G.R. No.

128563

March 25, 2004

EQUATORIAL REALTY DEVELOPMENT, INC., petitioner,

vs.
SPS. DESIDERIO & EDARLINA FROGOZO, and the HON. COURT OF
APPEALS, respondents.
DECISION
TINGA, J.:
Spouses Zosimo and Benita Asis were the owners of a parcel of land, and the improvements
thereon, located in Manila, and covered by Transfer Certificate of Title (TCT) No. 119203.
On January 17, 1983, spouses Desiderio and Edarlina Frogozo, private respondents herein,
caused the annotation of an adverse claim, Entry No. 1245,1 at the back of said TCT No. 119203.
Three years later, on August 28, 1986, petitioner Equatorial Realty Development, Inc. (ERDI)
levied on the property, annotating at the back of the same TCT a notice of levy under Entry No.
964-65.
On February 12, 1988, the spouses Asis and the spouses Frogozo executed a Deed of Absolute
Sale, as a result of which TCT No. 178892 was issued in the name of the latter. As TCT No.
178892 carried with it the annotation of the notice of levy in favor of ERDI, the Frogozos asked
for the cancellation of said annotation before the Regional Trial Court (RTC) of Manila on March
4, 1988. The RTC granted the cancellation of the annotation in LRC Record No. 4004.
On May 14, 1993, ERDI appealed the RTC Order to the Court of Appeals, raising the question of
whether the RTC erred in ordering the cancellation of the annotation of the notice of levy.
After the parties filed their respective briefs, petitioner filed a Reply to which respondent followed
with a Rejoinderand a Supplemental Rejoinder. Petitioner moved to expunge the latter two
pleadings but the Court of Appeals purportedly did not act on said motions. Instead, on March
12, 1997, the appellate court rendered its Decision2denying the appeal on the ground that the
issues raised by ERDI, being pure questions of law, were not reviewable by it.
ERDI thus filed with this Court the present Petition for Review.
Petitioner ERDI submits that the Court of Appeals erred in considering private respondent
spouses Frogozos rejoinders without resolving ERDIs motions to expunge. This contention has
no merit. Although the Court of Appeals did not resolve the motions expressly, it did so tacitly,
albeit belatedly, when it rendered its Decision. By proceeding to decide the case, the appellate
court in effect denied petitioners motions to expunge and considered respondents rejoinder and
supplemental rejoinder as properly and reasonably filed.3
Petitioner likewise claims that the Court of Appeals erred in dismissing its appeal for lack of
jurisdiction on the ground that the questions raised were purely legal.
Section 9 of Batas Pambansa Blg. 129, otherwise known as the Judiciary Reorganization Act of
1980, vests in the Court of Appeals exclusive appellate jurisdiction over all final decisions and
orders of the Regional Trial Courts, except those falling within the appellate jurisdiction of the
Supreme Court in accordance with, among others, the Constitution and Republic Act No. 296
(the Judiciary Act of 1948). Among the cases falling under the appellate jurisdiction of the
Supreme Court and, thus, outside the appellate jurisdiction of the Court of Appeals are appeals
where only questions of law are involved. In such case, Section 25 of the Interim Rules and

