SECOND DIVISION question in favor of the Sajonas couple on September 4, 1984.

 The deed 8. That the annotation of the levy on execution which was carried over to
of absolute sale was registered almost a year after, or on August 28, the title of said plaintiffs is illegal and invalid and was made in utter bad
1985. faith, in view of the existence of the Adverse Claim annotated by the
plaintiffs on the corresponding title of the Uychocde spouses;

Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed

[G. R. No. 102377. July 5, 1996]
Civil Case No. Q-28850 for collection of sum of money against Ernesto 9. That a demand was made by the plaintiffs upon the defendant
Uychocde. On June 25, 1980, a Compromise Agreement was entered into Domingo A. Pilares, to cause the cancellation of the said notice of levy
by the parties in the said case under which Ernesto Uychocde but the latter, without justifiable reason and with the sole purpose of
acknowledged his monetary obligation to Domingo Pilares amounting to harassing and embarrassing the plaintiffs ignored and refused plaintiffs
P27,800 and agreed to pay the same in two years from June 25, 1980. demand;
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs.  THE When Uychocde failed to comply with his undertaking in the compromise
COURT OF APPEALS, DOMINGO A. PILARES, SHERIFF agreement, defendant-appellant Pilares moved for the issuance of a writ
ROBERTO GARCIA OF QUEZON CITY and REGISTER OF of execution to enforce the decision based on the compromise 10. That in view of the neglect, failure and refusal of the defendant to
DEEDS OF MARIKINA, respondents. agreement, which the court granted in its order dated August 3, cause the cancellation of the notice of levy on execution, the plaintiffs
1982. Accordingly, a writ of execution was issued on August 12, 1982 by were compelled to litigate and engage the services of the undersigned
the CFI of Quezon City where the civil case was pending. Pursuant to the counsel, to protect their rights and interests, for which they agreed to
DECISION pay attorneys fees in the amount of P10,000 and appearance fees of
order of execution dated August 3, 1982, a notice of levy on execution
was issued on February 12, 1985. On February 12, 1985, defendant P500 per day in court.[3]
TORRES, JR., J.:
sheriff Roberto Garcia of Quezon City presented said notice of levy on
execution before the Register of Deeds of Marikina and the same was Pilares filed his answer with compulsory counterclaim [4] on March
A word or group of words conveys intentions. When used annotated at the back of TCT No. 79073 as Entry No. 123283. 8, 1986, raising special and affirmative defenses, the relevant portions of
truncatedly, its meaning disappears and breeds conflict. Thus, it is which are as follows:
written - By thy words shalt thou be justified, and by thy words shalt thou
be condemned. (Matthew, 12:37) When the deed of absolute sale dated September 4 1984 was registered
on August 28, 1985, TCT No. N-79073 was cancelled and in lieu thereof, 10. Plaintiff has no cause of action against herein defendants;
Construing the new words of a statute separately is the raison TCT No. N-109417 was ssued in the name of the Sajonas couple. The
detre of this appeal. notice of levy on execution annotated by defendant sheriff was carried
over to the new title. On October 21, 1985, the Sajonas couple filed a 11. Assuming, without however admitting that they filed an adverse
Essentially, the case before us is for cancellation of the inscription Third Party Claim with the sheriff of Quezon City, hence the auction sale claim against the property covered by TCT No. 79073 registered under
of a Notice of Levy on Execution from a certificate of Title covering a of the subject property did not push through as scheduled. the name of spouses Ernesto Uychocde on August 27, 1984, the same
parcel of real property. The inscription was caused to be made by the ceases to have any legal force and effect (30) days thereafter pursuant to
private respondent on Transfer Certificate of Title No. N-79073 of the Section 70 of P.D. 1529;
Register of Deeds of Marikina, issued in the name of the spouses Ernesto On January 10, 1986, the Sajonas spouses demanded the cancellation of
the notice of levy on execution upon defendant-appellant Pilares,
B. Uychocde and Lucita Jarin, and was later carried over to and
through a letter to their lawyer, Atty. Melchor Flores. Despite said 12. The Notice of Levy annotated at the back of TCT No. 79073 being
annotated on Transfer Certificate of Title No. N-109417 of the same
demand, defendant-appellant Pilares refused to cause the cancellation of effected pursuant to the Writ of Execution dated August 31, 1982, duly
registry, issued in the name of the spouses Alfredo Sajonas and Conchita
said annotation. In view thereof, plaintiffs-appellees filed this complaint issued by the CFI (now RTC) of Quezon City proceeding from a decision
R. Sajonas, who purchased the parcel of land from the Uychocdes, and
dated January 11, 1986 on February 5, 1986. [1] rendered in Civil Case No. 28859 in favor of herein defendant against
are now the petitioners in this case.
Ernesto Uychocde, is undoubtedly proper and appropriate because the
The facts are not disputed, and are hereby reproduced as follows: property is registered in the name of the judgment debtor and is not
The Sajonases filed their complaint[2] in the Regional Trial Court of among those exempted from execution;
Rizal, Branch 71, against Domingo Pilares, the judgment creditor of the
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin Uychocdes. The relevant portion of the complaint alleges:
agreed to sell a parcel of residential land located in Antipolo, Rizal to the 13. Assuming without admitting that the property subject matter of this
spouses Alfredo Sajonas and Conchita R. Sajonas on installment basis as case was in fact sold by the registered owner in favor of the herein
7. That at the time the notice of levy was annotated by the defendant, plaintiffs, the sale is the null and void (sic) and without any legal force
evidenced by a Contract to Sell dated September 22, 1983. The property the Uychocde spouses, debtors of the defendant, have already
was registered in the names of the Uychocde spouses under TCT No. N- and effect because it was done in fraud of a judgment creditor, the
transferred, conveyed and assigned all their title, rights and interests to defendant Pilares.[5]
79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984, the plaintiffs and there was no more title, rights or interests therein
the Sajonas couple caused the annotation of an adverse claim based on which the defendant could levy upon;
the said Contract to Sell on the title of the subject property, which was Pilares likewise sought moral and exemplary damages in a
inscribed as Entry No. 116017. Upon full payment of the purchase price, counterclaim against the Sajonas spouses. The parties appeared at pre-
the Uychocdes executed a Deed of Sale involving the property in
trial proceedings on January 21, 1987, [6] after which, trial on the merits Said defendant is likewise ordered to pay the costs. arising from Civil Case No. Q-28850 [16]against the Uychocdes, from whose
ensued. title, petitioners derived their own.

