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46. SAPTO v. FABIANA, 103 PHIL 683

FACTS: Sapto (Moro), now deceased, was the registered owner of a parcel of land
located in Alambre, Toril, Davao City. When Sapto died, he left his children
Samuel, Constancio, and Ramon as heirs of the property in question. Ramon pre-
deceased his two brothers, leaving no, other heirs. On June 6, 1931, Samuel and
Constancio Sapto executed a deed of sale of a portion of four hectares of the land
aforementioned in favor of defendant Apolonio Fabiana. The sale was duly
approved by the Provincial Governor of Davao, but was never registered.
Possession of the land conveyed was, however, transferred to Fabiana and the latter
has been in the possession thereof since 1931 up to the present. Thereafter,
Constancio Sapto died without any issue. Samuel Sapto married one Dora
(Bagoba) and upon his death was survived by his widow and two children,
Laureana and Vicente Sapto. On October 19, 1954, the widow and children of
Samuel Sapto filed this action in the Court of First Instance of Davao for the
recovery of the parcel of land sold by their predecessors to defendant Apolonio
Fabiana in 1931. After trial, the lower court held that although the sale between
Samuel and Constancio Sapto and defendant in 1931 was never registered, it was
valid and binding upon the parties and the vendors heirs, and ordered the plaintiffs
to execute the necessary deed of conveyance in defendant's favor and its annotation
in the certificate of title. From this judgment, plaintiffs appealed to this Court.

ISSUES:

a.) Whether or not the deed of sale executed by appellants' predecessors in favor of
the appellee over the land in question, although never registered, is valid and
binding.

b.) Whether or not the CFIs order of conveyance in favor of Fabiana is valid.

DECISIONS:

a.) The deed of sale executed by appellants' predecessors in favor of the appellee
over the land in question, although never registered, is valid and binding. The SC
first affirmed the validity of the sale between the Sapto brothers and Fabiana,
ruling, that even though it was never registered the sale was valid, binding, and
effective upon the heirs of the vendor. According to the court, as between the
parties to a sale, registration is not necessary to make it valid and effective, for
actual notice is equivalent to registration. In fact in the case of Medina vs. Imaz
and Warner Barnes and Co., 27 Phil., 314, it was held that the peculiar force of a
title is exhibited only when the purchaser has sold to innocent third parties the land
described in the conveyance, furthermore, in Galanza vs. Nuesa, 95 Phil., 713, the
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court held that "registration is intended to protect the buyer against claims of third
persons arising from subsequent alienations by the vendor, and is certainly not
necessary to give effect as between the parties to their deed of sale". Since no right
of innocent third persons or subsequent transferees of the property in question is
involved herein. The property has remained and still is in the possession of the
vendee of appellants' predecessors, herein appellee. It is, therefore, clear that the
conveyance between appellee and his vendors are valid and binding upon the latter,
and is equally binding and effective against the heirs of the vendors, herein
appellants. In other words, the transfer and possession of the property was a clear
indication of the validity of the sale.

b.) The CFIs order of conveyance in favor of Fabiana is valid. In assailing the
order, the Sapto heirs claimed that the CFI cannot order the conveyance because
the defendants cause of action had already prescribed. The SC ruled however, that
the action for conveyance was actually one to quiet title. In ruling so, the SC cited
American jurisprudence and Art. 480 of the New Civil Code, which states, that
actions to quiet title to property in the possession of the plaintiff are
imprescriptible.
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47. LIGON VS COURT OF APPEALS

FACTS:

IDP (Islamic Directorate of the Phils) sold to INK (Iglesia Ni Kristo) 2 parcels of
land. . The parties stipulated in the deed of sale that the IDP shall undertake to
evict all squatters and illegal occupants in the property within forty-five (45) days
from the execution of the contract. IDP failed to fulfill this obligation. Hence INK
prayed that the trial court order IDP to comply with its obligation. IDP alleged in
its answer that it was INK which violated the contract by delaying the payment of
the purchase price and prayed that the contract of sale be rescinded. The trial court
rendered judgment in favor of INK. INK, then, filed a motion praying that
petitioner Leticia Ligon, who was in possession of the certificates of title over the
properties as mortgagee of IDP, be directed to surrender the certificates to the
Register of Deeds of Quezon City for the registration of the Absolute Deed of Sale
in its name.

The trial court rendered decision ordering Ligon to surrender the duplicate copies
to INK. This was subsequently amended and Ligon was ordered to surrender such
copies to the Register of Deeds.