Guidelines Implementing B. P. Blg. 129, in conjunction with Section 3 of Republic Act No. 5440,
provides that the appeal to the Supreme Court shall be taken by petition for certiorari, which shall
be governed by Rule 45 of the Rules of Court.
There is a question of law when the doubt or difference arises as to what the law is pertaining to
a certain state of facts.4 The facts of this case are not in dispute. Therefore, as correctly pointed
out by private respondents, and, as held by the Court of Appeals, the issues raised by petitioner
on appeal are pure questions of law, to wit:
(a) Petitioners adverse claim, registered on January 17, 1983, is effective only for a
period of thirty (30) days from the date of registration or until February 16, 1983. (page 4,
appellants Brief).
(b) All property of the judgment debtor, real and personal, of every name and nature
whatsoever and which may be disposed of for value, may be levied upon on execution.
What is controlling is the law/Rules of Court, not the writ. (page 12, ibid.).
(c) The fact that the title over the subject property is no longer in the name of the spouses
Asis cannot and should not militate against oppositors claim/levy because at the time of
levy of August 28, 1986, the property was still in the name of Asis. (page 13, ibid.).
(d) The act of registration is the operative act to effect [sic] the land insofar as third
persons are concerned. From the standpoint of third parties, it is a positive rule that a
property registered under the Torrens system remains, for all legal intents and purposes,
the property of the person in whose name it is registered or inscribed, notwithstanding
the alleged execution of any Deed of Conveyance or encumbrance, unless the
corresponding deed is inscribed or registered (page 13, ibid).5
Consequently, the dismissal by the Court of Appeals of petitioners appeal was in order, pursuant
to Supreme Court Circular No. 2-90, dated March 9, 1990, which mandates the dismissal of
appeals involving pure questions of law erroneously brought to the Court of Appeals:
4. Erroneous Appeals. An appeal taken to either the Supreme Court or the Court of Appeals
by the wrong or inappropriate mode shall be dismissed.
....
(c) Raising issues purely of law in the Court of Appeals, or appeal by wrong mode. If an appeal
under Rule 41 is taken from the Regional Trial Court to the Court of Appeals and therein the
appellant raises only questions of law, the appeal shall be dismissed, issues purely of law not
being reviewable by said court. . . .
....
(e) Duty of counsel. It is therefore incumbent upon every attorney who would seek review of a
judgment or order promulgated against his client to make sure of the nature of the errors he
proposes to assign, whether the case be of fact or of law; then upon such basis to ascertain
carefully which Court has appellate jurisdiction; and finally, to follow scrupulously the requisites
for appeal prescribed by law, ever aware that any error or imprecision in compliance may well be
fatal to his clients cause.
In any case, petitioners appeal before the Court of Appeals has no merit. There, petitioner
claimed that the RTC erred in ordering the cancellation of the annotation of the petitioners levy
appearing as Entry No. 964-65, at the back of TCT No. 178892. Petitioner argued that under
Section 70 of Presidential Decree No. 1529, otherwise known as the Property Registration

Decree, the adverse claim annotated by private respondents Frogozos on January 17, 1983 was
effective only for thirty (30) days or up to February 16, 1983, even without any party seeking the
cancellation of said annotation.6 An adverse claim, petitioner contended, "automatically expires
after thirty (30) days from registration by sheer force of law, no judicial declaration to that effect
being necessary."7According to petitioner, "[r]esort to the Court is only necessary when the party
aggrieved by the adverse claim cannot wait for the lapse of the thirty (30) days from annotation,
and wants the adverse claim cancelled before the expiration of the thirty (30) day period."8
Before this Court, petitioner echoed the same arguments.
This Court rejected these same contentions in Sajonas v. Court of Appeals,9 thus:
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 automatically loses 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.
....
The question may be posed, was the adverse claim inscribed in the Transfer Certificate of Title
No. N-190417 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?.
....
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, if 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 had to be reexamined in the light of
the changes introduced by P.D. 1529, which provides:
"Sec. 70. Adverse claimWhoever 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 certificates or 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 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 the said period, the
annotation of adverse claim may be cancelled upon filing of a verified petition therefore 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 claims thus registered was frivolous, it may fine the claimant in the
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." (Emphasis 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. 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.
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 therefore 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.
....
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 the said period, its

cancellation is no longer necessary and the process of cancellation would be a useless

