G.R. Nos.

L-13389-90

September 30, 1960

CAPITOL SUBDIVISION, INC., and MONTELIBANO SUBDIVISIONS, movants-appellees, vs. ALFREDO LOPEZ MONTELIBANO and CONCEPCION MONTELIBANO HOJILLA, oppositors-appellants. These are appeals from two orders entered by the Court of First Instance of Occidental Negros, acting as land registration court, in Cadastral Case No. 9, LRC (GLRO) Rec. No. 86. G.R. No. L-13389 On 10 April 1957, the Capitol Subdivision, Inc. and Montelibano Subdivisions filed a motion in the above mentioned court and cadastral case alleging that Lot No. 21 of subdivision plan No. Psd-12392, a part of Lot No. 77 of the Silay Cadastre, registered in the names of Alfredo Montelibano and Alejandro M. Montelibano, share and share alike, covered by TCT No. T-5979, was sold to Corazon J. Lacson of Silay, Occidental Negros, payable by installment; that prior to the sale, sometime in August 1947, the vendors mortgaged the said parcel of land together with other properties of the petitioners to the Philippine National Bank, Bacolod Branch, to secure the payment of an obligation, which mortgaged was duly noted at the back of TCT No. T-5979 under entry No. 4999; that on 24 September 1954 the vendee paid in full the agreed price of the parcel of land and on the same date the vendors executed the deed of sale in her favor; that on 29 January 1957 the mortgagee executed a deed of release of real estate mortgage on the parcel of land in question; that on 12 March 1957 Alfredo L. Montelibano and Concepcion Montelibano Hojilla brought an action against Alfredo Montelibano in the Court of First Instance of Occidental Negros (civil case No. 4272) and, pursuant to the provisions of section 79, Act No. 496, as amended, and section 24, Rule 7, of the Rule of Court, caused a notice of lis pendens to be annotated in the title to all the realities of the defendant in the province of Occidental of Negros, including that sold to Corazon J. Lacson; and that the vendee was an innocent purchaser. They prayed that the Register of Deeds of the province of Occidental Negros be directed to cancel the notice of lis pendens annotated on the back of TCT No. T-5979, insofar as it affects Lot No. 21, and issue the

corresponding transfer certificate of title in favor of Corazon J. Lacson free from the annotation of the notice of lis pendens. On 10 May 1957 the Court, presided over by Hon. Jose F. Fernandez, entered an order dated 27 April 1957 granting the petitioners' motion. On 22 may 1957 the oppositors Alfredo L. Montelibano and Concepcion Montelibano Hojilla filed a motion for reconsideration. On 3 June 1957 the petitioners filed an objection thereto. On 11 November 1957 the Court denied their motion. Hence this appeal interposed by the oppositors. G.R. No. L-13390 On 6 May 1957 the same petitioners filed a motion in the same court and cadastral case alleging that Lot No. 28 of the same subdivision plan, registered also in the names of Alfredo Montelibano and Alejandro M. Montelibano, share and share alike, covered by TCT No. T-5986, was sold to Marcelino Lalantakan of Silay, Occidental Negros, payable by installment; that on 29 of June 1936 the vendee paid in full the agreed price of the parcel of land and on the same date the vendors executed the deed of sale in his favor; that the parcel of land together with other realities of the petitioners was among those mortgaged by the vendors to the Philippines National Bank to secure the payment of a loan of P81,900; that on 17 January 1957 the mortgagee executed a deed of release of real estate mortgage on the parcel of land in question; that on 12 March 1957 Alfredo L. Montelibano and Concepcion Montelibano Hojilla brought an action against Alfredo Montelibano in the Court of First Instance of Occidental Negros (civil case No. 4274), and cause a similar notice of lis pendens mentioned in the first case to be annotated in the title to all the realities of the defendant in the province of Occidental Negros, including that sold to Marcelino Lalantakan; and that the vendee was an innocent purchaser. The petitioners prayed the same relief as that asked in the first case. On 24 May 1957 the same oppositors filed an objection to the motion to cancel the notice of lis pendens. On 30 May 1957 the petitioners filed an answer thereto. On 14 November 1957 the Court, presided over by Hon. Jose S. de la Cruz, entered an order granting the petitioners' motion. Hence this appeal interposed by the oppositors. In the first case, the deed of sale in favor of Corazon J. Lacson, executed by the vendors on 24 September 1954, was registered in the office of the Register of Deeds on 9 May 1957 (entry No. 48590), after the notice of lis

pendens had been noted on back of the title to the property on 12 March 1957. In the second case, the deed of sale in favor of Marcelino Lalantakan executed by the vendors on 29 June 1936 was not registered at all. The parcels of land in question covered by transfer certificates of title Nos. 5979 and 5986 were registered in the name of Alfredo Montelibano and Alejandro Montelibano and Alejandro M. Montelibano, share and share alike. In the brief filed jointly in these two cases, counsel for the appellants quoted the prayer of their complaint in civil case No. 4274, as follows: a) Declaring null and void the Project of Partition, Annex "B", and the order approving the same, Annex "C", hereof, and, ordering a new partition among the plaintiffs Concepcion Montelibano and Alfredo L. Montelibano, and the properties left by the deceased spouses Alejandro M. Montelibano, on the basis of each, of the properties left by the deceased spouses Alejandro Montelibano and Gliceria Montelibano, as listed and specified on pages 1 to 3 of the Project of Partition, Annex "B" hereof, minus the share already given to Alejandro M. Montelibano; b) In the alternative, for the plaintiff Concepcion Montelibano, ordering the defendant to transfer to her (Concepcion Montelibano) in full ownership of one-fourth of the urban lots which he received as his share under the Project of Partition, Annex "B" hereof; c) In the alternative, also, ordering the herein defendant to transfer in full ownership one-half of all the properties which he received under the Project of Partition, Annex "B" hereof, and specified on pages 3 to 6 thereof, to the plaintiff Alfredo L. Montelibano;. d) Sentencing the defendant to pay the plaintiffs Concepcion Montelibano and Matias Hojilla damages in the sum of not less than P100,000.00, and the plaintiff Alfredo L. Montelibano damages in the sum of not less than P200,000.00, both with the legal rate of interest from the time of the filing of this complaint until full payment; and

e) Sentencing the defendant to pay the plaintiffs as attorney's fees, the sum of P50,000.00 (Pp. 2-3, appellants' brief.)1awphl.nt Although an unrecorded sale of a parcel of land registered under the Torrens System is binding upon the parties, yet "The act of registration shall be the operative act to convey and affect the land . . . ." 1 Such being the law any acquired right in a registered land is effective as between and binding upon the parties and their privies but not as to third parties. The sale made of the two lots by the registered owners to Corazon J. Lacson and Marcelino Lalantakan, respectively, not having been registered, such sales do not affect third parties. The lots continue or remain the property of the registered owners. And when the latter are sued by a party concerning or involving or affecting the lots thus sold by the registered owners and the suing party causes a notice of lis pendens to be noted on the back of the certificates of title to the lots sold, such notice cannot be cancelled upon motion of the vendors or vendees predicated upon the fact that the vendees had acquired the lots prior to the noting of the notice of lis pendens. If judgment is rendered in favor of the plaintiffs in the action brought against the registered owners, the unrecorded right acquired by the vendees in the lots sold to them is subject or subordinate to the right of the plaintiffs in whose favor judgment is rendered. If judgment is rendered against the plaintiffs in the action, the notice of lis pendens noted on the certificate of title to the lots loses its efficacy or is ipso facto cancelled. The orders appealed from are reversed, with costs against the petitioners and appellees.

G.R. No. L-27594 February 27, 1976 THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY, and the ARMED FORCES OF THE PHILIPPINES,petitioners, vs. HON. SALVADOR C. REYES, as Judge of the Court of First Instance of Nueva Ecija, Branch III, PARANAQUE INVESTMENT & DEVELOPMENT CORPORATION, ROMAN C . TAMAYO, THE COMMISSIONER OF THE LAND REGISTRATION COMMISSION and the REGISTER OF DEEDS OF NUEVA ECIJA, respondents. G.R. No. L-28144 February 27, 1976 ALIPIO ALINSUNURIN, now substituted by PARAAQUE INVESTMENT & DEVELOPMENT CORPORATION,applicant-appellee, vs. THE DIRECTOR OF LANDS, THE DIRECTOR OF FORESTRY and the ARMED FORCES OF THE PHILIPPINES,oppositors-appellants. The infirmity of the grounds asserted by respondent-appellee, Paranaque Investment and Development Corporation, in its Second Motion for Reconsideration would have been easily discernible from a careful reading of the judgment of this Court. For the guidance of the members of the bar and the information of the parties, it may, however, be useful to explain further why the judgment, insofar as respondent Tamayo is concerned, has not become final during the pendency of the appeal, and therefore, the decree was issued arbitrarily and the Torrens Certificate of Title based thereon a nullity. It seems obvious that the interest of respondents Alipio Alinsunurin (now succeeded by Paranaque Investment and Development Corporation) and Roman C. Tamayo over the land are so interwoven and dependent upon each other, that if the judgment were affirmed on appeal it would have benefited respondent Tamayo regardless of whether said respondent has joined the appeal or not. Both respondents based their claim of title as heirs of the deceased Maria Padilla, on the informacion posesoria of Maria's father, Melecio Padilla, and the alleged continuous, peaceful and adverse possession over the land under concept of ownership since time immemorial of their aforementioned