The trial court rendered its decision on February 15, 1989. [7] It Dissatisfied, Pilares appealed to the Court of Appeals [9], assigning Concededly, annotation of an adverse claim is a measure
found in favor of the Sajonas couple, and ordered the cancellation of the errors on the part of the lower court. The appellate court reversed the designed to protect the interest of a person over a piece of real property
Notice of Levy from Transfer Certificate of Title No. N-109417. lower courts decision, and upheld the annotation of the levy on where the registration of such interest or right is not otherwise provided
execution on the certificate of title, thus: for by the Land Registration Act or Act 496 (now P.D. 1529 or the
The court a quo stated, thus: Property Registration Decree), and serves a warning to third parties
dealing with said property that someone is claiming an interest on the
WHEREFORE, the decision of the lower court dated February 15, 1989 is
same or a better right than that of the registered owner thereof. Such
After going over the evidence presented by the parties, the court finds reversed and set aside and this complaint is dismissed.
notice is registered by filing a sworn statement with the Register of
that although the title of the subject matter of the Notice of Levy on
Deeds of the province where the property is located, setting forth the
Execution was still in the name of the Spouses Uychocde when the same
Costs against the plaintiffs-appellees."[10] basis of the claimed right together with other dates pertinent thereto. [17]
was annotated on the said title, an earlier Affidavit of Adverse Claim was
annotated on the same title by the plaintiffs who earlier bought said The registration of an adverse claim is expressly recognized under
property from the Uychocdes. The Sajonas couple are now before us, on a Petition for Review Section 70 of P.D. No. 1529. *
on Certiorari[11], praying inter alia to set aside the Court of Appeals
decision, and to reinstate that of the Regional Trial Court. Noting the changes made in the terminology of the provisions of
It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil.
the law, private respondent interpreted this to mean that a Notice of
442) that actual notice of an adverse claim is equivalent to registration [12]
Private respondent filed his Comment  on March 5, 1992, after Adverse Claim remains effective only for a period of 30 days from its
and the subsequent registration of the Notice of Levy could not have any
which, the parties were ordered to file their respective annotation, and does not automatically lose its force afterwards. Private
legal effect in any respect on account of prior inscription of the adverse
Memoranda. Private respondent complied thereto on April 27, 1994 [13], respondent further maintains that the notice of adverse claim was
claim annotated on the title of the Uychocdes.
while petitioners were able to submit their Memorandum on September annotated on August 27, 1984, hence, it will be effective only up to
29, 1992.[14] September 26, 1984, after which it will no longer have any binding force
xxx xxx xxx and effect pursuant to Section 70 of P.D. No. 1529. Thus, the sale in favor
Petitioner assigns the following as errors of the appellate court, of the petitioners by the Uychocdes was made in order to defraud their
to wit: creditor (Pilares), as the same was executed subsequent to their having
On the issue of whether or not plaintiffs are buyers in good faith of the defaulted in the payment of their obligation based on a compromise
property of the spouses Uychocde even notwithstanding the claim of the I
agreement.[18]
defendant that said sale executed by the spouses was made in fraud of
creditors, the Court finds that the evidence in this instance is bare of any The respondent appellate court upheld private respondents
THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY
indication that said plaintiffs as purchasers had notice beforehand of the theory when it ruled:
PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS
claim of the defendant over said property or that the same is involved in
ABSOLUTE INASMUCH AS IT FAILED TO READ OR CONSTRUE THE
a litigation between said spouses and the defendant. Good faith is the
PROVISION IN ITS ENTIRETY AND TO RECONCILE THE APPARENT The above stated conclusion of the lower court is based on the premise
opposite of fraud and bad faith, and the existence of any bad faith must
INCONSISTENCY WITHIN THE PROVISION IN ORDER TO GIVE EFFECT TO IT that the adverse claim filed by plaintiffs-appellees is still effective despite
be established by competent proof.[8] (Cai vs. Henson, 51 Phil 606)
AS A WHOLE. the lapse of 30 days from the date of registration. However, under the
provisions of Section 70 of P.D. 1529, an adverse claim shall be effective
xxx xxx xxx only for a period of 30 days from the date of its registration. The
II
provision of this Decree is clear and specific.
In view of the foregoing, the Court renders judgment in favor of the
THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO.
plaintiffs and against the defendant Pilares, as follows: xxx xxx xxx
1529 IN SUCH WISE ON THE GROUND THAT IT VIOLATES PETITIONERS
SUBSTANTIAL RIGHT TO DUE PROCESS.
1. Ordering the cancellation of the Notice of Levy on Execution annotated It should be noted that the adverse claim provision in Section 110 of the
on Transfer Certificate of Title No. N-109417. Land Registration Act (Act 496) does not provide for a period of
Primarily, we are being asked to ascertain who among the parties
in suit has a better right over the property in question. The petitioners effectivity of the annotation of an adverse claim. P.D. No. 1529, however,
derive their claim from the right of ownership arising from a perfected now specifically provides for only 30 days. If the intention of the law was
2. Ordering said defendant to pay the amount of P5,000 as attorneys
contract of absolute sale between them and the registered owners of the for the adverse claim to remain effective until cancelled by petition of the
fees.
property, such right being attested to by the notice of adverse interested party, then the aforecited provision in P.D. No. 1529 stating
claim[15] annotated on TCT No. N-79073 as early as August 27, the period of effectivity would not have been inserted in the law.
