption of regularity.

When the land was sold to the respondents, they know that the OCT is still registered under the name of the petitioners.
Thus, they are not considered to be innocent purchasers as contrary to the ruling of the CA.

Where a purchaser neglects to make the necessary inquiries and closes his eyes to facts which should put a reasonable
man on his guard as to the possibility of the existence of a defect in his vendor's title, and relying on the belief that
there was no defect in the title of the vendor, purchases the property without making any further investigation, he
cannot claim that he is a purchaser in good faith for value.

A private individual cannot bring an action for reversion or any action which would have an effect of
canceling a free patent and the certificate of title issued on the basis thereof since the land covered will
form part again of the public domain. Sec. 124 of the Public Land Act provides that deeds of sale of patented
lands, perfected within the prohibited five (5) year period are null and void thus the Egaos have no title to pass to
Marfori and nobody can dispose of that which does not belong to him.

The respondents are not innocent purchasers for value with no standing to question the rights of the petitioners over
the land and to file an action to quiet the title. The petitioners remained to be the registered owners and entitled to
remain in physical possession of the disputed property. Respondents are ordered to deliver the OCT to the petitioners
without prejudice to an action for reversion of the land to be instituted by the Solicitor General for the State.

20. Gordula v. CA, GR 127296, Jan. 22, 1998, 284 SCRA 617
21. Cabacug v. Lao, GR L-­‐7036, Nov. 26, 1970, 36 SCRA 92

CABACUG vs. LAO, G.R. No. L-27036. November 26, 1970 (ODCHIGUE)
TOPIC Right of a holder of land under free patent; right to repurchase

FACTS ● January 26, 1944 – plaintiff, born a Filipino, married Te Ben Ting, a Chinese citizen.
● October 19, 1946 - Te Ben Ting died.
● March 16, 1957 - OCT No. P-1332, Free Patent No. V-67-921 was issued to plaintiff covering two (2) parcels of
land both situated at the Poblacion of Tudela, Misamis Occidental.
● September 13, 1962 – the 2 parcels of land with OCT No. P-1332, Free Patent No. V-3792 were sold by the
plaintiff to the defendants.
● TCT No. T-436 for the said two parcels of land was issued in the name of the defendants.
● Plaintiff on several occasions offered to repurchase the abovementioned two parcels of land from the defendants,
but the defendants continuously refused the offer.
● August 11, 1965 - plaintiff deposited with the Clerk of Court, Court of First Instance, City of Ozamis the sum of
P13,165.00 as the repurchase money
● September 22, 1965 – plaintiff filed the present complaint for repurchase with damages
Petitioner Cabacug:
● Had not filed an affidavit of repatriation, although she has been voting in the previous local and national election
● Civil status: Single
● Living with (not married) with Felix Lao whom she had 4 children
● 2 parcels of land before sale has been planted with coconut trees
Defendants:
● Had introduced improvements on the land, extent, value and time dependent on the evidence to be submitted –
BUT failed to introduce evidence on their behalf.
RTC Decision (Aug. 8, 1966):
● rendered the decision in favor of the plaintiff and against defendants ordering them to reconvey the two parcels
of land in question.
ARGUMENTS Petitioner cannot repurchase because she was not a Filipino citizen.

ISSUES W/N the plaintiff has the right to repurchase the land. (YES)
RULING The petitioner did lose her Filipino citizenship when she married a Chinese national and she could have reacquired her
Filipino nationality by repatriation which could be effected " by merely taking the necessary oath of allegiance to the
[Republic] of the Philippines and registration in the proper civil registry." At the time she acquired the free patent to
the parcels of land on March 16, 1957, she had not taken such steps. Nonetheless, no such question was
raised by the government. On September 13, 1962, when the sale of such land now in litigation was made to
defendants, she likewise had the same status. Then, when in accordance with the beneficent provision of the Public Land
Act, she would repurchase the same, defendants would seek to negate such a clear legal right by the plea that she was
not a Filipino.

A holder of a land acquired under a free patent is more favorably situated than that of an owner of registered
property. Not only does a free patent have a force and effect of a Torrens Title, but in addition the person to whom it is
granted has likewise in his favor the right to repurchase within a period of five years.

The right to repurchase is not to be set at naught by please that petitioner was not a Filipino, one which if it could be
raised at all could be set up only by the government as the aggrieved party. It is not to be lost sight of either that
considering case and facility with which the repatriation of plaintiff in this case could be effected, such a plea as that made
by defendants even if not so clearly lacking in persuasive force certainly cannot avail to defeat plaintiff's claim. The
judgment therefore in her favor must be affirmed.