predecessors-in-interest. Thus, in his answer in LRC N-675, respondent Tamayo did not assert a claim adverse to that of the appellant Alinsunurin, but on the contrary, alleged that he and the afore-mentioned appellant Alinsunurin and his wife, "have all been in actual, continuous, public and peaceful possession as co-owners of the land subject herein since time immemorial, by themselves or through their predecessors-in interest, namely, Maria Padilla and before her, her late father Melecio Padilla, who obtained same from the Spanish government under possessory information title granted on February 5, 1895 ..." and prayed that the title be registered in favor of the testate estate of Maria Padilla", or in the alternative, "in favor of appellant Alipio Alinsunurin, together with respondent Roman C. Tamayo, with the first two to have 2/3 interest and the last 1/3 interest". This communality of interest was further shown during the hearing, when the counsel for respondent Tamayo did not present any evidence of his own but merely joined Paranaque Investment and Development Corporation, successor of Alinsunurin, in the presentation of its evidence. It is not disputed that the evidence in support of the claim of title of respondent Paranaque Investment and Development Corporation is the same as that and inseparable from that of respondent Roman C Tamayo, and if such evidence of the former is considered untenable, it is inconceivable how the latter respondent's claim of title could stand by itself. It must be remembered that the appeal of the petitioners is from the entire judgment in LRC N-675 and not merely from separate and distinct portions thereof. Consequently, the reversal of the judgment insofar V, Paranaque Investment and Development Corporation's alleged ownership of 2/3 of the property pro indiviso is concerned would necessarily result in the reversal of the judgment with regard to respondent Roman C. Tamayo's alleged title to 1/3 pro indiviso of the land. For whether or not an appeal by one or several parties in the case will affect the liability of those who did not appeal must depend upon the facts of each particular case. Ordinarily, a reversal of a judgment is binding only on the parties in the suit but does not control the interest of the parties who did not join or were not made parties to the appeal; but where the rights and liabilities of those who did not appeal and those of the parties appealing are so interwoven and dependent on each other as to be inseparable, a reversal of the judgment as to one would operate as a reversal as to all. Moreover, no substantial right of respondent Tamayo appears to have impaired by the non-service of the notice of appeal to said party. It must be noted that respondent Tamayo's formal entry as "oppositor"" in LRC N-675 was apparently done without the knowledge of petitioners. The copy of the motion of said respondent to lift partially the Order of General Default and the copy of

the order of the respondent court granting said motion were not served upon petitioners. Petitioners, however, upon their discovery of the existence of Roman C. Tamayo's pleading in the record's of LRC N-675 on January 3, 1967, immediately furnished a copy of their second motion for extension of time to file the record on appeal, as well as the copies of the original and amended record on appeal, to said respondent. There is no question that the record on appeal and the amended record on appeal were filed within the period granted by the court. We have held that filing of the record on appeal on time necessarily implies the filing of a notice on appeal and is equivalent thereto, the reason being that the filing of a record on appeal is more expressive of the intention to appeal than the filing of notice to do so. Besides, there being no showing that it had adversely affected any substantial right of said respondent, petitioners' failure to serve respondent Tamayo a copy of the notice of appeal within thirty (30) days after notice of judgment cannot considered enough ground to dismiss the appeal with respect to said respondent, or to consider the judgment final as to said party. As to the claim of respondent Paranaque and Development Corporation that Honofre Andrada, et al. were denied their day in court, it should be noted that such claim is not asserted by the party directly involved. In any case, it may be recalled that the notice of lis pendens was entered on the Day Book (Primary Entry Book) of the Register of Deeds of Nueva Ecija on April 12, 1967. On June 5, 1967, this Court issued a restraining order enjoining (a) the respondent judge from issuing a writ of possession in LRC No. N-675, LRC Rec. No. N-25545, of the court of First Instance of Nueva Ecija; (b) the respondents Paranaque Investment and Development Corporation and Roman C. Tamayo, all their agents or representatives, from taking possession and/or exercising acts of ownership, occupancy or possession over the property in question subject matter of LRC No. N-675; and (c) restraining the Register of Deeds from accepting for registration documents referring to the subject land until petitioners shall have filed a notice of lis pendens as to the title certificates of Roman C. Tamayo and Paranaque Investment and Development Corporation. Accordingly, petitioners filed with the Register of Deeds of Nueva Ecija, a notice of lis pendens which is duly entered and annotated on June 23, 1967 in the memorandum of encumbrances on Original Certificate of Title No. 0-3151 under Entry No. 12032/0-3151, as follows:

Entry 12032/0-3151; Lis Pendens the property described in this title is the object of a pending petition for certiorari and mandamus with Preliminary Injunction filed by the Dir. of Lands, the Dir. of Forestry and AFP, with the Supreme Court involving the nullity of the Order of the Court dated March 11, 1967. Date of Inst. June 23, 1967. Date of Inscript. June 23,1967 at 11:16 a.m. (Sgd.) GAUDENCIO L. ATENDIDO Register of Deeds It is, therefore, manifest from the foregoing that the order of Judge Florencio Aquino in Civil Case No. 4696 on September 23, 1968 for the issuance of "clean transfer certificate of title to Honofre Andrada, et al." was made subsequent to and entry. It is well-settled that "in involuntary registration such as an attachment, levy on execution and lis pendens entry thereof on the Day Book is a sufficient notice to all persons of such adverse claim. It is not necessary that the notice of lis pendens be annotated on the back of the corresponding original certificate of title. The notice should, of course, be annotated on the back of the corresponding original certificate of title, but this is an official duty of the Register of Deeds, which may be presumed to have been regularly performed." Being transferees pendente lite, said parties are bound by the judgment against the transferor. ACCORDINGLY, the Second Motion for Reconsideration is denied.

G.R. No. L-45252 January 31, 1985 TIMOTEO LAROZA and CONCHITA URI, plaintiffs-appellants, vs. DONALDO GUIA, defendant-appellee. Action to quiet title filed by appellants Timoteo Laroza and Conchita Uri in the then Court of First Instance of Laguna and San Pablo City versus appellee Donaldo Guia over a parcel of land described as follows: Isang (1) lagay na lupang tirikan at niyugan na natatayo sa Nayon ng San Francisco, Lunsod ng San Pablo; may luwang na 200 metrong parisukat humigit kumulang ang tirikan at 2210 na metrong parisukat, humigit kumulang ang niyugan. May tanim na 46 puno ng niyog at 29 puno ng lanzones na pawang nabunga. Ang kabalantay sa SERemedios Bautista; sa SW Provincial Road; sa SW at SE-Maria Umali at sa NW Buenaventura Guia Ito ay hinahalagahan ng Pamahalaan ng P730.00 para sa taong kasalukuyan at ito ay mayroong Katibayan sa pagmamay-ari Blg. 31068. Ang mga hangganan nito ay may palatandaang buhay na madre-cacao. (pp. 4-5, Record on Appeal) Appellants, in their complaint, alleged that they bought the above-described property in good faith and for valuable considerations from Francisco Guia on June 30, 1973, after they had seen the documents of ownership of said Francisco Guia which consisted of the following: (a) Deed of Extra-Judicial Partition executed before Notary Public Alfonso Farcon of San Pablo City dated August 5, 1961. Copy of which is hereto attached as Annex "B;" (b) Deed of Absolute Sale executed by Manuel Guia in favor of Francisco Guia, Buenaventura Guia and Felimon Guia, dated March 5, 1940 executed before Notary Public Enrique Estrellado of San Pablo City, and duly registered with the Register of Deeds of Sta. Cruz, Laguna on March 8, 1940, copy of which is hereto attached as Annex "C;" (c) Deed of Donation Inter Vivos executed by Cayetana Garcia dated March 5, 1940 executed before Notary Public Enrique Estrellado of

San Pablo City, copy of which is hereto attached as Annex "D" (P. 6, Record on Appeal); that they were in continuous possession of the said property from the time they acquired the same from Francisco Guia until appellee, "through the commissioners appointed by this Honorable Court in Civil Case No. SP-488, namely: Aproniano Mls. Magsino, Clerk of Court; Rogaciano Borja, Deputy Clerk of Court; Atty. Ricardo Fabros, then represented by Mr. Armadilla; and, Engr. Danilo Dichoso, the surveyor, intruded upon the said peaceful possession by attempting to survey the abovedescribed property and to partition the same by virtue of a decision of this Honorable Court dated December 29, 1966 in Civil Case No. SP-488; that the attempt of herein defendant to survey and partition the above-described property beclouds the title of herein plaintiffs for which reason, they were constrained to institute the present action with the assistance of counsel at the agreed amount of P5,000.00 and were compelled to incur litigation expenses of not less than P500.00." (p. 7, Record on Appeal) Appellee, through counsel, filed a motion to dismiss the complaint alleging, among others, "that the land subject matter of the complaint has already been the subject of a final and executory judgment in Civil Case No. SP-488, hence, plaintiffs (appellants) have no cause of action, or if there be any, the same is barred by a prior judgment." (p. 39, Record on Appeal) Appellants opposed the motion to dismiss maintaining that the complaint states a sufficient cause of action and prayed that the motion to dismiss be denied. The lower court, on October 30, 1974, issued an order dismissing appellants' complaint saying that: The motion to dismiss is well taken. It is beyond debate or question that the land over which plaintiffs seek herein to quiet title has already been declared the property of defendant by the final and executory judgment of this Court in SP-488, which was affirmed by the Court of Appeals and a further attempt to challenge the adjudication by certiorari was thrown out perfunctorily by the Supreme Court. There is no room for doubt or for controversy that all the requisite elements of res judicata or bar by prior judgment are present here. Plaintiffs are the supposed purchasers of the property from Francisco Guia, defendant in SP-488. Needless to say, a judgment against a party binds his successors in interest. A sale or similar transmission of right does not disturb the Identity of party