ceremony.
It should be noted that the law employs the phrase "may be cancelled," which obviously
indicates, as inherent in its decision making power, that the court may or may not order the
cancellation of an adverse claim notwithstanding such provision limiting the effectivity of an
adverse claim for thirty days from the date of registration. The court cannot be bound by such
period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation on
the period of effectivity is immaterial in determining the validity or invalidity of an adverse claim
which is the principal issue to be decided in the court hearing. It will therefore depend upon the
evidence at a proper hearing for the court to determine whether it will order the cancellation of
the adverse claim or not.
To interpret the effectivity period of the adverse claim as absolute and without qualification
limited to thirty days defeats the purpose for which the statute provides for the remedy of an
inscription of an 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 on the same or a better right than the
registered owner thereof.
The reason why the law provides for a hearing where the validity of the adverse claim is to be
threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue
where the propriety of his claimed interest can be established or revoked, all for the purpose of
determining at last the existence of any encumbrance on the title arising from such adverse
claim. 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."
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.10
The ruling in Sajonas found reiteration and affirmation in Diaz-Duarte v. Ong.11
Finally, the RTC did not err in ordering the cancellation of the notice of levy at the back of TCT
No. 178892, and this Court affirms its ruling, as follows:
. . . . While admittedly the notice of levy was originally annotated on the certificate of title of
Benita Asia (one of the judgment debtors in Civil Case No. 097455) under Transfer Certificate of
Title No. 119203 such that even if her title is later on cancelled and a new one issued to a
subsequent transferee, the notice of levy is still binding on the latter, the Court is of the view that
this is not so in the notice of levy under consideration because the same is ineffective for being
unauthorized considering that as earlier stated the writ of execution pursuant to which the
notice was taken made mention only of the goods and chattels of both Benita Asis and
Guadalupe Lucila . . . .12
It is true that, in the execution of money judgments, the Rules of Court13 allow the levying on "all
the property,real and personal of every name and nature whatsoever, of the judgment debtor not
exempt from execution," pursuant to which petitioner submits that the Rules should prevail over
the writ of execution. Nevertheless, it is also true that the sheriffs duty in the execution of a writ
issued by a court is purely ministerial. He is supposed to execute the order of the court strictly to
the letter.14 Only that portion of a decision ordained or decreed in the dispositive portion should
be the subject of execution. No more, no less.15 The validity of the writ of execution should not be
left to the determination of the sheriff or the parties, for that matter. As the writ of execution
covered only "goods and chattels," the levy on the real property under TCT No. 119203 is in
excess of the sheriffs authority. The cancellation of the annotation of such levy was justified.
Even if the writ of execution covered real property, following Sajonas16 again, the notice of levy
cannot prevail over the subsisting adverse claim annotated at the back of the title at the instance
of the private respondents. Be it noted that, as recited in the affidavit of adverse claim,17 private
respondents paid earnest money to the Asis spouses for the purchase of the property, with the
balance of the purchase price to be paid upon the execution of the deed of absolute sale.
Eventually, the Asis couple executed the deed of absolute sale in favor of private respondents,
as a consequence of which a new title was issued in the name of the latter.
The foregoing renders unnecessary the resolution of the other substantive issues raised by
petitioner.
WHEREFORE, the Petition is DENIED.
SO ORDERED.

SPS. JESUS CHING AND LEE POE TIN,

G.R. No. 156076

Petitioners,

Present:

- versus -

PUNO, C.J., Chairperson,

SPS. ADOLFO & ARSENIA ENRILE,

CORONA,

Respondents.

CARPIO MORALES*,
AZCUNA, and
LEONARDO-DE CASTRO, JJ.
Promulgated:
September 17, 2008

x------------------------------------------------------------------------------------------x
DECISION
LEONARDO-DE CASTRO, J.:
Assailed in the instant petition for review on certiorari are the Decision1 of the Court of Appeals
(CA) dated August 29, 2002 in CA-G R. CV No. 42985 and the Resolution2 dated November 21, 2002
denying petitioners motion for reconsideration.
The assailed CA decision reversed the decision of the Regional Trial Court (RTC) of Makati City,
Branch 135, in Civil Case No. 90-064, an action for quieting of title thereat commenced by
petitioner spouses Jesus Ching and Lee Poe Tin against respondent spouses Adolfo and Arsenia
Enrile.
The antecedent facts follow.
On September 5, 1985, petitioners purchased from a certain Raymunda La Fuente a 370-square
meter lot located at Barrio Tungtong, Las Pias and covered by TCT No. 83618. La Fuente delivered
to petitioners a duly notarized Deed of Absolute Sale3 with the Owners Duplicate Certificate of
Title and thereafter, petitioners took physical possession of the subject property.
For reasons known only to petitioners, the conveyance was not registered in the Register of Deeds
as prescribed by Section 51 of PD 15294 . Instead, on November 20, 1986, petitioners executed an
Affidavit of Adverse Claim which was recorded and annotated at the back of TCT No. 83618
reflected in the Memorandum of Encumbrances under Entry No. 86-62262.5
In the meantime, petitioners peacefully and continuously possessed the subject property.
On August 19, 1988 three years after they purchased the disputed property, petitioners received
a Notice of Levy on Attachment and Writ of Execution issued by the Regional Trial Court (RTC) of
Pasig in favor of respondents, in Civil Case No. 54617 entitled Sps. Adolfo Enrile and Arsenia Enrile
v. Raymunda La Fuente.
The Notice of Levy on Attachment was recorded at the dorsal portion of TCT No. 83618 under Entry
No. 3433-2 while the Writ of Execution was inscribed under Entry No. 3434-2. Also inscribed in the
TCT is the Certificate of Sale dated January 26, 1989 covering the disputed property in favor of
respondents.
On January 8, 1990, petitioners filed a Petition to Remove Cloud on or Quiet Title to Real Property
asserting ownership of the disputed property.