3. Dismissing the Counterclaim interposed by said defendant. 1984. Private respondent on the other hand, claims the right to levy on
the property, and have it sold on execution to satisfy his judgment credit,
Since the adverse claim was annotated On August 27, 1984, it was The act of registration shall be the operative act to convey or affect the The question may be posed, was the adverse claim inscribed in
effective only until September 26, 1984. Hence, when the defendant land in so far as third persons are concerned, and in all cases under the the Transfer Certificate of Title No. N-109417 still in force when private
sheriff annotated the notice of levy on execution on February 12, 1985, Decree, the registration shall be made in the office of the Register of respondent caused the notice of levy on execution to be registered and
said adverse claim was already ineffective. It cannot be said that actual Deeds for the province or city where the land lies. (Italics supplied by the annotated in the said title, considering that more than thirty days had
or prior knowledge of the existence of the adverse claim on the lower court.) already lapsed since it was annotated? This is a decisive factor in the
Uychocdes title is equivalent to registration inasmuch as the adverse resolution of this instant case.
claim was already ineffective when the notice of levy on execution was
annotated. Thus, the act of defendant sheriff in annotating the notice of Under the Torrens system, registration is the operative act which If the adverse claim was still in effect, then respondents are
levy on execution was proper and justified. gives validity to the transfer or creates a lien upon the land. A person charged with knowledge of pre-existing interest over the subject
dealing with registered land is not required to go behind the register to property, and thus, petitioners are entitled to the cancellation of the
determine the condition of the property. He is only charged with notice notice of levy attached to the certificate of title.
The appellate court relied on the rule of statutory construction of the burdens on the property which are noted on the face of the
that Section 70 is specific and unambiguous and hence, needs no register or certificate of title.[20] For a definitive answer to this query, we refer to the law
interpretation nor construction. [19] Perforce, the appellate court stated, itself. Section 110 of Act 496 or the Land Registration Act reads:
the provision was clear enough to warrant immediate enforcement, and Although we have relied on the foregoing rule, in many cases
no interpretation was needed to give it force and effect. A fortiori, an coming before us, the same, however, does not fit in the case at
adverse claim shall be effective only for a period of thirty (30) days from bar. While it is the act of registration which is the operative act which Sec. 110. Whoever claims any part or interest in registered lands adverse
the date of its registration, after which it shall be without force and conveys or affects the land insofar as third persons are concerned, it is to the registered owner, arising subsequent to the date of the original
effect. Continuing, the court further stated; likewise true, that the subsequent sale of property covered by a registration, may, if no other provision is made in this Act for registering
Certificate of Title cannot prevail over an adverse claim, duly sworn to the same, make a statement in writing setting forth fully his alleged right
and annotated on the certificate of title previous to the sale. [21] While it is or interest, and how or under whom acquired, and a reference to the
. . . clearly, the issue now has been reduced to one of preference- which true that under the provisions of the Property Registration Decree, deeds volume and page of the certificate of title of the registered owner, and a
should be preferred between the notice of levy on execution and the of conveyance of property registered under the system, or any interest description of the land in which the right or interest is claimed.
deed of absolute sale. The Deed of Absolute Sale was executed on therein only take effect as a conveyance to bind the land upon its
September 4, 1984, but was registered only on August 28, 1985, while registration, and that a purchaser is not required to explore further than
the notice of levy on execution was annotated six (6) months prior to the The statement shall be signed and sworn to, and shall state the adverse
what the Torrens title, upon its face, indicates in quest for any hidden
registration of the sale on February 12, 1985. claimants residence, and designate a place at which all notices may be
defect or inchoate right that may subsequently defeat his right thereto,
served upon him. The statement shall be entitled to registration as an
nonetheless, this rule is not absolute. Thus, one who buys from the
adverse claim, and the court, upon a petition of any party in interest,
registered owner need not have to look behind the certificate of title, he
In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that shall grant a speedy hearing upon the question of the validity of such
is, nevertheless, bound by the liens and encumbrances annotated
where a sale is recorded later than an attachment, although the former is adverse claim and shall enter such decree therein as justice and equity
thereon. One who buys without checking the vendors title takes all the
of an earlier date, the sale must give way to the attachment on the may require. If the claim is adjudged to be invalid, the registration shall
risks and losses consequent to such failure.[22]
ground that the act of registration is the operative act to affect the be cancelled. If in any case, the court after notice and hearing shall find
land. A similar ruling was restated in Campillo vs. Court of Appeals (129 that a claim thus registered was frivolous or vexatious, it may tax the
In PNB vs. Court of Appeals, we held that the subsequent sale of
SCRA 513). adverse claimant double or treble the costs in its discretion.
the property to the De Castro spouses cannot prevail over the adverse
claim of Perez, which was inscribed on the banks certificate of title on
xxx xxx xxx October 6, 1958. That should have put said spouses on notice, and they The validity of the above-mentioned rules on adverse claims has
can claim no better legal right over and above that of Perez. The TCT to be reexamined in the light of the changes introduced by P.D. 1529,
issued in the spouses names on July, 1959 also carried the said which provides:
The reason for these rulings may be found in Section 51 of P.D. 1529, annotation of adverse claim. Consequently, they are not entitled to any
otherwise known as the Property Registration Decree, which provides as interest on the price they paid for the property.[23]
follows: Sec. 70 Adverse Claim- Whoever claims any part or interest in registered
Then again, in Gardner vs. Court of Appeals, we said that the land adverse to the registered owner, arising subsequent to the date of
statement of respondent court in its resolution of reversal that until the the original registration, may, if no other provision is made in this decree
Section 51. Conveyance and other dealings by the registered owner.- An validity of an adverse claim is determined judicially, it cannot be for registering the same, make a statement in writing setting forth fully
owner of registered land may convey, mortgage, lease, charge, or considered a flaw in the vendors title contradicts the very object of his alleged right or interest, and how or under whom acquired, a
otherwise deal with the same in accordance with existing laws. He may adverse claims. As stated earlier, the annotation of an adverse claim is a reference to the number of certificate of title of the registered owner,
use such forms of deeds, mortgages, leases or other voluntary measure designed to protect the interest of a person over a piece of real the name of the registered owner, and a description of the land in which
instruments as are sufficient in law. But no deed, mortgage, lease or property, and serves as a notice and warning to third parties dealing with the right or interest is claimed.
