587 Phil. 175
LEONARDO-DE CASTRO, J.:
WHEREFORE, premises, the above-entitled petition is granted for being preponderantly meritorious. Judgment is hereby rendered ordering:In time, respondents appealed to the CA, principally arguing that the RTC committed reversible error in ruling that petitioners had a better right over the disputed property. Respondents theorized that the prior conveyance of the disputed property made by La Fuente to petitioners being a voluntary dealing with a registered land, mere registration of their adverse claim was insufficient. To respondents, in order to have petitioners' interest protected, they should have registered the Deed of Absolute Sale with the Register of Deeds pursuant to Section 51 of PD 1529 and not merely register an adverse claim under Section 70 of the same law. Citing the second paragraph of Section 70 which provides that an adverse claim shall be effective for a period of thirty days from the date of registration, respondents insisted that the annotated Adverse Claim of petitioners had already expired, hence, it offered no protection when respondents acquired the disputed property through execution sale.
1) The Register of Deeds of Las Piñas, Metro Manila to cancel all the annotations of encumbrances in favor of defendants [respondents] in Transfer Certificate of Title No. 83618 issued by the Register of Deeds of Pasay City, Metro Manila, District IV; 2) Defendants [respondents] to pay plaintiffs [petitioners] in the sum of P 10,000.00 as compensatory damages by way of litigation expenses; 3) To pay to plaintiffs [petitioners] the sum of P 10,000.00 as attorney's fees; and, 4) To pay the cost of the proceedings.
SO ORDERED.
This Court, also believes that there is truth in defendants-appellants' assertion that while the sale is perfected and consummated, plaintiffs-appellees failed to diligently protect their interests by failing to register the conveyance or transaction in the office of Register of Deeds. An owner of a registered land is vested by law with rights and obligations and thus exercises all attributes of ownership. These attributes include among others the right to dispose the real property itself. The owner of the land may convey, mortgage, lease or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instrument as are sufficient in law. However, as clearly provided by Section 51 of Presidential Decree 1529, no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land, until the same has been registered in the office of the Register of Deeds. It shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to effect registration. The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the Office of the Register of Deeds of the province or city where the land lies. Unless and until the subject transaction has been filed or registered in the office of the Register of Deeds, the transaction shall only be binding on the parties to the contract but not on the third person. The instrument is not thereby rendered void by failure to register. Section 51 of PD 1529 states:Laying the blame on petitioners, the CA added:Section 51. Conveyance and other dealings by registered owner - An owner of registered land may convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land, but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third persons are concerned, and in all cases under this Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies.
The law provides protection to third person, who believing in good faith and relying on the sweet representations of some evil minded persons, may be unjustifiably inveigled to enter into a contract or transaction not knowing that the subject real property has been encumbered or sold. It is the duty of the buyer or vendee to register the transaction before the Register of Deeds of the province or city where the property lies. The registration is intended to inform any minded individual that the property has been subjected to a prior transaction and that entering into any further contract involving the same property shall be at his own risk. In the event that any third person was bona fide tricked to enter into any transaction involving the same property because the transferee or vendee failed to register the same as required by law, the latter's interests should be subordinated to that of the third party. Axiomatic is the rule in this jurisdiction that when loss or damage was caused to two individuals who both acted in good faith but one is negligent, the loss or damage shall fall upon the one who acted negligently.Citing a myriad of jurisprudence[6], the CA declared that respondents, as attaching creditors who registered the order of attachment and the sale of the property to them as the highest bidders, acquired a valid title to the disputed property as against petitioners who had previously bought the same property from the registered owner but failed to register their deed of sale.