On May 11, 1993, the RTC rendered judgment in favor of petitioners upholding the latters superior
right over the disputed property in view of the registration of the Affidavit of Adverse Claim prior to
the Certificate of Sale annotated in favor of respondents. Dispositively the decision reads:
WHEREFORE, premises, the above-entitled petition is granted for being preponderantly
meritorious. Judgment is hereby rendered ordering:
1) The Register of Deeds of Las Pias, Metro Manila to cancel all the annotations of encumbrances
in favor of defendants [respondents] in Transfer Certificate of Title No. 83618 issued by the Register
of Deeds of Pasay City, Metro Manila, District IV;
2) Defendants [respondents] to pay plaintiffs [petitioners] in the sum of P 10,000.00 as
compensatory damages by way of litigation expenses;
3) To pay to plaintiffs [petitioners] the sum of P 10,000.00 as attorneys fees; and,
4) To pay the cost of the proceedings.
SO ORDERED.
In time, respondents appealed to the CA, principally arguing that the RTC committed reversible
error in ruling that petitioners had a better right over the disputed property. Respondents theorized
that the prior conveyance of the disputed property made by La Fuente to petitioners being a
voluntary dealing with a registered land, mere registration of their adverse claim was insufficient.
To respondents, in order to have petitioners interest protected, they should have registered the
Deed of Absolute Sale with the Register of Deeds pursuant to Section 51 of PD 1529 and not merely
register an adverse claim under Section 70 of the same law. Citing the second paragraph of Section
70 which provides that an adverse claim shall be effective for a period of thirty days from the date
of registration, respondents insisted that the annotated Adverse Claim of petitioners had already
expired, hence, it offered no protection when respondents acquired the disputed property through
execution sale.
On August 29, 2002, the CA rendered the herein challenged decision reversing that of the RTC. Even
as the CA viewed the prior sale of the disputed lot in favor of petitioners as perfected and
consummated, it nonetheless upheld respondents preferential right over the disputed property.
Finding merit in respondents arguments, the CA ruled:
This Court, also believes that there is truth in defendants-appellants assertion that while the sale is
perfected and consummated, plaintiffs-appellees failed to diligently protect their interests by failing
to register the conveyance or transaction in the office of Register of Deeds. An owner of a
registered land is vested by law with rights and obligations and thus exercises all attributes of
ownership. These attributes include among others the right to dispose the real property itself. The
owner of the land may convey, mortgage, lease or otherwise deal with the same in accordance with
existing laws. He may use such forms of deeds, mortgages, leases or other voluntary instrument as
are sufficient in law. However, as clearly provided by Section 51 of Presidential Decree 1529, no
deed, mortgage, lease or other voluntary instrument, except a will purporting to convey or affect
registered land shall take effect as a conveyance or bind the land, until the same has been
registered in the office of the Register of Deeds. It shall operate only as a contract between the
parties and as evidence of authority to the Register of Deeds to effect registration. The act of
registration shall be the operative act to convey or affect the land insofar as third persons are
concerned, and in all cases under this Decree, the registration shall be made in the Office of the