other voluntary instrument, except a will purporting to convey or affect said property that someone is claiming an interest on the same or has a
registered land shall take effect as a conveyance or bind the land, but better right than the registered owner thereof. A subsequent sale cannot
shall operate only as a contract between the parties and as evidence of prevail over the adverse claim which was previously annotated in the The statement shall be signed and sworn to, and shall state the adverse
authority to the Register of Deeds to make registration. certificate of title over the property.[24] claimants residence, and a place at which all notices may be served upon
him. This statement shall be entitled to registration as an adverse claim been automatically terminated by mere lapse of time, the law would not for by the Land Registration Act or Act 496 (now P.D. 1529 or the
on the certificate of title. The adverse claim shall be effective for a period have required the party in interest to do a useless act. Property Registration Decree), and serves as a warning to third parties
of thirty days from the date of registration. After the lapse of said period, dealing with said property that someone is claiming an interest or the
the annotation of adverse claim may be cancelled upon filing of a A statutes clauses and phrases must not be taken separately, but same or a better right than the registered owner thereof. [31]
verifiedpetition therefor by the party in interest: Provided, however, that in its relation to the statutes totality. Each statute must, in fact, be
after cancellation, no second adverse claim based on the same ground construed as to harmonize it with the pre-existing body of laws.Unless The reason why the law provides for a hearing where the validity
shall be registered by the same claimant. clearly repugnant, provisions of statutes must be reconciled. The printed of the adverse claim is to be threshed out is to afford the adverse
pages of the published Act, its history, origin, and its purposes may be claimant an opportunity to be heard, providing a venue where the
examined by the courts in their construction.[27]An eminent authority on propriety of his claimed interest can be established or revoked, all for the
Before the lapse of thirty days aforesaid, any party in interest may file a the subject matter states the rule candidly: purpose of determining at last the existence of any encumbrance on the
petition in the Court of First Instance where the land is situated for the title arising from such adverse claim. This is in line with the provision
cancellation of the adverse claim, and the court shall grant a speedy immediately following:
hearing upon the question of the validity of such adverse claim, and shall A statute is passed as a whole and not in parts or sections, and is
render judgment as may be just and equitable. If the adverse claim is animated by one general purpose and intent. Consequently, each part or
adjudged to be invalid, the registration thereof shall be ordered section should be construed in connection with every other part or Provided, however, that after cancellation, no second adverse claim shall
cancelled. If, in any case, the court, after notice and hearing shall find section so as to produce a harmonious whole. It is not proper to confine be registered by the same claimant.
that the adverse claim thus registered was frivolous, it may fine the its intention to the one section construed. It is always an unsafe way of
claimant in an amount not less than one thousand pesos, nor more than construing a statute or contract to divide it by a process of etymological
dissection, into separate words, and then apply to each, thus separated Should the adverse claimant fail to sustain his interest in the
five thousand pesos, in its discretion. Before the lapse of thirty days, the
from the context, some particular meaning to be attached to any word or property, the adverse claimant will be precluded from registering a
claimant may withdraw his adverse claim by filing with the Register of
phrase usually to be ascertained from the context.[28] second adverse claim based on the same ground.
Deeds a sworn petition to that effect. (Italics ours)
It was held that validity or efficaciousness of the claim may only
In construing the law aforesaid, care should be taken that every Construing the provision as a whole would reconcile the apparent be determined by the Court upon petition by an interested party, in
part thereof be given effect and a construction that could render a inconsistency between the portions of the law such that the provision on which event, the Court shall order the immediate hearing thereof and
provision inoperative should be avoided, and inconsistent provisions cancellation of adverse claim by verified petition would serve to qualify make the proper adjudication as justice and equity may warrant. And it is
should be reconciled whenever possible as parts of a harmonious whole. the provision on the effectivity period. The law, taken together, simply only when such claim is found unmeritorious that the registration of the
[25]
 For taken in solitude, a word or phrase might easily convey a meaning means that the cancellation of the adverse claim is still necessary to adverse claim may be cancelled, thereby protecting the interest of the
quite different from the one actually intended and evident when a word render it ineffective, otherwise, the inscription will remain annotated and adverse claimant and giving notice and warning to third parties. [32]
or phrase is considered with those with which it is associated. [26] In 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 In sum, the disputed inscription of adverse claim on the Transfer
ascertaining the period of effectivity of an inscription of adverse claim,
cancellation is no longer necessary and the process of cancellation would Certificate of Title No. N-79073 was still in effect on February 12, 1985
we must read the law in its entirety. Sentence three, paragraph two of
be a useless ceremony.[29] when Quezon City Sheriff Roberto Garcia annotated the notice of levy on
Section 70 of P.D. 1529 provides:
execution thereto. Consequently, he is charged with knowledge that the
It should be noted that the law employs the phrase may be property sought to be levied upon on execution was encumbered by an
The adverse claim shall be effective for a period of thirty days from the cancelled, which obviously indicates, as inherent in its decision making interest the same as or better than that of the registered owner
date of registration. power, that the court may or may not order the cancellation of an thereof. Such notice of levy cannot prevail over the existing adverse
adverse claim, notwithstanding such provision limiting the effectivity of claim inscribed on the certificate of title in favor of the petitioners. This
an adverse claim for thirty days from the date of registration. The court can be deduced from the pertinent provision of the Rules of Court, to
At first blush, the provision in question would seem to restrict the wit:
cannot be bound by such period as it would be inconsistent with the very
effectivity of the adverse claim to thirty days. But the above provision authority vested in it. A fortiori, the limitation on the period of effectivity
cannot and should not be treated separately, but should be read in is immaterial in determining the validity or invalidity of an adverse claim
relation to the sentence following, which reads: Section 16. Effect of levy on execution as to third persons- The levy on
which is the principal issue to be decided in the court hearing. It will
execution shall create a lien in favor of the judgment creditor over the
therefore depend upon the evidence at a proper hearing for the court to
right, title and interest of the judgment debtor in such property at the
After the lapse of said period, the annotation of adverse claim may be determine whether it will order the cancellation of the adverse claim or
time of the levy, subject to liens or encumbrances then existing. (Italics
cancelled upon filing of a verified petition therefor by the party in not.[30]
supplied)
interest.
To interpret the effectivity period of the adverse claim as
absolute and without qualification limited to thirty days defeats the very To hold otherwise would be to deprive petitioners of their
If the rationale of the law was for the adverse claim to ipso purpose for which the statute provides for the remedy of an inscription property, who waited a long time to complete payments on their
facto lose force and effect after the lapse of thirty days, then it would not of adverse claim, as the annotation of an adverse claim is a measure property, convinced that their interest was amply protected by the
have been necessary to include the foregoing caveat to clarify and designed to protect the interest of a person over a piece of real property inscribed adverse claim.
complete the rule. For then, no adverse claim need be cancelled. If it has where the registration of such interest or right is not otherwise provided
 As lucidly observed by the trial court in the challenged decision: A - After seeing the site and after verifying from the
Register of Deeds in Marikina that it is free from
encumbrances, that was the time we decided.