ISSUE:
Whether or not the RTC has jurisdiction to order the surrender of the owners
duplicate copies
Whether or not INK is entitled to the owners duplicate copies

HELD:
Jurisdiction of RTC
Under our land registration law, no voluntary instrument shall be registered by the
Register of Deeds unless the owner's duplicate certificate is presented together with
such instrument, except in some cases or upon order of the court for cause shown.
In case the person in possession of the duplicate certificates refuses or fails to
surrender the same to the Register of Deeds so that a voluntary document may be
registered and a new certificate issued, Sec. 107, Chapter 10, of P.D. No. 1529
clearly states that the party in interest may file a petition in court to compel
surrender of the same to the Register of Deeds. The court, after hearing, may order
the registered owner or any person withholding the duplicate certificate to
surrender the same and direct the entry of a new certificate or memorandum upon
such surrender.
Under Sec. 2 of P.D. No. 1529, it is now provided that "Courts of First Instance
(now Regional Trial Courts) shall have exclusive jurisdiction over all applications
for original registration of titles to lands, including improvements and interest
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therein and over all petitions filed after original registration of title, with power to
hear and determine all questions arising upon such applications or petitions."
Aimed at avoiding multiplicity of suits the change has simplified registration
proceedings by conferring upon the regional trial courts the authority to act not
only on applications for original registration but also over all petitions filed after
original registration of title, with power to hear and determine all questions arising
upon such applications or petitions.
The principal action filed by INK before the trial court was for specific
performance with damages based on a document of sale. Such action was well
within the exclusive jurisdictions of the Regional Trial Court. When INK filed a
motion for the issuance of an order from the same court to compel the holder of the
duplicate certificates of title to surrender the same to the Register of Deeds for the
registration of the deed of sale subject of the principal action, the motion was a
necessary incident to the main case.
Right of INC over the owners duplicate copies
The order of the trial court directing the surrender of the certificates to the Register
of Deeds in order that the deed of sale in favor of INK can be registered, cannot in
any way prejudice her rights and interests as a mortgagee of the lots. Any lien
annotated on the previous certificates of title which subsists should be incorporated
in or carried over to the new transfer certificates of title. 9 It is clear therefore that
the surrender by petitioner of the certificates of title to the Register of Deeds as
ordered by the trial court will not create any substantial injustice to her. To grant
the petition and compel INK to file a new action in order to obtain the same reliefs
it asked in the motion before the trial court is to encourage litigations where no
substantial rights are prejudiced. This end should be avoided.
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48. ARRAZOLA vs BERNAS

FACTS:

ElviroBernas disinherited his adopted daughter Teresita and when he was 79 years
old , he executed a notarized will instituting his brother and sister as heirs to all his
properties including the lots which he had involuntary transferred to Teresita. In
1967, Elviro died. On December, 1967, Pedro A. Bernas filed with the register of
deeds of Capiz a verified notice of adverse claim. A copy of the will was attached
to the adverse claim.

After the register of deeds had annotated the adverse claim on the transfer
certificates of title, Teresita filed in the cadastral and probate proceedings a motion
for the cancellation of the annotation of adverse claim. The motion was predicated
on the grounds that she was not served with prior notice" of the adverse claim and
that there was "no petition for approval or justification" filed with the court. Pedro
A. Bernas and Soledad BernasAlivio opposed the motion. The lower court in its
order of August 20, 1968 granted it and ordered the register of deeds to cancel the
annotation. The oppositors appealed.

ISSUE: Whether or not expected hereditary rights do not constitute adverse claim

RULING:

Yes, the contingent, expectant and inchoate hereditary rights of the children of
a living parent do not constitute an adverse claim during his lifetime which could
be annotated on the titles covering the parent's land. That is an illustration of a
frivolous or vexatious adverse claim.

In the instant case, the lower court ordered the cancellation of the adverse claim
because the will of ElviroBernas had not yet been probated. It reasoned out that
before the probate Pedro A. Bernas and Soledad BernasAlivio are merely
presumptive heirs with a "contingent, expectant and inchoate" interest in the two
lots.
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The purpose of annotating the adverse claim on the title of the disputed land is to
apprise third persons that there is a controversy over the ownership of the land and
to preserve and protect the right of the adverse claimant during the pendency of the
controversy. It is a notice to third persons that any transaction regarding the
disputed land is subject to the outcome of the dispute.

It has been said that the annotation of an adverse claim should not be confused
with its validity which should be litigated in a proper proceeding and that the
registration of an invalid adverse claim is not as harmful as the non-registration of
a valid one.