Register of Deeds of the province or city where the land lies. Unless and until the subject
transaction has been filed or registered in the office of the Register of Deeds, the transaction shall
only be binding on the parties to the contract but not on the third person. The instrument is not
thereby rendered void by failure to register. Section 51 of PD 1529 states:
Section 51. Conveyance and other dealings by registered owner An owner of registered land may
convey, mortgage, lease, charge or otherwise deal with the same in accordance with existing laws.
He may use such forms of deeds, mortgages, leases or other voluntary instruments as are sufficient
in law. But no deed, mortgage, lease or other voluntary instrument, except a will purporting to
convey or affect registered land shall take effect as a conveyance or bind the land, but shall operate
only as a contract between the parties and as evidence of authority to the Register of Deeds to
make registration.
The act of registration shall be the operative act to convey or affect the land insofar as third
persons are concerned, and in all cases under this Decree, the registration shall be made in the
office of the Register of Deeds for the province or city where the land lies.
Laying the blame on petitioners, the CA added:
The law provides protection to third person, who believing in good faith and relying on the sweet
representations of some evil minded persons, may be unjustifiably inveigled to enter into a contract
or transaction not knowing that the subject real property has been encumbered or sold. It is the
duty of the buyer or vendee to register the transaction before the Register of Deeds of the province
or city where the property lies. The registration is intended to inform any minded individual that
the property has been subjected to a prior transaction and that entering into any further contract
involving the same property shall be at his own risk. In the event that any third person was bona
fide tricked to enter into any transaction involving the same property because the transferee or
vendee failed to register the same as required by law, the latters interests should be subordinated
to that of the third party. Axiomatic is the rule in this jurisdiction that when loss or damage was
caused to two individuals who both acted in good faith but one is negligent, the loss or damage
shall fall upon the one who acted negligently.
Citing a myriad of jurisprudence6 , the CA declared that respondents, as attaching creditors who
registered the order of attachment and the sale of the property to them as the highest bidders,
acquired a valid title to the disputed property as against petitioners who had previously bought the
same property from the registered owner but failed to register their deed of sale.
The CA further declared respondents as purchasers in good faith. On the premise that petitioners
filing of the Affidavit of Adverse Claim was procedurally flawed and that the annotated adverse
claim had already prescribed on December 20, 1986 after the lapse of 30 days from its registration
which was November 20, 1986, the CA ruled that it cannot be considered sufficient notice to third
person like the respondents who were not aware of the sale of the disputed lot to petitioners prior
to the levy on attachment.
As stated at the threshold hereof, the CA, in its decision7 of August 29, 2002, reversed and set aside
that of the RTC, thus:
WHEREFORE, in view of the foregoing, the Decision dated May 11, 1993 of the Regional Trial Court,
National Capital Judicial Region, Branch 135, Makati City in Civil Case No. 90-064 is hereby
REVERSED.

The Register of Deeds of Las Pias, Metro Manila is hereby mandated not to cancel any annotations
of encumbrances in favor of defendants-appellants in Transfer Certificate of Title No. 83618 issued
by the Register of Deeds of Pasay City, Metro Manila, Dist. IV.
Who among the parties has a preferential right over the disputed property.
SO ORDERED.
Their motion for reconsideration having been denied by the CA in its challenged Resolution of
November 21, 2002, petitioners are now before this Court, faulting the CA as follows:
WITH DUE RESPECT, THE COURT A QUO GRAVELY ERRED AND ABUSED ITS DISCRETION WHEN IT
RENDERED SUBJECT DECISION AND RESOLUTION IN A WAY PROBABLY NOT IN ACCORD WITH LAW
OR RULES WITH THE APPLICABLE DECISIONS OF THE SUPREME COURT; Specifically, the Court a quo
erred;
a. When it held that the levy on attachment LATER annotated shall prevail over the Adverse Claim
EARLIER annotated at the back of the title by the mere lapse of 30 days and even without any
petition in court for its cancellation;
b. When it did not dismiss the appeal considering that the question raised were questions of law
and NO question of fact.8
The petition is impressed with merit.
At the outset, the Court finds that the CA committed reversible error when it ruled that the
annotated adverse claim had already prescribed by the mere lapse of 30 days from its registration.
The issue is no longer of first impression. In the 1996 case of Sajonas v. Court of Appeals,9 we
explained that a notice of adverse claim remains valid even after the lapse of the 30-day period
provided by Section 70 of PD 1529. Section 70 provides:
Whoever claims any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no other provision is made in this Decree
for registering the same, make a statement in writing, setting forth fully his alleged right or interest,
and how or under whom acquired, a reference to the number of the certificate of title of the
registered owner, and a description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a
place at which all notices may be served upon him. This statement shall be entitled to registration
as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of
thirty days from the date of registration. After the lapse of said period, the annotation of adverse
claim may be cancelled upon filing of a verified petition therefor by the party in interest. Provided,
however that after cancellation, no second adverse claim based on the same ground shall be
registered by the same claimant.
In the same case, we held that for as long as there is yet no petition for its cancellation, the notice
of adverse claim remains subsisting: Thus:
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 the adverse claim may be cancelled upon filing of a
verified petition therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the
lapse of thirty days, then it would not have been necessary to include the foregoing caveat to clarify
and complete the rule. For then, no adverse claim need be cancelled. If it has been automatically
terminated by mere lapse of time, the law would not have required the party in interest to do a
useless act.10
In a petition for cancellation of adverse claim, a hearing must first be conducted. The hearing will
afford the parties an opportunity to prove the propriety or impropriety of the adverse claim.11
Now, as we see it, the recourse will either rise or fall on the decisive question of whether or not
respondents were purchasers in good faith when they acquired the disputed lot despite the
annotated adverse claim on their title.
We rule and so hold that they were not.
The Court has invariably ruled that in case of conflict between a vendee and an attaching creditor,
an attaching creditor who registers the order of attachment and the sale of the property to him as
the highest bidder acquires a valid title to the property as against a vendee who had previously
bought the same property from the same owner but who failed to register his deed of sale. This is
because registration is the operative act that binds or affects the land insofar as third persons are
concerned. It is upon registration that there is notice to the whole world. But where a party has
knowledge of a prior existing interest, as here, which is unregistered at the time he acquired a right
to the same land, his knowledge of that prior unregistered interest has the effect of registration as
to him.12 Knowledge of an unregistered sale is equivalent to registration.13
The general rule is that a person dealing with registered land is not required to go behind the
register to determine the condition of the property. In that case, such person is charged with notice
of the burden on the property which is noted on the face of the register or certificate of title.14
Article 1544 of the Civil Code governs in cases of double sale. It provides:
Should it be immovable property, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person who in good faith was first
in the possession; and, in the absence thereof, to the person who presents the oldest title, provided
there is good faith.
An "innocent purchaser for value" or any equivalent phrase shall be deemed to include, under the
Torrens System, the innocent lessee, mortgagee, and other encumbrancer for value.15
In Bautista v. Court of Appeals,16 we held that where the thing sold twice is an immovable, the one
who acquires it and first registers it in the Registry of Property, in good faith, shall be the owner.
Who then can be considered a purchaser in good faith?
In the early case of Leung Yee v. F.L. Strong Machinery Co. and Williamson,17 the Court explained
good faith in this wise:
One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim
that he has acquired title thereto in good faith as against the true owner of the land or of an