True, the foregoing section provides that an adverse claim shall be
effective for a period of thirty days from the date of registration. Does Q - How soon after you were offered this lot did you verify
this mean however, that the plaintiffs thereby lost their right over the the exact location and the genuineness of the
property in question? Stated in another, did the lapse of the thirty day title, as soon after this was offered to you?
period automatically nullify the contract to sell between the plaintiffs
and the Uychocdes thereby depriving the former of their vested right A - I think its one week after they were offered.[35]
over the property?
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
It is respectfully submitted that it did not.[33] 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
As to whether or not the petitioners are buyers in good faith of interest of some other person in the property. [36] Good faith consists in
the subject property, the same should be made to rest on the findings of an honest intention to abstain from taking any unconscientious
the trial court. As pointedly observed by the appellate court, there is no advantage of another.[37] Thus, the claim of the private respondent that
question that plaintiffs-appellees were not aware of the pending case the sale executed by the spouses was made in fraud of creditors has no
filed by Pilares against Uychocde at the time of the sale of the property basis in fact, there being no evidence that the petitioners had any
by the latter in their favor. This was clearly elicited from the testimony of knowledge or notice of the debt of the Uychocdes in favor of the private
Conchita Sajonas, wife of plaintiff, during cross-examination on April 21, respondents, nor of any claim by the latter over the Uychocdes
1988.[34] properties or that the same was involved in any litigation between said
spouses and the private respondent. While it may be stated that good
ATTY. REYES faith is presumed, conversely, bad faith must be established by
competent proof by the party alleging the same. Sans  such proof, the
Q - Madam Witness, when Engr. Uychocde and his wife petitioners are deemed to be purchasers in good faith, and their interest
offered to you and your husband the property in the subject property must not be disturbed.
subject matter of this case, they showed you the
owners transfer certificate, is it not? At any rate, the Land Registration Act (Property Registration
Decree) guarantees to every purchaser of registered land in good faith
A - Yes, sir. 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
Q - That was shown to you the very first time that this lot and those expressly mentioned in the ACT as having been preserved
was offered to you for sale? against it. Otherwise, the efficacy of the conclusiveness of the Certificate
of Title which the Torrens system seeks to insure would be futile and
A - Yes. nugatory.[38]
Q - After you were shown a copy of the title and after you ACCORDINGLY, the assailed decision of the respondent Court of
were informed that they are desirous in selling the Appeals dated October 17, 1991 is hereby REVERSED and SET ASIDE. The
same, did you and your husband decide to buy the decision of the Regional Trial Court dated February 15, 1989 finding for
same? the cancellation of the notice of levy on execution from Transfer
Certificate of Title No. N-109417 is hereby REINSTATED.
A - No, we did not decide right after seeing the title. Of
course, we visited... The inscription of the notice of levy on execution on TCT No. N-
109417 is hereby CANCELLED.
Q - No, you just answer my question. You did not
immediately decide? Costs against private respondent.
A - Yes. SO ORDERED.
Q - When did you finally decide to buy the same?
 SECOND DIVISION Respondents Barrameda moved into the property on June 2, for preliminary injunction. The petition prayed, among others, that the
1992. execution sale of the property be enjoined, the notice of levy and
G.R. No. 142687             July 20, 2006 attachment inscribed on the certificate of title be cancelled, and that
On July 13, 1992, a notice of levy with attachment on real respondents Barrameda be declared the lawful and sole owners of the
SPOUSES FRANCISCO and BERNARDINA RODRIGUEZ, petitioners,  property by virtue of a writ of execution was annotated at the back of property in question.10
vs. the certificate of title of the property in question. The writ of execution
HON. COURT OF APPEALS, SPOUSES CHRISTOPHER and MA. ANGELICA was issued by Judge Salvador Abad Santos, Regional Trial Court of The trial court ruled in favor of herein petitioners and dismissed
BARRAMEDA, and SPOUSES ANTONIO and MARIDEL Makati, Branch 65 in connection with Civil Case No. 88-2159 involving a respondents Barrameda’s petition for quieting of title. It ruled that the
CALINGO, respondents. claim by herein petitioners, Spouses Francisco and Bernardina Rodriguez, annotation of respondents Barrameda’s adverse claim at the back of the
against respondents Calingo. Judge Abad Santos issued the writ in favor certificate of title was insufficient to establish their claim over the
DECISION of petitioners Rodriguez.6 property. It said that respondents Barrameda, as buyers of the property,
should have registered the title in their names. Furthermore,
PUNO, J.: On July 21, 1992, petitioners’ counsel, Atty. Nelson A. Loyola, sent respondents Barrameda’s adverse claim had lost its efficacy after the
a letter to respondents Barrameda inquiring about the basis of their lapse of thirty days in accordance with the provisions of the Land
This is a petition for review of the decision of the Court of
occupation of the property in question. Registration Act. The trial court also found that there was collusion
Appeals dated September 7, 1999 in CA-G.R. CV No. 48772 and its
resolution dated March 31, 2000. The Court of Appeals reversed the between respondents Barrameda and respondents Calingo to transfer
On August 21, 1992, respondents Barrameda remitted to the property to defraud third parties who may have a claim against the
decision of the Regional Trial Court of Makati in Civil Case No. 92-3524. respondents Calingo the amount of P364,992.07 to complete the Calingos.11
payment of the agreed purchase price. Respondents Calingo
The facts show that herein respondent Spouses Antonio and
acknowledged receipt of said amount and waived all their rights to the The Court of Appeals, however, reversed the decision of the trial
Maridel Calingo (respondents Calingo) were the registered owners of a
property in favor of the Barrameda spouses. They also guaranteed that court. Citing the ruling in Sajonas v. Court of Appeals, 12 the appellate
house and lot located at No. 7903 Redwood Street, Marcelo Green
the property was clear and free from any liens and encumbrances, court held that respondents Barrameda’s adverse claim inscribed on the
Village, Parañaque, Metro Manila. The property was mortgaged to the
except the real estate mortgage assumed by respondents Barrameda. 7 certificate of title was still effective at the time the property was levied
Development Bank of the Philippines, which mortgage was later
absorbed by the Home Mutual Development Fund (HMDF) or Pag-ibig. on execution. It said:
On October 7, 1992, respondents Barrameda executed a joint
affidavit stating that they are the owners of the property in question by Therefore, the disputed inscription of adverse claim on TCT No.