for purposes of res judicata. In this regard, for further enlightenment on the issues generated by this dismissal motion, the Court hereby refers to its order of March 22, 1971 in SP-488. Contrary to plaintiffs contention, the ground of res judicata raised by defendant is indubitable and patent from paragraphs 4 and 5 of the complaint. (pp. 77-78, Record on Appeal) Appellants went to the then Court of Appeals alleging that the lower court erred (1) in holding that the instant case is already barred by a previous judgment; (2) in dismissing the complaint without a hearing which although preliminary should be conducted as ordinary hearings; and, (3) in holding that the ground of res judicata raised by appellee is indubitable and patent from paragraphs 4 and 5 of the complaint. (pp. 1-2, Brief for the Appellants) The appellate court forwarded the records of the case to Us because "no factual issue is involved" and "the issues raised in the instant case are purely legal questions which are beyond the jurisdiction of the Court to determine." (p. 5, CA Resolution) There is no merit in this appeal. Records show that long before appellants had acquired subject property, a notice of lis pendens (Civil Case No. SP 488) had already been registered with the Office of the Register of Deeds of San Pablo City affecting the property. Lis pendens is a notice of pending litigation; a warning to the whole world that one who buys the property so annotated does so at his own risk (Rehabilitation Finance Corporation vs. Morales, 101 Phil. 175). Notwithstanding, appellants bought the land from Francisco Guia, defendant in Civil Case No. SP 488. Having purchased the property with notice of lis pendens, appellants took the risk of losing it in case the decision in the said civil case, as what actually happened, is adverse to their predecessor-in-interest, Francisco Guia Time and again, We have decreed that the 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 acquired on the property is subject to the eventuality of the suit. The doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the power of the Court until the judgment or decree shall have been entered; otherwise, by successive alienation's pending the litigation, its judgment or decree shall be rendered abortive and impossible of execution. On this score alone, appellants case would necessarily fall.

In their first assigned error appellants argue that there is no res judicata because there is no Identity of causes of action since the case at bar is an action to quiet title, whereas, Civil Case No. SP-488 is one of filiation and partition. In National Bank vs. Barreto, 52 Phil. 818, We held that "a judgment for the plaintiff sweeps away every defense that should have been raised against the action, and this for the purpose of every subsequent suit, whether founded upon the same or a different cause." in Civil Case No. SP-488, appellee Donaldo Guia maintained that he is a co-owner of that parcel of land, including the land in question, which was later adjudicated to him as his share in the inheritance from the late Cayetana Garcia; whereas, Francisco Guia, appellants' predecessor-in interest, alleged that he is the sole owner of the property. Thus, both parties claim ownership over the same property appellee Donaldo Guia, by virtue of a final judgment rendered in Civil Case No. SP-488, and appellants Timoteo Laroza and Conchita Uri, by virtue of the sale executed by Francisco Guia, who lost in said civil case. In both cases, the question boils down to ownership of the land. Thus, there is Identity of causes of action. Anent the second assigned error, records reveal that a hearing on appellee's motion to dismiss appellants' complaint was conducted on August 12, 1974. There is, therefore, no basis for appellants to say that a hearing was never held in the case. Finally, appellants claim that the lower court erred in declaring that res judicata is indubitable and patent from the face of the complaint itself, without the appellee pleading the same as an affirmative defense. From a cursory reading of the pleadings, extant in the records of the case, We find that in his motion to dismiss, appellee had thoroughly discussed the issue of res judicata and, coupled by the fact that it was the same court which heard and decided Civil Case No. SP 488, the trial court can rightfully rule on said issue. ACCORDINGLY, for lack of merit, the appeal is hereby DISMISSED. SO ORDERED. Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

G.R. No. L-39433

March 9, 1934

3. The lower court also erred in not declaring said Exhibits B and C null and void with respect to the appellants. 4. The lower court again erred in denying the motion for new trial filed by plaintiffs-appellants. The following pertinent facts, which have been established at the trial by a preponderance of evidence, are necessary for the determination of the questions raised in this appeal, viz.: On November 26, 1928, the herein plaintiffs-appellants Clemente A. Lazaro and Maria Simon filed a complaint, docketed as civil case No. 5073 of the Court of First Instance of Nueva Ecija, against the herein defendant Feliciana Mariano (alias Feliciana Mariano Vda. de Sarangaya, and Feliciana Mariano Sarangaya), praying upon the facts alleged therein, that the contract of sale Exhibit A be declared rescinded and that an order be issued directing the cancellation of certificate of title No. 9303 of the registry of deeds of Nueva Ecija and the issuance of another in lieu thereof in the name of the said plaintiffs-appellants. On the said date of November 26, 1928, at 11:03 a. m., a notice of lis pendens was filed in the office of the register of deeds of Nueva Ecija, which notice was noted on the back of said certificate of title No. 9303. On July 2, 1929, the aforementioned civil case No. 5073 was called for hearing. Inasmuch as the plaintiffs failed to appear and their counsel was not ready for trial, the court, upon petition of the defendant's counsel, dismissed the case (Exhibit I-C). On July 27, 1929, the plaintiffs filed a motion for reinstatement (Exhibit I-E), which was denied in an order dated September 11, 1929 (Exhibit I-F). On July 30, 1929, the order of dismissal dated July 2, 1929, was noted on the back of said certificate of title No. 9303. On September 23, 1929, Feliciana Mariano, the defendant in the aforesaid civil case No. 5073, constituted two mortgages on the parcel of land described in the aforementioned certificate of title No. 9303, in favor of the herein

CLEMENTE A. LAZARO, ET AL., plaintiffs-appellants, vs. FELICIANA MARIANO, ET AL., defendants. CARMEN JULIANA GARRICHO and FRANCISO AGUADO, appellees. This is an appeal taken by the plaintiffs Clemente A. Lazaro and Maria Simon from the judgment rendered by the Court of First Instance of Nueva Ecija, with respect to the defendants Carmen Juliana Garricho and Francisco Aguado, the dispositive part of which reads as follows: The court is of the opinion that it should decide and it hereby decides this case by declaring null and void, the deed Exhibit A, executed by the defendant Feliciana Mariano de Sarangaya and cancelling the original certificate of title No. 9303, in the name of the said defendant. The register of deeds of Nueva Ecija is hereby ordered to issue a certificate of title in the name of the plaintiffs, noting thereon, however, the mortgage liens evidenced by the deeds Exhibits B and C in favor of the defendants Carmen Juliana Garricho and Francisco Aguado, who are hereby absolved from the complaint. The indemnity prayed for by the plaintiffs in their complaint is hereby denied, with costs against the defendant Feliciana Mariano de Sarangaya. So ordered. In support of their appeal, the appellants assign the following alleged errors as committed by the court a quo in its decision, to wit: 1. The lower court erred in not finding that the annotation on original certificate of title No. 9303 of the order dated July 2, 1929, dismissing civil case No. 5073 was illegal, null and void, and could not be considered a cancellation of the notice of lis pendens for the reason that it was made on July 30, 1929, before said order had become final. 2. The lower court likewise erred in not finding that the appellees acted in bad faith in executing the deeds of mortgage Exhibits B and C.

defendants-appellees Carmen Juliana Garricho and Francisco Aguado: the first mortgage for the sum of P10, 000 (Exhibit B) and the second for P6,500 (Exhibit C). The first question to be decided in this appeal, which is raised in the first assignment of error, is whether or not the notation of the order of dismissal of civil case No. 5073 on the back of the certificate of title No. 9303 is legal and valid and operated as a cancellation of the notation of the notice of lis pendens. As will be seen from the statement of facts above given, the dismissal of the complaint in civil case No. 5073 was due to the failure of the therein plaintiffs, who are also the plaintiffs in this case, to appear before the court when the said case was called for trial on the date set therefor, and to their counsel's statement made in open court that he was not ready to proceed with the case. Section 127, case 2, of the Code of Civil Procedure, provides that the court may dismiss an action when the plaintiff fails to appear at the time of trial, and the defendant appears and asks for the dismissal; in which case the said dismissal shall not be a bar to another action for the same cause (section 581, California Code of Civil Procedure). By provision of law, such dismissal does not therefore give to the subject matter so dismissed, the character of res judicata and consequently the order of dismissal does not finally determine the controversy and is not appealable, in accordance with the provisions of section 122 of the same Code. The order dismissing a case upon petition of the defendant by reason of the plaintiff's failure to appear, not being appealable, the provisions of the Code of Civil Procedure relative to the period for, and the steps to be followed in, the filing and perfection of an appeal are not applicable, and the plaintiff has no other remedy but to ask for the reinstatement of the case or to file another complaint upon the same cause. Upon failure to resort to either remedy, there will be no pending case before the court, which may be noted in the registry of deeds. The notation of the order of dismissal issued in civil case No. 5073, which eliminated it from the court's docket, operated as a cancellation of the notation of the pendency thereof (38 Corpus Juris, p. 40, sec. 65). At any rate, due to the delay in the filing of the new complaint, which was done on June 10, 1930, the dismissal having taken place on July 2, 1929, the herein plaintiffsappellants lost the benefit of the lis pendens (38 Corpus Juris, p. 40. sec. 66).