Defendants' norm of conduct cannot be said to be in consonance with the requirements of good faith. Plaintiff
being a widow of a Chinese national 16 years before the sale, was known to defendants when they purchased the property.
The suspicion could be legitimately entertained that all the while, they harbored the sinister intention of rendering nugatory
a statutory right in favor of plaintiff.
Decision of the lower court on August 8, 1966 is affirmed.

22. Azarcon v. Vallarta, GR L-­‐43679, Oct. 28, 1980

AZARCON vs. VALLARTA, G.R. No. L-43679. October 28, 1980 (ODCHIGUE)

TOPIC When free patent title is ipso facto cancelled and rendered void

FACTS · Subject property – irrigated riceland:

o Previously owned by Dr. Jose Cajucom, father of appellant Rosa Cajucom--Azarcon
o covered by two titles, namely:
§ Original Certificate of Title No. P-2815 1 in the name of appellants Azarcons, and
§ Original Certificate of Title No. O-3093 2 previously in the names of the appellees
Vallartas, but now covered by several Transfer Certificates of Title in their individual
names
· Evidence of the Vallarta’s
o March 14, 1932 - sold to Julian Vallarta Sr. and his wife, parents of the defendants, the
subject land of nine hectares described in Psu-171661
o Resurvey revealed that the land was actually 19 hectares.
o October 7, 1960 – Dr. Cajucom executed a "Waiver and Quitclaim" over the excess ten
hectares, now in dispute, in consideration of the amount of P5,000.00.
o July 18, 1966 - Register of Deeds of Nueva Ecija issued Original Certificate of Title No.-0-
3093 in the name of the aforementioned Vallarta heirs.
· Evidence of the Azarcon’s
o October 20, 1959 - year before the aforementioned waiver, Dr. Cajucom executed a "Deed
of Absolute Sale" of the same land in favor of the Azarcons, in the amount of P20,000.00.
o The document also referred to the same plan Psu-171661
§ the property was unregistered land and
§ a "paraphernal" property of Dr. Cajucom, he inherited from his father
· 1961 – appellant Rosa filed a Free Patent Application over the disputed property. She presented affidavits
attesting to the actual occupation and cultivation of the land in dispute since 1934 by herself and/or her
predecessors-in-interest.
· February 26,1961 – free patent application approved and Free Patent Entry No. 18504 was thereafter
issued by the Director of Lands.
· May 8, 1961- Register of Deeds of Nueva Ecija issued Original Certificate of Title No. P-2815 in the name
of the Azarcons.
· The resultant situation then is a 10-hectare irrigated riceland sold successively by its previous owner
to the two sets of opposing parties herein, and covered by two distinct original certificates of title in
their respective favor.
· March 5 and 22, 1968 – Azarcon’s letter of demand to Vallarta to vacate the land, which were ignored.
· March 18, 1969 – Azarcon filed with Court if Frist Instance Nueva Ecija for the cancellation of Vallarta
titles but was dismissed by the court.
· May 6, 1968 - Azarcons filed the instant Complaint for Cancellation and Annulment of Titles with the
Court a quo, which the Vallartas traversed and controverted, and with each set of litigants asserting the validity,
superiority, and indefeasibility of their respective titles.
· December 27, 1969 Decision of the lower court
o In favor of the Vallarta
 o Declared Free Patent No. 167650 and/or OCT No. P-2815 of the Land Records of Nueva Ecija
null and void.
o Register of Deeds to cancel the same at the plaintiff’s expense.
ARGUMENTS Petitioner and their predecessors were in actual possession of the land since 1926 and that they have paid
continuously since July 4, 1926 the real estate tax thereof so their free patent title prevails.
ISSUES W/N a Free patent title of the plaintiff prevail over a OCT of the defendants. (No)

RULING "A free patent which purports to convey land to which the government did not have any title at the time
of its issuance does not vest any title in the patentee as against the true owner (Suva vs. Ventura, 40 Off.
Gaz., pp. 47-48, 4th Supp., Aug. 2341, Ct. App; Ramoso v. Obligado, 70 Phil. 86; Director of Lands v. Reyes, 69 Phil.
497; Vital vs. Anora, G. R. No. L-4176, February 29, 1952).

Plaintiffs were fully aware that on February 26, 1961 when their application was approved, the land in question
was not a part of the public domain as to be disposable by the Director of Lands, because as early as October 20,
1959 they knew too well that the land was of the private ownership of the patentees' father Jose V. Cajucom. That
said land was no longer a part of the public domain but of the private ownership of Jose V. Cajucom.
Pursuant to the abovecited cases, where a person, who obtained free patent, knowingly made a false statement of
material and essential facts in his application, by stating that the land applied for was part of the public domain not
occupied or claimed by any other person, when in fact, the same had formally belonged to another as his private
property from whom he alleged to have acquired it, it was held that in accordance with Section 91 of Com.
Act No. 141 his title is ipso facto cancelled, and consequently, rendered null and void.