On April 27, 1992, respondents Calingo and respondent Spouses
virtue of a deed of sale with assumption of mortgage; that they 83612/57286 was still in effect on July 13, 1992 when the Rodriguezes
Christopher and Ma. Angelica Barrameda (respondents Barrameda)
registered an affidavit of adverse claim with the Register of Deeds of caused the annotation of the notice of levy on execution thereto.
entered into a contract of sale with assumption of mortgage where the
Parañaque; that the Sheriff of the Regional Trial Court, Branch 65, Consequently, they are charged with knowledge that the property sought
former sold to the latter the property in question and the latter assumed
Makati, Sheriff Manuel C. Dolor, levied said property despite their to be levied upon on execution was encumbered by an interest the same
to pay the outstanding loan balance to the Development Bank of the
adverse claim; and that they have acquired the property long before the as or better than that of the registered owner thereof. Such notice of
Philippines.1 Respondents Barrameda issued two checks in the amounts
levy was made, and therefore, said levy was illegal. They served a copy of levy cannot prevail over the existing adverse claim inscribed on the
of P150,000.00 and P528,539.76, for which respondents Calingo issued a
the affidavit on petitioners’ counsel, Atty. Loyola, who made a reply certificate of title in favor of the Barramedas. xxx
receipt dated April 24, 1992.2
thereto on October 15, 1992.
In a letter dated April 23, 1992, respondent Antonio S. Calingo The court held, therefore, that the notice of levy could not prevail
In his letter to Christopher Barrameda dated October 15, 1992, over respondents Barrameda’s adverse claim.
informed HMDF/Pag-ibig about the sale of the property with assumption
Atty. Loyola pointed out that the alleged deed of sale with assumption of
of mortgage. Said letter, however, together with an affidavit by
mortgage was not registered with the Register of Deeds and that the Petitioners moved for a reconsideration of the appellate court’s
respondents Calingo, was served upon HMDF/Pag-ibig on October 2,
records of the HMDF show that the property is owned by the Calingo ruling, but the motion was denied.
1992.3
spouses. He urged the Barrameda spouses to confer with the petitioners
to amicably settle the controversy.8 Hence, this petition. Petitioners essentially argue that the remedy
On May 29, 1992, respondents Barrameda filed with the Register
of a petition for quieting of title was not available to respondents
of Deeds of Parañaque an affidavit of adverse claim on the property. The
On November 9, 1992, respondents Barrameda found a Notice of Barrameda as they did not have a valid title to the property in question;
adverse claim was inscribed at the back of the certificate of title as Entry
Sheriff’s Sale posted on their front gate, announcing the auction sale of that the affidavit of adverse claim inscribed by respondents Barrameda at
No. 3439. 4
their house and lot on December 3, 1992 at 10:00 in the morning. 9 the back of the certificate of title was not sufficient to establish their
On June 1, 1992, respondent Ma. Angelica Paez-Barrameda wrote claim to the property; and there was collusion between respondents
On November 20, 1992, pursuant to Rule 39, Section 17 of the Barrameda and respondents Calingo.
HMDF, Mortgage and Loans Division informing the office that they have
Revised Rules of Court, respondents Barrameda served a Notice of Third
purchased the subject property from the Calingo spouses and that they
Party Claim upon Sheriff Manuel C. Dolor, accompanied by their affidavit The principal issue that needs to be resolved in this case is
filed a notice of adverse claim with the Register of Deeds of Parañaque.
of title. whether respondents Barrameda’s adverse claim on the property should
They also sought assistance from said office as regards the procedure for
prevail over the levy on execution issued by another court in satisfaction
the full settlement of the loan arrearages and the transfer of the On December 2, 1992, respondents Barrameda filed with the of a judgment against respondents Calingo.
property in their names.5 Regional Trial Court of Makati a petition for quieting of title with prayer
 We hold that it cannot. instrument, the grantee may file with the Register of Deeds a statement Sec. 70. Adverse claim. Whoever claims any part or interest in
setting forth his adverse claim, as provided for in Section 110 of Act No. registered land adverse to the registered owner, arising subsequent to
Respondents Barrameda anchor their claim on the property on 496. In such a case, the annotation of the instrument upon the entry the date of the original registration, may, if no other provision is made in
the deed of sale with assumption of mortgage executed by them and book is sufficient to affect the real estate to which it relates, although this Decree for registering the same, make a statement in writing setting
respondents Calingo on April 27, 1992. The Property Registration Section 72 of Act No. 496 imposes upon the Register of Deeds the duty to forth his alleged right or interest, and how or under whom acquired, a
Decree13 requires that such document be registered with the Register of require the production by the [r]egistered owner of his duplicate reference to the number of the certificate of title of the registered
Deeds in order to be binding on third persons. The law provides: certificate for the inscription of the adverse claim. The annotation of an owner, the name of the registered owner, and a description of the land
adverse claim is a measure designed to protect the interest of a person in which the right or interest is claimed. xxx
Sec. 51. Conveyance and other dealings by registered owner. An over a piece of real property where the registration of such interest or
owner of registered land may convey, mortgage, lease, charge or right is not otherwise provided for by the Land Registration Act, and The deed of sale with assumption of mortgage executed by
otherwise deal with the same in accordance with existing laws. He may serves as a notice and warning to third parties dealing with said property respondents Calingo and Barrameda is a registrable instrument. In order
use such forms of deeds, mortgages, leases or other voluntary that someone is claiming an interest on the same or a better right than to bind third parties, it must be registered with the Office of the Register
instruments as are sufficient in law. But no deed, mortgage, lease, or the registered owner thereof. (emphases supplied) of Deeds. It was not shown in this case that there was justifiable reason
other voluntary instrument, except a will purporting to convey or affect why the deed could not be registered. Hence, the remedy of adverse
registered land shall take effect as a conveyance or bind the land, but In the case at bar, the reason given for the non-registration of the claim cannot substitute for registration.