The other assignments of error, being mere corollaries of the first assignment, need not be passed upon, inasmuch as the questions involved therein have already been implicitly determined by the resolution of the legal question raised in the aforesaid first assignment of error. In view of the foregoing, this court is of the opinion and so holds: (1) That the order dismissing a civil case, upon petition of the defendant by reason of the plaintiff's failure to appear, is not final and does not constitute res judicata, and therefore, not appealable; and (2) that the dismissal of a civil case upon petition of the defendant by reason of the plaintiff's failure to appear, operates as a cancellation of the notation of lis pendens. Wherefore, not finding any error in the appealed judgment, it is hereby affirmed in toto, with costs against the appellants. So ordered.

G.R. No. L-58193 August 30, 1984 LEONORA A. PUNONGBAYAN, petitioner, vs. HON. GREGORIO G. PINEDA, as Presiding Judge of the Court of First Instance of Rizal, Branch XXI, ANGEL L. BAUTISTA and REGISTER OF DEEDS OF ILIGAN CITY, respondents. Petition for certiorari with preliminary mandatory injunction with prayer for a restraining order to annul and set aside the order of the respondent judge directing the cancellation of the adverse claim and notice of lis pendens annotated at the back of TCT No. 19417 of the Register of Deeds of Iligan City, registered in the name of Angel L. Bautista appearing thereon as Entry No. 434. The pertinent facts as gathered from the pleadings are as follows: Leonora Punongbayan and St. Peter's College, Inc. were the owners of two parcels of land described in TCT No. 296 and TCT No. 7546, respectively. They mortgaged the two properties to the Manila Banking Corporation (Manila Bank, for short) to guarantee a loan of P550,000.00. Subsequently, St. Peter's College, Inc. sold the property with TCT No. 7546 to Angel Bautista, the latter to assume the obligation of paying the outstanding balance of the mortgage to the Manila Bank. Angel Bautista, however, failed to pay the assumed obligation and as a result, the properties were extrajudicially foreclosed and sold at public auction to the Manila Bank as the highest bidder for the price of P131,467.58. Within the one year redemption period, Leonora Punongbayan, represented by Danilo Punongbayan redeemed the property with TCT No. 296 for the amount of P28,327.09 and a certificate of redemption was issued in her favor and the owner's duplicate copy of TCT No. 296 was likewise delivered to her by the Manila Bank. Within almost the same period, Angel Bautista paid the amount of P148,316.05 to the Manila Bank as payment of the redemption price of the two parcels of land. The Manila Bank issued a certificate of redemption in favor of Angel Bautista with respect to the land with TCT No. 10937 (formerly TCT No. 7546) only, alleging that the redemption referred to his property only as the other property with TCT No. 296 had been redeemed by Leonora Punongbayan. The Manila Bank likewise returned to Angel Bautista the amount of P28,327.09, which the latter refused

to accept and instead made several demands from the Manila Bank to issue a certificate of redemption in his favor with respect to the two parcels of land. The Manila Bank denied the request. Thus a complaint was filed by Angel Bautista against the Manila Bank (Civil Case No. 24992) for Specific Performance with Damages before the Court of First Instance of Rizal, Branch XXI. After trial, the trial court rendered a decision in favor of Angel L. Bautista. The Manila Bank appealed to the Court of Appeals. Pending appeal, Angel L. Bautista filed an ex-parte petition before the lower court for the issuance of a certificate of final conveyance (sale) over the two properties, which the trial court granted. By virtue of such certificate of final conveyance, TCT No. 296 was cancelled and a new TCT No. 19417 was issued in the name of Angel L. Bautista. Upon knowing this, Leonora Punongbayan caused the annotation of an adverse claim and notice of lis pendens (Entry No. 434) at the back of TCT No. 19417 and filed before the lower court a motion to set aside the order of the respondent judge directing the issuance of a certificate of final conveyance (sale), which the trial court denied. Angel L. Bautista thereafter filed an ex-parte manifestation and motion praying for the cancellation of Entry No. 434. The trial court issued an order granting the motion without giving Leonora Punongbayan a chance to be heard. Leonora Punongbayan then filed a motion to set aside such order, which the trial court denied. Thus, by virtue of such order, the Register of Deeds of Iligan City cancelled the adverse claim and notice of lis pendens. Hence, this petition for certiorari with preliminary mandatory injunction with prayer for a restraining order to annul and set aside the order of respondent judge with respect to the cancellation of the notice of lis pendens, to reannotate the notice of lis pendens on TCT No. 19417 and to restrain the private respondent from making a transfer of the land covered by TCT No. 19417. As prayed for, the Court issued a temporary restraining order. The issue for resolution is whether or not the notice of lis pendens annotated at the back of TCT No. T-19417, under Entry No. 434, was properly and legally ordered cancelled. The petitioner, Leonora Punongbayan claims that the cancellation was illegal since no notice was sent to her concerning the hearing of the motion for

cancellation of said annotation and was consequently denied the right to be heard. We find merit in the contention of the petitioner. The rule for the cancellation of a notice of lis pendens provides that there should be notice to the party who caused it to be recorded so that he may be given a chance to be heard and show to the court that the notice is not for the purpose of molesting the adverse party and that it is necessary to protect his right. The last paragraph of Section 24, Rule 14 of the Rules of Court provides that: The notice of lis pendens hereinabove mentioned may be cancelled only upon order of the court, after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded. In the case of Sarmiento vs. Ortiz, et al., the Court ruled: A trial court commits grave abuse of discretion in ordering the cancellation of a notice of lis pendens on a certificate of title where there was no unnecessary delay attributable to plaintiff and his counsel in the resolution of the main case for annulment of said certificate; especially when such cancellation was ordered without notice to plaintiff's counsel. And in the case of Natano vs. Esteban et al., the Court ruled For three reasons, the order directing the cancellation of the notice of lis pendens should be set aside: First, it was granted ex-parte. Plaintiffs were thus deprived of their right to be heard on notice. Second, the order dismissing the complaint had not yet become final. That order in effect had placed plaintiffs at a disadvantage. It opened the floodgate to the commission of a fraud. What if, after the cancellation of the notice of lis pendens in the office of the Register of Deeds, defendants should thereafter sell the land to a purchaser in

good faith and for value ? Third, There is no showing that the notice of lis pendens "is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded." In view of the foregoing, the respondent judge committed grave abuse of discretion in issuing the questioned order directing the cancellation of the notice of lis pendens without notice to the party who caused its annotation. WHEREFORE, the writ prayed for is hereby GRANTED and the questioned order directing cancellation of the notice of lis pendens is hereby ANNULLED and SET ASIDE. The Register of Deeds of Iligan City is hereby ordered to reannotate the notice of lis pendens on TCT No. 19417. The temporary restraining order issued by the court is hereby made permanent. With costs against the private respondent Angel L. Bautista. SO ORDERED.
(RULE57 of ROC) Section 1. Grounds upon which attachment may issue. At the commencement of the action or at any time before entry of judgment, a plaintiff or any proper party may have the property of the adverse party attached as security for the satisfaction of any judgment that may be recovered in the following cases: (a) In an action for the recovery of a specified amount of money or damages, other than moral and exemplary, on a cause of action arising from law, contract, quasi-contract, delict or quasi-delict against a party who is about to depart from the Philippines with intent to defraud his creditors; (b) In an action for money or property embezzled or fraudulently misapplied or converted to his own use by a public officer, or an officer of a corporation, or an attorney, factor, broker, agent, or clerk, in the course of his employment as such, or by any other person in a fiduciary capacity, or for a willful violation of duty; (c) In an action to recover the possession of property unjustly or fraudulently taken, detained or converted, when the property, or any part thereof, has been concealed, removed, or disposed of to prevent its being found or taken by the applicant or an authorized person; (d) In an action against a party who has been guilty of a fraud in contracting the debt or incurring the obligation upon which the action is brought, or in the performance thereof; (e) In an action against a party who has removed or disposed of his property, or is about to do so, with intent to defraud his creditors; or

(f) In an action against a party who does not reside and is not found in the Philippines, or on whom summons may be served by publication.