Fetal misrepresentation by the plaintiffs’ application resulting to its nullity: the statements that they and their
predecessors were in actual possession of the land since 1926 and that they have paid continuously since July 4, 1926
the real estate tax thereof – contrary to the evidence adduced. As to possession, the defendants or their
predecessors were in continuous possession of the disputed land since March 14, 1932.

OCT No. 0-3093 was obtained without plaintiffs opposing the registration thereof and with no opposition on the part
of the Director of Lands - title is now indefeasible an incontestable.

We are fully cognizant of the well-settled rule that where two certificates of title are issued to different persons
covering the same land in whole or in part, the earlier date must prevail as between the original parties, and in
case of successive registration where more than one certificates is issued over the land the person holding under
the prior certificates is entitled to the land as against the person who relies on the second certificate. This
presupposes, however, that the prior title is a valid one. Where, as in the case at bar, it is evident that the prior
title of the Azarcons suffers from an inherent informity, such a rule cannot be invoked in their favor.

We cannot but decry the carelessness of the Bureau of Lands in having issued the Free Patent in ROSA's favor. Surely,
a more diligent search into their records would have revealed the true character of the disputed property as private
land. It should also be noted that in the voluntary registration proceedings filed by the Vallartas (LRC Rec. No. N-
26618), the Director of Lands, through the Provincial Fiscal who represented him, should have known of the Free
Patent previously issued and should have informed the Court accordingly. Had more vigilance been exercised by a
government agency entrusted specifically with the task of administering and disposing of public lands, the present
litigation could have been averted.

23. Ramos v. Obligado, GR 46548. June 21, 1940, 70 Phil. 86

Ramoso vs. Obligado et. al. G.R. No. 46548. June 21, 1940 (ODCHIGUE)
TOPIC Instance when free patent vests no title on patentee
FACTS · September 21, 1921 - homestead granted to Feliciano Capinpin and registered in the Office of the
registrar of deeds of Nueva Ecija under title No. 1080.
· May 17, 1930 – his widow and son by the first marriage sold the property to respondent Juan
Obligado.
· December 10, 1929 – the court awarded the property to the widow when the cadastral proceedings
were open and widow, without the son claimed the property.
· December 8, 1930 - final decree of registration was issued.
· January 7, 1931 – OCT was issued.
· October 26, 1934 - the widow transferred the property to her lawyer, Armesto Ramoso, the herein
petitioner in whose favor TCT No. 8550 was issued.
ARGUMENTS Petitioner acted in bad faith in acquiring the property from Luisa Jarduela, for, prior to the acquisition, he knew
that the property had already been sold to Juan Obligado.
ISSUES W/N Armesto Ramoso, under his TCT is entitled to the property as against the first transferee, Juan Obligado.
(No)
RULING A homestead patent, once registered under the Registration Act, becomes as indefeasible as a Torrens
title, and cannot thereafter be the subject of an investigation for determination or judgment in a
cadastral case. Any new title which the cadastral court may order to be issued is null and void and should be
cancelled. All that the cadastral court may do is to make corrections of technical errors in the description of the
property contained in its title, or to proceed to the partition thereof if it is owned by two or more coowners.
(Pamintuan vs. San Agustin et al., 43 Phil., 558, 561; El Hogar Filipino vs. Olviga et al., 60 Phil., 17, 18.)

Accordingly, the order of registration issued by the cadastral court in favor of the widow is null and
void, and, consequently, no valid transfer could have been made by her in favor of the petitioner,
Armesto Ramos. In other words, the latter has no right to the property.

If, according to the registered title, the property belongs to several owners, the cadastral court may order partition
among them. But when the registered title belongs to only one person, the cadastral court cannot, if that person is
dead, order the registration of the property in favor of the heirs or its partition among them, for that
would presuppose a declaration of heirs, a function which devolves upon probate courts.

When the ownership has already been determined and a registered title has already been issued, the cadastral
court cannot adjudicate anew the ownership of the property and order the issuance of an original title to successors
in interest. Such successors in interest, either by inheritance or by contract, are entitled only to a transfer certificate
of title which can be issued in proceedings that are not proper in a cadastral court. The issuance of an original title
to the successors in interest is in fact equivalent to setting aside the original title issued in favor of their predecessor
in interest. And this cannot be done by the cadastral court.

The issuance of an original title to the successors in interest is in fact equivalent to setting aside the
original title issued in favor of their predecessor in interest. And this cannot be done by the cadastral
court.

24. Republic v. Animus, GR L-­‐37682, Mar. 29, 1974