shall operate only as a contract between the parties and as evidence of deed of sale with assumption of mortgage was that the owner’s
authority to the Register of Deeds to make registration. duplicate copy of the certificate of title was in the possession of HMDF. It IN VIEW WHEREOF, the petition is GRANTED. The assailed
was not shown, however, that either respondents Barrameda or decision and resolution of the Court of Appeals are SET ASIDE and the
The act of registration shall be the operative act to convey or respondents Calingo exerted any effort to retrieve the owner’s duplicate decision of the Regional Trial Court, Makati in Civil Case No. 92-3524
affect the land insofar as third persons are concerned, and in all cases copy from the HMDF for the purpose of registering the deed of sale with is REINSTATED. No cost.
under this Decree, the registration shall be made in the office of the assumption of mortgage. In fact, the parties did not even seek to obtain
Register of Deeds for the province or city where the land lies. (emphasis the consent of, much less inform, the HMDF of the sale of the property. SO ORDERED.
supplied) This, despite the provision in the contract of mortgage prohibiting the
mortgagor (respondents Calingo) from selling or disposing the property
It is admitted in this case that the deed of sale with assumption of
without the written consent of the mortgagee.15 Respondents Calingo, as
mortgage was not registered, but instead, respondents Barrameda filed
party to the contract of mortgage, are charged with the knowledge of
an affidavit of adverse claim with the Register of Deeds. The question
such provision and are bound to comply therewith. Apparently, there
now is whether the adverse claim is sufficient to bind third parties such
was haste in disposing the property that respondents Calingo informed
as herein petitioners.
HMDF of the sale only on October 2, 1992 when they served a copy of
In L.P. Leviste and Company, Inc. v. Noblejas,14 we explained their letter to said office regarding the transfer of the property to
when an inscription of an adverse claim is sufficient to affect third respondents Barrameda. There was no reason for the parties’ failure to
parties, thus: seek the approval of the HMDF to the sale as it appears from the letter of
respondent Angelica Paez-Barrameda to HMDF that they were ready to
The basis of respondent Villanueva’s adverse claim was an pay in full the balance of the loan plus interest. What is more suspect is
agreement to sell executed in her favor by Garcia Realty. An agreement that the judgment against respondents Calingo ordering them to pay the
to sell is a voluntary instrument as it is a wilful act of the registered petitioners the sum of P1,159,355.90 was rendered on January 28, 1992,
owner. As such voluntary instrument, Section 50 of Act No. 496 [now before the sale of the property on April 27, 1992. We also find it
Presidential Decree No. 1529] expressly provides that the act of unsettling that respondents Barrameda, without any reservation or
registration shall be the operative act to convey and affect the land. And inquiry, readily remitted to respondents Calingo the full payment for the
Section 55 of the same Act requires the presentation of the owner’s property on August 21, 1992 despite knowledge of the levy on execution
duplicate certificate of title for the registration of any deed or voluntary over the property in July of the same year. Any prudent buyer of real
instrument. As the agreement to sell involves an interest less than an property, before parting with his money, is expected to first ensure that
estate in fee simple, the same should have been registered by filing it the title to the property he is about to purchase is clear and free from
with the Register of Deeds who, in turn, makes a brief memorandum any liabilities and that the sellers have the proper authority to deal on
thereof upon the original and owner’s duplicate certificate of title. The the property.
reason for requiring the production of the owner’s duplicate certificate in
the registration of a voluntary instrument is that, being a wilful act of the Again, we stress that the annotation of an adverse claim is a
registered owner, it is to be presumed that he is interested in registering measure designed to protect the interest of a person over a piece of
the instrument and would willingly surrender, present or produce his property where the registration of such interest or right is not otherwise
duplicate certificate of title to the Register of Deeds in order to provided for by the law on registration of real property. Section 70 of
accomplish such registration. However, where the owner refuses to Presidential Decree No. 1529 is clear:
surrender the duplicate certificate for the annotation of the voluntary
 G.R. No. 188265 10, November 18, and December 29, 1989 and that Filinvest was entitled constitutes, by operation of law, notice to the whole world. 6 Here,
to the registrations of such sales. although the notice of adverse claim pertained to only one lot and
GOLDEN HAVEN MEMORIAL PARK, INC. Petitioner,  Filinvest wanted to acquire interest in some other lots under the same
vs. On January 14, 1991 GHM filed against the sellers and Filinvest a title, the notice served as warning to it that one of the owners was
FILINVEST DEVELOPMENT CORPORATION, Respondent. complaint for the annulment of the deeds of sale issued in the latter’s engaged in double selling.
favor before the Regional Trial Court (RTC) of Las Piñas City in Civil Case
DECISION 91-098. On March 16, 2006 the RTC rendered a decision after trial, What is more, upon inquiry with the Register of Deeds of Las
declaring the contracts to sell executed by some of the heirs in GHM’s Piñas, Filinvest also learned that the heirs of Andres Aldana sold Lot 8 to
ABAD, J.: favor valid and enforceable and the sale in favor of Filinvest null and HDC and turned over the co-owner’s duplicate copy of TCT 67462 RT-1 to
void. Only Filinvest appealed among the defendants. that company which had since then kept the title. Filinvest (referred to
These cases are about which of two real estate developers, both
below as FDC) admits this fact in its petition,7 thus:
buyers of the same lands, acted in good faith and has a better title to the On November 25, 2008 the Court of Appeals (CA) affirmed the
same. RTC decision with respect to the validity of the contract to sell Lot 6 in Sometime in August 1989, FDC applied with the Register of Deeds
GHM’s favor. But the CA declared the contracts to sell Lots 1, 2, and 12 in of Las Piñas for the transfer and registration of Lots 2, 4, and 5 in its
The Facts and the Case
GHM’s favor void and the sale of the same lots in favor of Filinvest valid. name and surrendered the co-owners duplicate copy of TCT No. (67462)
Petronila Yap (Yap), Victoriano and Policarpio Vivar (the Vivars), RT-1 given to it by the Vivar family, but the Register of Deeds of Las Piñas
Both parties filed their petitions for review before this Court, City refused to do the transfer of title in the name of FDC and instead
Benjamin Cruz (Cruz), Juan Aquino (Aquino), Gideon Corpuz (Corpuz),
Filinvest in G.R. 187824, and GHM in G.R. 188265. demanded from FDC to surrender as well the other co-owner's duplicate
and Francisco Sobremesana (Sobremesana), and some other relatives
inherited a parcel of land in Las Piñas City covered by Transfer Certificate copy of TCT No. (67462) RT-1 which was issued to the heirs of Andres
The Issue Presented Aldana. Upon further inquiry, FDC came to know that the heirs of Andres
of Title (TCT) 67462 RT-1. Subsequently, the heirs had the land divided
into 13 lots and, in a judicial partition, the court distributed four of the Aldana sold Lot 8 and delivered their co-owner's duplicate copy of TCT
The issue presented in these cases is whether or not the
lots as follows: a) Lots 1 and 12 to Aquino; b) Lot 2 to Corpuz and No. (67462) RT-1 to Household Development Corporation, a sister
contracts to sell that the sellers executed in GHM’s favor covering the
Sobremesana; and (c) Lot 6 to Yap, Cruz, and the Vivars. The other lots company of respondent GHMPI. FDC made representations to Household
same lots sold to Filinvest are valid and enforceable.