G.R. No. L-69303

July 23, 1987

HEIRS OF MARIA MARASIGAN, namely, Teofilo, Isabel, Maximina, Anicia, and Francisco, all surnamed Marasigan, petitioners, vs. THE INTERMEDIATE APPELLATE COURT and MARIA MARRON, respondents. Who has a better right to the property in question, the party who bought it with a notice of lis pendens annotated at the back of her title or the party in whose favor the notice of lis pendens was made? The appellate court answered this question in favor of the party who had the notice annotated and who won the litigation over the property. We affirm. The disputed property in this case is a residential lot (Lot No. 2-A) covered by Transfer Certificate of Title No. 100612 issued by the Register of Deeds of the City of Manila in the name of one Fe Springael-Bazar, married to Felicisimo Bazar. The pertinent facts as disclosed by the record are as follows: On April 24, 1975, Civil Case No. 97479 entitled "Maria Marron v. Felicisimo Bazar and Fe S. Bazaar" was filed before the then Court of First Instance of Manila, Branch XIII. The action sought to compel defendants Bazar to execute a registrable Deed of Absolute Sale of their lot covered by T.C.T. No. 100612 in favor of Maria Marron. On January 27, 1976, while Civil Case No. 97479 was still pending, the private respondent caused the annotation of a notice of lis pendens at the back of T.C.T. No. 100612. On February 24, 1976, judgment was rendered in Civil Case No. 97479. The dispositive portion reads: WHEREFORE, the Court hereby renders judgment in favor of the plaintiff and against the defendants as follows: a) Ordering the defendants Fe Springael Bazar and Felicisimo Bazar as vendors (1) to execute in favor of the plaintiff Maria Marron as vendee a Deed of Absolute Sale in a public instrument over the residential lot covered by Transfer Certificate of Title No. 100612 issued by the Registry of Deeds of the

City of Manila to and in the name of Fe S. Bazar, married to Felicisimo Bazaar; and (2) to deliver to plaintiff sufficient copies of such deed of sale, together with the Owner's copy of said Transfer Certificate of Title No. 100612, in order that the plaintiff can register the Deed of Absolute Sale with the Registry of Deeds of the City of Manila and secure a transfer certificate of title for the land in her name. b) Ordering the defendants to pay to the plaintiff the sum of P500.00 Philippine Currency, as and for attorney's fees; and c) Ordering the defendants to pay the costs of the suit. (Rollo, p. 15). The above judgment became final and executory so Maria Marron filed a motion for execution which was granted. A writ of execution was issued by the court on July 12, 1976. The spouses Bazar, however, refused to surrender their title to the property in question and to execute the required deed of sale in Marron's favor. On November 29, 1978, the lower court finally ordered the Clerk of Court to execute the deed of sale in behalf of the erring spouses. When the said deed was presented to the Register of Deeds of Manila for registration, the Deputy Clerk of Court was advised to secure a court order in order that the new title issued in the name of herein petitioner Maria Marasigan could be cancelled. It appears that on December 18, 1974, a deed of absolute sale of Lot 2-A covered by T.C.T. No. 100612 was executed by Fe S. Bazar in favor of Maria Marasigan for and in consideration of the sum of Fifteen Thousand Pesos (P15,000.00). However, it was only on July 5, 1977 that said deed was registered with the Registry of Deeds of Manila. Consequently, T.C.T. No. 100612 was cancelled and a new title was issued in Maria Marasigan's name. When the Register of Deeds of Manila issued Transfer Certificate of Title No. 126056 naming Maria Marasigan as the new owner of Lot 2-A, the notice of lis pendens caused to be annotated by Marron on the Bazar's title was carried over on the said new title. Meanwhile, on May 26, 1977, the Bazaars filed a petition for relief from the judgment dated February 24, 1976 in Civil Case No. 97479. While their petition was still pending, they moved to set aside the said judgment on June 22, 1979 on the ground of lack of jurisdiction over their persons. On the other hand, on February 24, 1979, Marron instituted L.R.C. Case No. 7680 captioned "Maria Marron v. Maria Marasigan" which prayed for a court order requiring the Register of Deeds of Manila to register the deed of sale executed by the Deputy Clerk of Court in behalf of the Bazaars pursuant to the order dated November 29, 1978

of the Court of First Instance, Manila, Branch XIII. L.R.C. Case No. 7680 was tried by the Court of First Instance of Manila, Branch IV acting as a land registration court. Said case was dismissed for the following reason: ... This court acting as a Land Registration Court, with limited and special jurisdiction cannot act on this petition under summary proceedings but (sic) should be ventilated before a court of general jurisdiction Branch XIII, which issued the aforesaid Order dated November 29, 1978, the said petition is hereby dismissed for lack of jurisdiction without prejudice on the part of the petitioner to institute the appropriate civil action before the proper court. ... (Annex "A," p. 4, Rollo, p. 138) On September 6, 1979, Marron filed another case docketed as Civil Case No. 126378 to have Marasigan's TCT 126056 cancelled conformably to the procedure outlined in the decision of the above land registration court. On July 30, 1980, the parties submitted said case for decision. On February 18, 1982, the Court of First Instance of Manila, Branch IV to which Civil Case No. 126378 was assigned dismissed Marron's complaint for being premature since the decision rendered by the CFI, Branch XIII in Civil Case No. 97479 had not yet become final and executory considering that it was still the subject of a petition for relief from judgment. On appeal, the Intermediate Appellate Court, on August 7, 1984, ruled that Marron is entitled to the property under litigation by virtue of the notice of lis pendens annotated at the back of Maria Marasigan's title. The appellate court further ruled that the decision in Civil Case No. 97479 had become final and executory because the petition for relief from judgment of the spouses Bazar was filed out of time. The dispositive portion of the appellate court's decision reads: WHEREFORE, the appealed decision is hereby REVERSED and another one entered (a) Ordering the Register of Deeds of Manila to cancel T.C.T. No. 126056 in the name of Maria Marasigan and issue another in the name of Maria Marron by virtue of the Deed of Sale executed by the Branch Clerk of Court of Branch XIII; (b) Ordering the said Register of Deeds, during the pendency of this case, to refrain from registering any deed of sale pertaining to T.C.T. No. 126056 in the name of Maria Marasigan other than that of the herein plaintiff; and

(c) Ordering the defendant Maria Marasigan to pay attorney's fees in the amount of P10,000.00. (IAC, Decision. Rollo, pp. 17-18). Maria Marasigan who died in the course of the proceedings is now represented by her heirs in the instant petition which assigns the following errors: I THAT THE INTERMEDIATE APPELLATE COURT FAILED TO APPREHEND THAT THE RIGHT OF ACTION OF RESPONDENT MARIA MARRON (AS PLAINTIFF) IN CIVIL CASE NO. 97479 HAD PRESCRIBED AND SHE INCURRED IN LACHES. II THAT THE INTERMEDIATE APPELLATE COURT FAILED TO APPREHEND THAT RESPONDENT ABANDONED OR WAIVED HER PROPERTY RIGHTS AND EFFECTS TO/OF THE DECISION IN CIVIL CASE NO. 97479, WHEN SHE FILED CIVIL CASES NO. 7680 AND 126378, DURING ITS EFFECTIVITY. III THAT THE INTERMEDIATE APPELLATE COURT ERRED IN CONCLUDING THAT THE DECISION IN CIVIL CASE NO. 97479 HAS BECOME FINAL AND EXECUTORY. IV THAT THE INTERMEDIATE APPELLATE COURT FAILED TO APPREHEND THE LACK OF JURISDICTION OF THE TRIAL COURT IN CIVIL CASES NO. 7680 AND 126378 OVER THE PERSONS OF PETITIONERS. V THAT THE INTERMEDIATE APPELLATE COURT ERRED IN CONSIDERING THAT THE TRIAL COURT IN CIVIL CASE NO. 97479 HAS JURISDICTION OVER THE PERSONS OF DEFENDANTS SPOUSES FELICISIMO BAZAAR AND FE S. BAZAAR. VI

THAT THE INTERMEDIATE APPELLATE COURT FAILED TO APPREHEND THAT THE DEED OF ABSOLUTE SALE EXECUTED BY THE DEPUTY CLERK OF COURT, WAS NOT LEGAL AND VALID AND WITHOUT PROOF AND EFFECT. (Brief for the appellant, pp. 1 and 2) We find no merit in the present petition. There is a clear showing that although the late Maria Marasigan acquired the property in question from the Bazaars pursuant to a deed of absolute sale on December 18, 1974 or a little over four months before the filing of Civil Case No. 97479, the transaction became effective as against third persons only on July 5, 1977 when it was registered with the Registry of Deeds of Manila. It is the act of registration which creates constructive notice to the whole world. Section 51 of Act 496, as amended by Section 52 of the Property Registration Decree (P.D. 1529) provides: Sec. 52. Constructive notice upon registration. Every conveyance ... 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. Moreover, there is no question that when the late Maria Marasigan was issued her transfer certificate of title to the subject property (T.C.T. No. 126056), the Registrar of Deeds of Manila then carried over to the new title the notice of lis pendens which the private respondent had caused to be annotated at the back of the Bazar's title. In case of subsequent sales or transfers, the Registrar of Deeds is duty bound to carry over the notice of lis pendens on all titles to be issued. Otherwise, if he cancels any notice of lis pendens in violation of his duty, he may be held civilly and even criminally liable for any prejudice caused to innocent third persons (The Director of Lands, et al. v. Reyes, 68 SCRA 177). A notice of lis pendens means that a certain property is involved in a litigation and serves as notice to the whole world that one who buys the same does it at his own risk (Rehabilitation Finance Corporation v. Morales, 101 Phil. 171). It was also a clear notice to Maria Marasigan that there was a court case affecting her rights to the property she had purchased. As earlier stated it was only on July 5, 1977 that the sale between Maria Marasigan and the Bazaars became effective as against third persons. The registration of the deed of sale over the subject property was definitely subsequent to the annotation made on