WHEREFORE, in view of the foregoing, the Decision dated May 11, 1993 of the Regional Trial Court, National Capital Judicial Region, Branch 135, Makati City in Civil Case No. 90-064 is hereby REVERSED.Their motion for reconsideration having been denied by the CA in its challenged Resolution of November 21, 2002, petitioners are now before this Court, faulting the CA as follows:
The Register of Deeds of Las Piñas, Metro Manila is hereby mandated not to cancel any annotations of encumbrances in favor of defendants-appellants in Transfer Certificate of Title No. 83618 issued by the Register of Deeds of Pasay City, Metro Manila, Dist. IV.
Who among the parties has a preferential right over the disputed property.
SO ORDERED.
WITH DUE RESPECT, THE COURT A QUO GRAVELY ERRED AND ABUSED ITS DISCRETION WHEN IT RENDERED SUBJECT DECISION AND RESOLUTION IN A WAY PROBABLY NOT IN ACCORD WITH LAW OR RULES WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT; Specifically, the Court a quo erred;The petition is impressed with merit.
- When it held that the levy on attachment LATER annotated shall prevail over the Adverse Claim EARLIER annotated at the back of the title by the mere lapse of 30 days and even without any petition in court for its cancellation;
- When it did not dismiss the appeal considering that the question raised were questions of law and NO question of fact.[8]
Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement in writing, setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, and a description of the land in which the right or interest is claimed.In the same case, we held that for as long as there is yet no petition for its cancellation, the notice of adverse claim remains subsisting: Thus:
The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest. Provided, however that after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant.
At first blush, the provision in question would seem to restrict the effectivity of the adverse claim to thirty days. But the above provision cannot and should not be treated separately, but should be read in relation to the sentence following, which reads:In a petition for cancellation of adverse claim, a hearing must first be conducted. The hearing will afford the parties an opportunity to prove the propriety or impropriety of the adverse claim.[11]After the lapse of said period, the annotation of the adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the lapse of thirty days, then it would not have been necessary to include the foregoing caveat to clarify and complete the rule. For then, no adverse claim need be cancelled. If it has been automatically terminated by mere lapse of time, the law would not have required the party in interest to do a useless act.[10]
Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.An "innocent purchaser for value" or any equivalent phrase shall be deemed to include, under the Torrens System, the innocent lessee, mortgagee, and other encumbrancer for value.[15]
Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith as against the true owner of the land or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.[18]Good faith, or the want of it, is capable of being ascertained only from the acts of one claiming its presence, for it is a condition of the mind which can only be judged by actual or fancied token or signs.[19]
xxx In derogation to defendants claim that they have a better right over the questioned property superior over that of the plaintiffs, the Court has only to carefully examine the face of TCT No. 83618 and its dorsal part on Memorandum of Encumbrances for entries and inscriptions in their chronological order of dates of annotation of documents in the Office of the Register of Deeds. On the title itself it is readily perceived and palpable that Entry No. 86-62262/T-83618 in reference to the Adverse Claim executed by plaintiff Jesus Ching was registered way ahead on November 20, 1986 compared to Entries Nos. 3433-2, 3434-2 and 736-3, respectively the Notice of Levy, Writ of Execution and Certificate of Sale in favor of spouses defendants Enrile which were duly registered on August 19, 1988 (for the first two documents) and on March 21, 1989 (for the last document). Perforce, before the registrations of the three documents purporting to be the rights and interests of defendants in the property in question, the defendants more particularly and the whole world in general were given constructive notice that Raymunda La Fuente, the judgment debtor in Civil Case No. 54617 of the Regional Trial Court of Pasig, has no more interest and rights to the property subject of litigation. Defendants should have at the first instance been duly warned and notified that the property involved in litigation subject to attachment and levy, execution and sale from actual registration of the defendants' documents referred herein. The annotation of inscription to Entry No. 86-622/T-83618 is obviously and indeed very clear indicating that the plaintiffs' registered adverse claim in reference to the sale of the same property sought by defendants to be levied on attachment, final execution and sale came ahead.[21]Hence, the particular circumstances of this case constrain us to rule that respondents were not purchasers in good faith and, as such, could not acquire good title to the property as against the former transferee.