49. ISABELITA CUNANAN v. JUMPING JAP TRADING

CORPORATION, GR No. 173834, 2009-04-24
Facts:

Carmencita Fradejas Nemoto (Carmencita) is the registered owner of a 618 square

meter-lot, with the house and improvements thereon, located at No. 167 Pili Drive,
Ayala Alabang Village, Muntinlupa City and covered by Transfer Certificate of
Title (TCT) No.213246... acquired the property by virtue of a deed of sale executed
in her favor by Metropolitan Land Corporation (MLC)

22 March 2001

Jumping Jap Trading Corporation... represented by its President, Rueben Protacio...

filed Civil Case No. 01-098 with the Regional Trial Court (RTC) of Muntinlupa
City seeking the annulment of both the deed of sale and TCT No.213246, as well
as the reconveyance of the property... anchored the complaint on its alleged
superior right over the property by virtue of the execution of a previous deed of
conditional sale by MLC in its favor and its having paid P18,300,000.00 by itself
using... corporate funds and P5,000,000.00 by ProtacioP23,300,000.00... more than
the P12,600,000.00 that the spouses Nemoto had paid on the purchase price of
P35,900,000.00. allegedly agreed that Nobuyasu Nemoto... one of respondent's...
stockholders and also a friend of Protacio, would pay the remaining installment of
P12,600,000.00 and reimburse the amount already paid by respondent and Protacio
while the title, to be placed in the name of the minor daughter of spouses Nemoto,
Sakura Nemoto, would be in... respondent's possession.

MLC did not deliver the title to the property to respondent despite repeated oral
demands. Respondent later discovered that a deed of absolute sale was executed
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between MLC and Carmencita with a stated consideration of P12,500,000.00 and

that TCT No. 213246 was issued in the name of Carmencita.

Despite several demands and assurances in a span of more than three years, the
spouses Nemoto still failed to pay the purchase price advanced by respondent and
Protacio amounting to P23,400,000.00.

19 April 2001, respondent caused the annotation of a notice of lis pendens

involving Civil Case No. 01-098 on TCT No. 213246. Despite the notice of lis
pendens Carmencita executed a deed of real estate mortgage... dated 20 July 2001
over... the property in favor of petitioners Isabelita and Carolyn Cunanan (the
Cunanans) as security for the payment of a P10 million loan plus interest, as well
as all subsequent loans and obligations.

also executed a promissory note dated 22 July 2001

18 July 2001, the RTC dismissed the case and ordered the cancellation of the
notice of lis pendens. 23 July 2001, the RTC issued an amended order...
specifically ordering the Register of Deeds of Muntinlupa City to immediately
cancel the notice of lis pendens on TCT No. 213246

RTC subsequently granted respondent's motion for reconsideration of the amended

order of dismissal in its order dated 24 October 2001. the Register of Deeds of
Muntinlupa City re-annotated the notice of lis pendens on 12 December

2001.[13]... the Cunanans effected the extra-judicial foreclosure of the mortgage on

the property on 17 July 2002... respondent to file on 12 August 2002 before the
RTC of Muntinlupa City Civil Case No. 02-189... seeking the nullification of
mortgage deed and the extra-judicial foreclosure proceedings, as well as the
cancellation of the mortgage deed annotation on TCT No. 213246 6 April 2004, the
RTC rendered its decision... in favor of respondent.

found that the execution of the real estate mortgage was done in bad faith for Civil
Case No. 01-098 was still pending as the dismissal thereof was not yet final and
executory... and the notice of lis pendens was not yet cancelled by the Register of
Deeds.

Court of Appeals affirmed the decision of the trial court per its decision[19] of 7
April 2006.

Found that the notice of lis pendens was subsisting at the time the contract of real
estate mortgage was executed between the Cunanans... and Carmencita.

when the notice of lis pendens was cancelled on 23 July 2001, the Cunanans were
aware that the proceedings in Civil Case No. 01-098 was not yet terminated, as in
fact, the notice was subsequently re-annotated after the RTC had granted
respondent's... motion for reconsideration.
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Court of Appeals held that at the time of the extra-judicial foreclosure sale of the
property the notice of lis pendens had been reinstated by the RTC and this tainted
the Cunanans' status as purchasers at the foreclosure sale... with bad faith.

Issues:

whether or not the Cunanans are bound by the notice of lis pendens which was
ordered cancelled by the RTC.

Ruling:

is pen... lis pendens... announcement to the whole world that a particular real
property is in litigation, serving 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 the said property.

filing of a notice of lis pendens charges all strangers with a notice of the particular
litigation referred to therein and, therefore, any right they may thereafter acquire
on the property is subject to... the eventuality of the suit.

founded upon public policy and necessity, the purpose of which is 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.

Section 77

(P.D.) No. 1529... lis pendens shall be deemed cancelled only 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 if there was a final judgment in favor of
the defendant or the action was disposed of terminating finally all rights of the
plaintiff over the property in litigation.

Court should deny the petition.