January 27, 1976. Consequently, Marasigan was bound by the outcome of the litigation against her vendors or transferors. (See Rivera v. Tirona, et al., 109 Phil. 505). We reiterate the established rule that: ... the 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. The doctrine of lis pendens is founded upon reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the power of the Court until the judgment or decree shall have been entered; otherwise, by successive alienations pending the litigation, its judgment or decree shall be rendered abortive and impossible of execution. ... (Laroza v. Guia, 134 SCRA 34 1) The late Marasigan's transferors did not interpose any appeal from the adverse judgment dated February 24, 1976 in Civil Case No. 97479. The 30-day period under the old rule (Rule 41, section 3 of the Revised Rules of court now amended by Batas Pambansa Bilang 129, section 39) within which the Bazaars may have taken an appeal started to run from May 12, 1976 when they were served with a copy of the said decision. On June 11, 1976, the February 24, 1976 decision in Civil Case No. 97479 became final and executory. At this point after the finality of the said decision, the Bazaars no longer had the right to alienate the property subject of the litigation. Any transaction effective during the period of litigation is subject to the risks implicit in the notice of lis pendens and to the eventual outcome of the litigation. Moreover, we agree with the finding of the appellate court that the petition for relief from judgment by the Bazaars dated May 26, 1977 was filed beyond the two periods provided in Section 3 Rule 38 of the Revised Rules of Court. There may have been some errors in the computations but the petition itself was out of time. Rule 38, Section 3 of said Rules provides, in part, that: Sec. 3. Time for filing petition. ... A petition provided for in either of the preceding sections of this rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment, order or other proceeding to be set aside, and not more than six (6) months after such judgment or order was entered or such proceeding was taken. ... The 60-day period must be reckoned from May 12, 1976 when the Bazaars were served with a copy of the assailed decision. Therefore, the 60-day period expired on July 11,

1976. It was only after 379 days or more than 12 months after they learned of the judgment that the Bazaars filed their petition for relief from said judgment. (See Domingo v. Dela Cruz, 23 SCRA 1121) The appellate court computed the 6-month period from the date of the judgment was rendered. Rule 38 states that the counting should commence from the entry of the judgment or order. (See Dirige v. Biranya, 17 SCRA 840). A judgment is entered only after its finality and Civil Case No. 97479 became final on June 11, 1976. Since the records do not bear the exact date the questioned judgment was entered, the 6-month period can be counted for purposes of our decision from July 12, 1976 when the writ of execution of the final judgment was issued. The phrase "or other proceeding" in Section 3 of Rule 38 includes a writ of execution (Aquino v. Blanco, 79 Phil. 647). The 6-month period from July 12, 1976 lapsed on January 8, 1977. A period of ten (10) months had already lapsed when the Bazaars filed their petition for relief from judgment on May 26, 1977. Obviously, the petitioners cannot now question the effects of the final and executory judgment in Civil Case No. 97479. In the words of Laroza v. Guia (supra) they cannot render the final judgment abortive and impossible of execution. The deed of sale executed by the Deputy Clerk of Court on behalf of the Bazar spouses pursuant to the court's judgment was valid and binding. The petitioners cannot also raise before us the issues of prescription or laches and lack of jurisdiction over the persons of the Bazar spouses in Civil Case No. 97479. This cannot be done in this petition which stems from Civil Case No. 126378 in the trial court and AC-G.R. No. 00183 in the appellate court. The Bazaars were the proper parties who ought to have raised them as defenses either in a motion to dismiss or in their answer. Since they did not do so, the same were deemed waived. (See Rule 9, section 2 of the Revised Rules of Court; MD Transit & Taxi Co., Inc. v. Estrella, 113 SCRA 378; Torreda v. Boncaros, 69 SCRA 247; Visayan Electric Co., Inc. v. Commissioner of Internal Revenue, 39 SCRA 43; Republic v. Mambulao Lumber Company, 6 SCRA 858). WHEREFORE, in view of all the foregoing, the petition is hereby DISMISSED for lack of merit. The appellate court's decision is AFFIRMED. SO ORDERED.
(RULE13 of ROC) Section 13. Proof of Service. Proof of personal service shall consist of a written admission of the party served, or the official return of the server, or the affidavit of the party serving, containing a full statement of the date, place and manner of service. If the service is by ordinary mail, proof thereof shall consist of an affidavit of the person mailing of facts showing compliance with section 7 of this Rule. If service is made by registered mail, proof shall be made by such affidavit and the registry receipt issued by the mailing office. The registry return card shall be filed immediately upon its receipt by the sender, or in lieu thereof the unclaimed letter together with the certified or sworn copy of the notice given by the postmaster to the addressee.

Section 76. Notice of lis pendens. No action to recover possession of real estate, or to quiet title thereto, or to remove clouds upon the title thereof, or for partition, or other proceedings of any kind in court directly affecting the title to land or the use or occupation thereof or the buildings thereon, and no judgment, and no proceeding to vacate or reverse any judgment, shall have any effect upon registered land as against persons other than the parties thereto, unless a memorandum or notice stating the institution of such action or proceeding and the court wherein the same is pending, as well as the date of the institution thereof, together with a reference to the number of the certificate of title, and an adequate description of the land affected and the registered owner thereof, shall have been filed and registered. Section 70. Adverse claim. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be canceled upon filing of a verified petition therefor by the party in interest: Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant. Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered canceled. If, in any case, the court, after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect. Section 71. Surrender of certificate in involuntary dealings. If an attachment or other lien in the nature of involuntary dealing in registered land is registered, and the duplicate certificate is not presented at the time of registration, the Register of Deeds shall, within thirty-six hours thereafter, send notice by mail to the registered owner, stating that such paper has been registered, and requesting him to send or produce his duplicate certificate so that a memorandum of the attachment or other lien may be made thereon. If the owner neglects or refuses to comply within a reasonable time, the Register of Deeds shall report the matter to the court, and it shall, after notice, enter an order to the owner, to produce his certificate at a time and place named therein, and may enforce the order by suitable process.

[G. R. No. 102377. July 5, 1996] ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT OF APPEALS, DOMINGO A. PILARES, SHERIFF ROBERTO GARCIA OF QUEZON CITY and REGISTER OF DEEDS OF MARIKINA, respondents. A word or group of words conveys intentions. When used truncatedly, its meaning disappears and breeds conflict. Thus, it is written - By thy words shalt thou be justified, and by thy words shalt thou be condemned. (Matthew, 12:37) Construing the new words of a statute separately is the raison detre of this appeal. Essentially, the case before us is for cancellation of the inscription of a Notice of Levy on Execution from a certificate of Title covering a parcel of real property. The inscription was caused to be made by the private respondent on Transfer Certificate of Title No. N-79073 of the Register of Deeds of Marikina, issued in the name of the spouses Ernesto B. Uychocde and Lucita Jarin, and was later carried over to and annotated on Transfer Certificate of Title No. N-109417 of the same registry, issued in the name of the spouses Alfredo Sajonas and Conchita R. Sajonas, who purchased the parcel of land from the Uychocdes, and are now the petitioners in this case. The facts are not disputed, and are hereby reproduced as follows: On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a parcel of residential land located in Antipolo, Rizal to the spouses Alfredo Sajonas and Conchita R. Sajonas on installment basis as evidenced by a Contract to Sell dated September 22, 1983. The property was registered in the names of the Uychocde spouses under TCT No. N-79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984, the Sajonas couple caused the annotation of an adverse claim based on the said Contract to Sell on the title of the subject property, which was inscribed as Entry No. 116017. Upon full payment of the purchase price, the Uychocdes executed a Deed of Sale involving the property in question in favor of the Sajonas couple on September 4, 1984. The deed of absolute sale was registered almost a year after, or on August 28, 1985. Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No. Q-28850 for collection of sum of money against Ernesto Uychocde. On June 25, 1980, a Compromise Agreement was entered into by the parties in the said case under which Ernesto Uychocde acknowledged his monetary obligation to Domingo Pilares amounting to P27,800 and agreed to pay the same in two years from June 25, 1980. When Uychocde failed to comply with his undertaking in the compromise agreement, defendant-appellant Pilares moved for the issuance of a writ of execution to enforce the

decision based on the compromise agreement, which the court granted in its order dated August 3, 1982. Accordingly, a writ of execution was issued on August 12, 1982 by the CFI of Quezon City where the civil case was pending. Pursuant to the order of execution dated August 3, 1982, a notice of levy on execution was issued on February 12, 1985. On February 12, 1985, defendant sheriff Roberto Garcia of Quezon City presented said notice of levy on execution before the Register of Deeds of Marikina and the same was annotated at the back of TCT No. 79073 as Entry No. 123283. 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, TCT No. N-109417 was ssued in the name of the Sajonas couple. The 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 Third Party Claim with the sheriff of Quezon City, hence the auction sale of the subject property did not push through as scheduled. On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of levy on execution upon defendant-appellant Pilares, through a letter to their lawyer, Atty. Melchor Flores. Despite said demand, defendant-appellant Pilares refused to cause the cancellation of said annotation. In view thereof, plaintiffs-appellees filed this complaint dated January 11, 1986 on February 5, 1986.[1] The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch 71, against Domingo Pilares, the judgment creditor of the Uychocdes. The relevant portion of the complaint alleges: 7. That at the time the notice of levy was annotated by the defendant, the Uychocde spouses, debtors of the defendant, have already transferred, conveyed and assigned all their title, rights and interests to the plaintiffs and there was no more title, rights or interests therein which the defendant could levy upon; 8. That the annotation of the levy on execution which was carried over to the title of said plaintiffs is illegal and invalid and was made in utter bad faith, in view of the existence of the Adverse Claim annotated by the plaintiffs on the corresponding title of the Uychocde spouses; 9. That a demand was made by the plaintiffs upon the defendant Domingo A. Pilares, to cause the cancellation of the said notice of levy but the latter, without justifiable reason and with the sole purpose of harassing and embarrassing the plaintiffs ignored and refused plaintiffs demand;