were distributed to the other heirs. Development Corporation for the surrender of said co-owner's duplicate
The Court’s Ruling copy of TCT No. (67462) RT-1 to the Register of Deeds of Las Piñas City,
On March 6, 1989 Yap, acting for herself and for Cruz and the but Household Development Corporation refused to do so.
Vivars, executed an agreement to sell Lot 6 in favor of Golden Haven To prove good faith, the rule is that the buyer of registered land
Memorial Park, Inc. (GHM), payable in three installments. On July 31, needs only show that he relied on the title that covers the property. But Filinvest’s knowledge that GHM, a competitor, had bought Lot 6
1989 another heir, Aquino, acting for himself and for Corpuz and this is true only when, at the time of the sale, the buyer was unaware of in which Filinvest was interested, that GHM had annotated an adverse
Sobremesana, also executed an agreement to sell Lots 1, 2, and 12 in any adverse claim to the property. 1 Otherwise, the law requires the claim to that Lot 6, and that GHM had physical possession of the title,
favor of GHM, payable in the same manner. In both instances, GHM paid buyer to exercise a higher degree of diligence before proceeding with his should have put Filinvest on its toes regarding the prospects it faced if it
the first installment upon execution of the contract. purchase. He must examine not only the certificate of title, but also the bought the other lots covered by the title in question. Filinvest should
seller’s right and capacity to transfer any interest in the property. 2 In have investigated the true status of Lots 1, 2, 6, and 12 by asking GHM
On August 4, 1989 GHM caused to be annotated a Notice of such a situation, the buyer must show that he exercised reasonable the size and shape of its interest in the lands covered by the same title,
Adverse Claim on TCT 67462 RT-1. On September 20, 1989 the sellers of precaution by inquiring beyond the four corners of the title. 3 Failing in especially since both companies were engaged in the business of
the four lots wrote GHM that they were still working on the titling of the these, he may be deemed a buyer in bad faith.4 developing lands. One who has knowledge of facts which should have
lots in their names and wanted to know if GHM was still interested in put him upon such inquiry and investigation cannot claim that he has
proceeding with their agreements. GHM replied in the affirmative on Here, Filinvest was on notice that GHM had caused to be acquired title to the property in good faith as against the true owner of
September 21, 1989 and said that it was just waiting for the sellers’ titles annotated on TCT 67462 RT-1, the mother title, as early as August 4, the land or of an interest in it.8
so it can pay the second installments. 1989 a notice of adverse claim covering Lot 6. This notwithstanding,
Filinvest still proceeded to buy Lots 1, 2, 6, and 12 on September 10, The Court upholds the validity of the contracts between GHM and
Sometime in August of 1989, Filinvest Development Corporation November 18, and December 29, 1989. its sellers. As the trial court aptly observed, GHM entered into valid
(Filinvest) applied for the transfer in its name of the titles over Lots 2, 4, contracts with its sellers but the latter simply and knowingly refused
and 5 but the Las Piñas Register of Deeds declined its application. Upon Filinvest of course contends that, although the title carried a without just cause to honor their obligations. The sellers apparently had
inquiry, Filinvest learned that Lot 8, a lot belonging to some other heir or notice of adverse claim, that notice was only with respect to seller Yap’s a sudden change of heart when they found out that Filinvest was willing
heirs and covered by the same mother title, had been sold to Household interest in Lot 6 and it did not affect Lots 1, 2, 12, and the remaining to pay more.
Development Corporation (HDC), a sister company of GHM, and HDC interests in Lot 6. The Court disagrees.
held the owner’s duplicate copy of that title. Filinvest immediately filed As to the award of exemplary damages, the Court sustains the CA
against HDC a petition for the surrender and cancellation of the co- The annotation of an adverse claim is intended to protect the ruling. This species of damages is allowed only in addition to moral
owners’ duplicate copy of TCT 67462 RT-1. Filinvest alleged that it bought claimant’s interest in the property.1avvphi1 The notice is a warning to damages such that exemplary damages cannot be awarded unless the
Lots 1, 2, 6, and 12 of the property from their respective owners as third parties dealing with the property that someone claims an interest in claimant first establishes a clear right to moral damages. 9 Here, since
evidenced by three deeds of absolute sale in its favor dated September it or asserts a better right than the registered owner. 5 Such notice GHM failed to prove that it is entitled to moral damages, the RTC’s award
of exemplary damages had no basis. But the grant of attorney’s fees is
proper. As the RTC noted, this case has been pending since 1991, or for
19 years now. GHM was forced to litigate and incur expenses in order to
protect its rights and interests.

WHEREFORE, the Court GRANTS the petition in G.R. 188265 and

DISMISSES the petition in G.R. 187824. The Court likewise REVERSES and
SETS ASIDE the decision of the Court of Appeals dated November 25,
2008 in CA-G.R. CV 89448, and REINSTATES the decision of the Regional
Trial Court in Civil Case 91-098 dated March 16, 2006 with the
MODIFICATION that the award of exemplary damages is DELETED.

SO ORDERED.