Order

18 July 2001 dismissing the complaint and directing the cancellation of the notice
of... lis pendens did not improve the situations of the Cunanans simply because
said Order was not registered at all and therefore did not preclude the notice of lis
pendens from continuing in effect.

Neither did the issuance and registration of the amended Order dated 23 July 2001,
although it even commanded the Register of Deeds to cancel the notice of lis
pendens apart from containing the same directives as those in the 18 July 2001
Order. result in the present case would still be the same even if the parties executed
the mortgage deed after the Register of Deeds had cancelled the notice of lis
pendens.
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It is true that one who deals with property registered under the Torrens system need
not go beyond... the same, but only has to rely on the face of the title.

charged with notice only of such burdens and claims as are annotated on the title.

principle does not apply when the party has actual knowledge of facts and
circumstances that would impel a reasonably... cautious man to make such inquiry
or when the purchaser or mortgagee has knowledge of a defect or the lack of title
in his vendor or mortgagor or of sufficient facts to induce a reasonably prudent
man to inquire into the status of the title of the property in litigation.

the mortgage deed was executed even before the Register of Deeds had the chance
to cancel the annotated... notice of lis pendens on the title of the disputed property.

Court AFFIRMS the decision of the Court of Appeals

50. SAN LORENZO DEVELOPMENT CORPORATION, petitioner,

vs.
COURT OF APPEALS, PABLO S. BABASANTA, SPS. MIGUEL LU and
PACITA ZAVALLA LU, respondents

G.R. No. 124242 January 21, 2005

FACTS

On 20 August 1986, the Spouses Lu purportedly sold two parcels of

land to respondent Pablo Babasanta, for the price of fifteen pesos (P15.00)
per square meter. Babasanta made a downpayment of (P50,000.00) as
evidenced by a memorandum receipt issued by Pacita Lu of the same date.

Babasanta wrote a letter to Pacita Lu to demand the execution of a

final deed of sale in his favor so that he could effect full payment of the
purchase price. In response, Pacita Lu wrote a letter to Babasanta wherein
she reminded Babasanta that when the balance of the purchase price became
due, he requested for a reduction of the price and when she refused,
Babasanta backed out of the sale

herein petitioner San Lorenzo Development Corporation (SLDC) filed

a Motion for Intervention. SLDC alleged that it had legal interest in the
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subject matter under litigation because on 3 May 1989, the two parcels of
land involved had been sold to it in a Deed of Absolute Sale with Mortgage.
It alleged that it was a buyer in good faith and for value and therefore it had
a better right over the property in litigation

Respondent Babasanta, however, argued that SLDC could not have

acquired ownership of the property because it failed to comply with the
requirement of registration of the sale in good faith. He emphasized that at
the time SLDC registered the sale in its favor on 30 June 1990, there was
already a notice of lis pendens annotated on the titles of the property made
as early as 2 June 1989. Hence, petitioners registration of the sale did not
confer upon it any right.

ISSUE:

Did the registration of the sale after the annotation of the notice of lis pendens
obliterate the effects of delivery and possession in good faith which admittedly had
occurred prior to SLDCs knowledge of the transaction in favor of Babasanta?

HELD:NO

It must be stressed that as early as 11 February 1989, the Spouses Lu

executed the Option to Buy in favor of SLDC upon receiving P316,160.00 as
option money from SLDC. After SLDC had paid more than one half of the
agreed purchase price, the Spouses Lu subsequently executed on 3 May
1989 a Deed of Absolute Sale in favor or SLDC. At the time both deeds
were executed, SLDC had no knowledge of the prior transaction of the
Spouses Lu with Babasanta. Simply stated, from the time of execution of
the first deed up to the moment of transfer and delivery of possession of
the lands to SLDC, it had acted in good faith and the subsequent
annotation of lis pendens has no effect at all on the consummated sale
between SLDC and the Spouses Lu.

A purchaser in good faith 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 claim or interest of some other person in the property.

We rule that SLDC qualifies as a buyer in good faith since there is no

evidence extant in the records that it had knowledge of the prior transaction
in favor of Babasanta. At the time of the sale of the property to SLDC, the
vendors were still the registered owners of the property and were in fact in
possession of the lands.

In assailing knowledge of the transaction between him and the

Spouses Lu, Babasanta apparently relies on the principle of constructive
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notice incorporated in Section 52 of the Property Registration Decree (P.D.

No. 1529) which reads, thus:

Sec. 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.

However, the constructive notice operates as such by the express

wording of Section 52 from the time of the registration of the notice of lis
pendens which in this case was effected only on 2 June 1989, at which time
the sale in favor of SLDC had long been consummated insofar as the
obligation of the Spouses Lu to transfer ownership over the property to
SLDC is concerned.