10. That in view of the neglect, failure and refusal of the defendant to cause the cancellation of the notice of levy on execution, the plaintiffs were compelled to litigate and engage the services of the undersigned counsel, to protect their rights and interests, for which they agreed to pay attorneys fees in the amount of P10,000 and appearance fees of P500 per day in court.[3] Pilares filed his answer with compulsory counterclaim[4] on March 8, 1986, raising special and affirmative defenses, the relevant portions of which are as follows: 10. Plaintiff has no cause of action against herein defendants; 11. Assuming, without however admitting that they filed an adverse claim against the property covered by TCT No. 79073 registered under the name of spouses Ernesto Uychocde on August 27, 1984, the same ceases to have any legal force and effect (30) days thereafter pursuant to Section 70 of P.D. 1529; 12. The Notice of Levy annotated at the back of TCT No. 79073 being effected pursuant to the Writ of Execution dated August 31, 1982, duly issued by the CFI (now RTC) of Quezon City proceeding from a decision rendered in Civil Case No. 28859 in favor of herein defendant against Ernesto Uychocde, is undoubtedly proper and appropriate because the property is registered in the name of the judgment debtor and is not among those exempted from execution; 13. Assuming without admitting that the property subject matter of this case was in fact sold by the registered owner in favor of the herein plaintiffs, the sale is the null and void (sic) and without any legal force and effect because it was done in fraud of a judgment creditor, the defendant Pilares.[5] Pilares likewise sought moral and exemplary damages in a counterclaim against the Sajonas spouses. The parties appeared at pre-trial proceedings on January 21, 1987, [6] after which, trial on the merits ensued. The trial court rendered its decision on February 15, 1989.[7] It found in favor of the Sajonas couple, and ordered the cancellation of the Notice of Levy from Transfer Certificate of Title No. N-109417. The court a quo stated, thus: After going over the evidence presented by the parties, the court finds that although the title of the subject matter of the Notice of Levy on Execution was still in the name of the Spouses Uychocde when the same 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 property from the Uychocdes. It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that actual notice of an adverse claim is equivalent to registration and the subsequent registration of the Notice of Levy could not have any legal effect in any respect on account of prior inscription of the adverse claim annotated on the title of the Uychocdes. xxx xxx xxx

On the issue of whether or not plaintiffs are buyers in good faith of the property of the spouses Uychocde even notwithstanding the claim of the 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 indication that said plaintiffs as purchasers had notice beforehand of the claim of the defendant over said property or that the same is involved in a litigation between said spouses and the defendant. Good faith is the opposite of fraud and bad faith, and the existence of any bad faith must be established by competent proof.[8] (Cai vs. Henson, 51 Phil 606) xxx xxx xxx

In view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the defendant Pilares, as follows: 1. Ordering the cancellation of the Notice of Levy on Execution annotated on Transfer Certificate of Title No. N-109417. 2. Ordering said defendant to pay the amount of P5,000 as attorneys fees. 3. Dismissing the Counterclaim interposed by said defendant. Said defendant is likewise ordered to pay the costs. Dissatisfied, Pilares appealed to the Court of Appeals[9], assigning errors on the part of the lower court. The appellate court reversed the lower courts decision, and upheld the annotation of the levy on execution on the certificate of title, thus: WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed and set aside and this complaint is dismissed.

Costs against the plaintiffs-appellees."[10] The Sajonas couple are now before us, on a Petition for Review on Certiorari[11], praying inter alia to set aside the Court of Appeals decision, and to reinstate that of the Regional Trial Court. Private respondent filed his Comment[12] on March 5, 1992, after which, the parties were ordered to file their respective Memoranda. Private respondent complied thereto on April 27, 1994[13], while petitioners were able to submit their Memorandum on September 29, 1992.[14] Petitioner assigns the following as errors of the appellate court, to wit: I THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY PERIOD FOR ADVERSE CLAIM UNDER SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION IN ITS ENTIRETY AND TO RECONCILE THE APPARENT INCONSISTENCY WITHIN THE PROVISION IN ORDER TO GIVE EFFECT TO IT AS A WHOLE. II THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529 IN SUCH WISE ON THE GROUND THAT IT VIOLATES PETITIONERS SUBSTANTIAL RIGHT TO DUE PROCESS. Primarily, we are being asked to ascertain who among the parties in suit has a better right over the property in question. The petitioners derive their claim from the right of ownership arising from a perfected contract of absolute sale between them and the registered owners of the property, such right being attested to by the notice of adverse claim[15]annotated on TCT No. N-79073 as early as August 27, 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, arising from Civil Case No. Q28850[16] against the Uychocdes, from whose title, petitioners derived their own. Concededly, annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property Registration Decree), and serves a warning to third parties dealing with said property that someone is claiming an interest on the same or a better right than that of the registered owner thereof. Such notice is registered by filing a

sworn statement with the Register of Deeds of the province where the property is located, setting forth the basis of the claimed right together with other dates pertinent thereto.[17] The registration of an adverse claim is expressly recognized under Section 70 of P.D. No. 1529.* Noting the changes made in the terminology of the provisions of the law, private respondent interpreted this to mean that a Notice of Adverse Claim remains effective only for a period of 30 days from its annotation, and does not automatically lose its force afterwards. Private respondent further maintains that the notice of adverse claim was annotated on August 27, 1984, hence, it will be effective only up to September 26, 1984, after which it will no longer have any binding force and effect pursuant to Section 70 of P.D. No. 1529. Thus, the sale in favor of the petitioners by the Uychocdes was made in order to defraud their creditor (Pilares), as the same was executed subsequent to their having defaulted in the payment of their obligation based on a compromise agreement.[18] The respondent appellate court upheld private respondents theory when it ruled: The above stated conclusion of the lower court is based on the premise that the adverse claim filed by plaintiffs-appellees is still effective despite 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 only for a period of 30 days from the date of its registration. The provision of this Decree is clear and specific. xxx xxx xxx

It should be noted that the adverse claim provision in Section 110 of the Land Registration Act (Act 496) does not provide for a period of effectivity of the annotation of an adverse claim. P.D. No. 1529, however, now specifically provides for only 30 days. If the intention of the law was for the adverse claim to remain effective until cancelled by petition of the interested party, then the aforecited provision in P.D. No. 1529 stating the period of effectivity would not have been inserted in the law. Since the adverse claim was annotated On August 27, 1984, it was effective only until September 26, 1984. Hence, when the defendant sheriff annotated the notice of levy on execution on February 12, 1985, said adverse claim was already ineffective. It cannot be said that actual or prior knowledge of the existence of the adverse claim on the Uychocdes title is equivalent to registration inasmuch as the adverse claim was already ineffective when the notice of levy on execution was annotated. Thus, the act of defendant sheriff in annotating the notice of levy on execution was proper and justified.

The appellate court relied on the rule of statutory construction that Section 70 is specific and unambiguous and hence, needs no interpretation nor construction. [19] Perforce, the appellate court stated, the provision was clear enough to warrant immediate enforcement, and no interpretation was needed to give it force and effect. A fortiori, an adverse claim shall be effective only for a period of thirty (30) days from the date of its registration, after which it shall be without force and effect. Continuing, the court further stated; . . . clearly, the issue now has been reduced to one of preference- which should be preferred between the notice of levy on execution and the deed of absolute sale. The Deed of Absolute Sale was executed on September 4, 1984, but was registered only on August 28, 1985, while the notice of levy on execution was annotated six (6) months prior to the registration of the sale on February 12, 1985. In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a sale is recorded later than an attachment, although the former is of an earlier date, the sale must give way to the attachment on the ground that the act of registration is the operative act to affect the land. A similar ruling was restated in Campillo vs. Court of Appeals (129 SCRA 513). xxx xxx xxx

required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or certificate of title.[20] Although we have relied on the foregoing rule, in many cases coming before us, the same, however, does not fit in the case at bar. While it is the act of registration which is the operative act which conveys or affects the land insofar as third persons are concerned, it is likewise true, that the subsequent sale of property covered by a Certificate of Title cannot prevail over an adverse claim, duly sworn to and annotated on the certificate of title previous to the sale. [21] While it is true that under the provisions of the Property Registration Decree, deeds of conveyance of property registered under the system, or any interest therein only take effect as a conveyance to bind the land upon its registration, and that a purchaser is not required to explore further than what the Torrens title, upon its face, indicates in quest for any hidden defect or inchoate right that may subsequently defeat his right thereto, nonetheless, this rule is not absolute. Thus, one who buys from the registered owner need not have to look behind the certificate of title, he is, nevertheless, bound by the liens and encumbrances annotated thereon. One who buys without checking the vendors title takes all the risks and losses consequent to such failure.[22] In PNB vs. Court of Appeals, we held that the subsequent sale of 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 October 6, 1958. That should have put said spouses on notice, and they can claim no better legal right over and above that of Perez. The TCT issued in the spouses names on July, 1959 also carried the said annotation of adverse claim. Consequently, they are not entitled to any interest on the price they paid for the property.[23] Then again, in Gardner vs. Court of Appeals, we said that the statement of respondent court in its resolution of reversal that until the validity of an adverse claim is determined judicially, it cannot be considered a flaw in the vendors title contradicts the very object of adverse claims. As stated earlier, the annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property, and serves as a notice and warning to third parties dealing with said property that someone is claiming an interest on the same or has a better right than the registered owner thereof. A subsequent sale cannot prevail over the adverse claim which was previously annotated in the certificate of title over the property.[24] The question may be posed, was the adverse claim inscribed in the Transfer Certificate of Title No. N-109417 still in force when private respondent caused the notice of levy on execution to be registered and annotated in the said title, considering that more than thirty days had already lapsed since it was annotated? This is a decisive factor in the resolution of this instant case.

The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise known as the Property Registration Decree, which provides as follows: Section 51. Conveyance and other dealings by the 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 in so far as third persons are concerned, and in all cases under the Decree, the registration shall be made in the office of the Register of Deeds for the province or city where the land lies. (Italics supplied by the lower court.) Under the Torrens system, registration is the operative act which gives validity to the transfer or creates a lien upon the land. A person dealing with registered land is not

If the adverse claim was still in effect, then respondents are charged with knowledge of pre-existing interest over the subject property, and thus, petitioners are entitled to the cancellation of the notice of levy attached to the certificate of title. For a definitive answer to this query, we refer to the law itself. Section 110 of Act 496 or the Land Registration Act reads: Sec. 110. Whoever claims any part or interest in registered lands adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Act for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, and a reference to the volume and page of the certificate of title of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse claimants residence, and designate a place at which all notices may be served upon him. The statement shall be entitled to registration as an adverse claim, and the court, upon a petition of any party in interest, shall grant a speedy hearing upon the question of the validity of such adverse claim and shall enter such decree therein as justice and equity may require. If the claim is adjudged to be invalid, the registration shall be cancelled. If in any case, the court after notice and hearing shall find that a claim thus registered was frivolous or vexatious, it may tax the adverse claimant double or treble the costs in its discretion. The validity of the above-mentioned rules on adverse claims has to be reexamined in the light of the changes introduced by P.D. 1529, which provides: Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse 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 on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest: Provided, however, that

after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant. Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and hearing shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos, nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect. (Italics ours) In construing the law aforesaid, care should be taken that every part thereof be given effect and a construction that could render a provision inoperative should be avoided, and inconsistent provisions should be reconciled whenever possible as parts of a harmonious whole.[25] For taken in solitude, a word or phrase might easily convey a meaning quite different from the one actually intended and evident when a word or phrase is considered with those with which it is associated.[26] In ascertaining the period of effectivity of an inscription of adverse claim, we must read the law in its entirety. Sentence three, paragraph two of Section 70 of P.D. 1529 provides: The adverse claim shall be effective for a period of thirty days from the date of registration. 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: 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. 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. A statutes clauses and phrases must not be taken separately, but in its relation to the statutes totality. Each statute must, in fact, be construed as to harmonize it with the

pre-existing body of laws. Unless clearly repugnant, provisions of statutes must be reconciled. The printed pages of the published Act, its history, origin, and its purposes may be examined by the courts in their construction.[27] An eminent authority on the subject matter states the rule candidly: A statute is passed as a whole and not in parts or sections, and is animated by one general purpose and intent. Consequently, each part or section should be construed in connection with every other part or section so as to produce a harmonious whole. It is not proper to confine its intention to the one section construed. It is always an unsafe way of construing a statute or contract to divide it by a process of etymological dissection, into separate words, and then apply to each, thus separated from the context, some particular meaning to be attached to any word or phrase usually to be ascertained from the context.[28] Construing the provision as a whole would reconcile the apparent inconsistency between the portions of the law such that the provision on cancellation of adverse claim by verified petition would serve to qualify the provision on the effectivity period. The law, taken together, simply means that the cancellation of the adverse claim is still necessary to render it ineffective, otherwise, the inscription will remain annotated and shall continue as a lien upon the property. For if the adverse claim has already ceased to be effective upon the lapse of said period, its cancellation is no longer necessary and the process of cancellation would be a useless ceremony.[29] It should be noted that the law employs the phrase may be cancelled, which obviously indicates, as inherent in its decision making power, that the court may or may not order the cancellation of an adverse claim, notwithstanding such provision limiting the effectivity of an adverse claim for thirty days from the date of registration. The court cannot be bound by such period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation on the period of effectivity is immaterial in determining the validity or invalidity of an adverse claim which is the principal issue to be decided in the court hearing. It will therefore depend upon the evidence at a proper hearing for the court to determine whether it will order the cancellation of the adverse claim or not.[30] To interpret the effectivity period of the adverse claim as absolute and without qualification limited to thirty days defeats the very purpose for which the statute provides for the remedy of an inscription of adverse claim, as the annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529 or the Property Registration Decree), and serves as a warning to third parties dealing with said property that someone is claiming an interest or the same or a better right than the registered owner thereof.[31]

The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising from such adverse claim. This is in line with the provision immediately following: Provided, however, that after cancellation, no second adverse claim shall be registered by the same claimant. Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will be precluded from registering a second adverse claim based on the same ground. It was held that validity or efficaciousness of the claim may only be determined by the Court upon petition by an interested party, in which event, the Court shall order the immediate hearing thereof and make the proper adjudication as justice and equity may warrant. And it is only when such claim is found unmeritorious that the registration of the adverse claim may be cancelled, thereby protecting the interest of the adverse claimant and giving notice and warning to third parties.[32] In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title No. N-79073 was still in effect on February 12, 1985 when Quezon City Sheriff Roberto Garcia annotated the notice of levy on execution thereto. Consequently, he is charged with knowledge that the property sought to be levied upon on execution was encumbered by an interest the same as or better than that of the registered owner thereof. Such notice of levy cannot prevail over the existing adverse claim inscribed on the certificate of title in favor of the petitioners. This can be deduced from the pertinent provision of the Rules of Court, to wit: Section 16. Effect of levy on execution as to third persons- The levy on execution shall create a lien in favor of the judgment creditor over the right, title and interest of the judgment debtor in such property at the time of the levy, subject to liens or encumbrances then existing. (Italics supplied) To hold otherwise would be to deprive petitioners of their property, who waited a long time to complete payments on their property, convinced that their interest was amply protected by the inscribed adverse claim. As lucidly observed by the trial court in the challenged decision:

True, the foregoing section provides that an adverse claim shall be effective for a period of thirty days from the date of registration. Does this mean however, that the plaintiffs thereby lost their right over the property in question? Stated in another, did the lapse of the thirty day period automatically nullify the contract to sell between the plaintiffs and the Uychocdes thereby depriving the former of their vested right over the property? It is respectfully submitted that it did not.[33] As to whether or not the petitioners are buyers in good faith of the subject property, the same should be made to rest on the findings of the trial court. As pointedly observed by the appellate court, there is no question that plaintiffs-appellees were not aware of the pending case filed by Pilares against Uychocde at the time of the sale of the property by the latter in their favor. This was clearly elicited from the testimony of Conchita Sajonas, wife of plaintiff, during cross-examination on April 21, 1988.[34] ATTY. REYES Q - Madam Witness, when Engr. Uychocde and his wife offered to you and your husband the property subject matter of this case, they showed you the owners transfer certificate, is it not? A - Yes, sir. Q - That was shown to you the very first time that this lot was offered to you for sale? A - Yes. Q - After you were shown a copy of the title and after you were informed that they are desirous in selling the same, did you and your husband decide to buy the same? A - No, we did not decide right after seeing the title. Of course, we visited... Q - No, you just answer my question. You did not immediately decide? A - Yes. Q - When did you finally decide to buy the same? 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.

Q - How soon after you were offered this lot did you verify the exact location and the genuineness of the title, as soon after this was offered to you? A - I think its one week after they were offered.[35] A purchaser in good faith and for value is one who buys property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same, at the time of such purchase, or before he has notice of the claims or interest of some other person in the property.[36] Good faith consists in an honest intention to abstain from taking any unconscientious advantage of another.[37] Thus, the claim of the private respondent that the sale executed by the spouses was made in fraud of creditors has no basis in fact, there being no evidence that the petitioners had any knowledge or notice of the debt of the Uychocdes in favor of the private respondents, nor of any claim by the latter over the Uychocdes properties or that the same was involved in any litigation between said spouses and the private respondent. While it may be stated that good faith is presumed, conversely, bad faith must be established by competent proof by the party alleging the same. Sans such proof, the petitioners are deemed to be purchasers in good faith, and their interest in the subject property must not be disturbed. At any rate, the Land Registration Act (Property Registration Decree) guarantees to every purchaser of registered land in good faith that they can take and hold the same free from any and all prior claims, liens and encumbrances except those set forth on the Certificate of Title and those expressly mentioned in the ACT as having been preserved against it. Otherwise, the efficacy of the conclusiveness of the Certificate of Title which the Torrens system seeks to insure would be futile and nugatory.[38] ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated October 17, 1991 is hereby REVERSED and SET ASIDE. The decision of the Regional Trial Court dated February 15, 1989 finding for the cancellation of the notice of levy on execution from Transfer Certificate of Title No. N-109417 is hereby REINSTATED. The inscription of the notice of levy on execution on TCT No. N-109417 is hereby CANCELLED. Costs against private respondent. SO ORDERED.