interest therein; and the same rule must be applied to one who has knowledge of facts which
should have put him upon such inquiry and investigation as might be necessary to acquaint him
with the defects in the title of his vendor.18
Good faith, or the want of it, is capable of being ascertained only from the acts of one claiming its
presence, for it is a condition of the mind which can only be judged by actual or fancied token or
signs.19
It is beyond dispute that the property in question had already been sold by La Fuente to petitioners
on September 5, 1985. Petitioners immediately took possession thereof. When the Notice of Levy
on Attachment was recorded at the dorsal portion of TCT No. 83618 and when the Writ of
Execution and Certificate of Sale were inscribed under Entry No. 3434-2 in favor of respondents, on
January 26, 1989, petitioners have been, since September 5, 1985, in actual, physical, continuous
and uninterrupted possession.
The law does not require a person dealing with the owner of registered land to go beyond the
certificate of title as he may rely on the notices of the encumbrances on the property annotated on
the certificate of title or absence of any annotation. Here, petitioners adverse claim is annotated at
the back of the title coupled with the fact that they are in possession of the disputed property. To
us, these circumstances should have put respondents on guard and required them to ascertain the
property being offered to them has already been sold to another to prevent injury to prior innocent
buyers. A person who deliberately ignores a significant fact which would create suspicion in an
otherwise reasonable man is not an innocent purchaser for value. It is a well-settled rule that a
purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and
then claim that he acted in good faith under the belief that there was no defect in the title of the
vendor.20
As aptly observed by the RTC, regardless of the non-registration of the Deed of Absolute Sale to
petitioners, nor the 30-day effectivity of the adverse claim under Section 70 of PD 1529,
respondents were constructively notified of petitioners prior purchase of the disputed property.
We quote with approval the RTCs observation on this matter, thus:
xxx In derogation to defendants claim that they have a better right over the questioned property
superior over that of the plaintiffs, the Court has only to carefully examine the face of TCT No.
83618 and its dorsal part on Memorandum of Encumbrances for entries and inscriptions in their
chronological order of dates of annotation of documents in the Office of the Register of Deeds. On
the title itself it is readily perceived and palpable that Entry No. 86-62262/T-83618 in reference to
the Adverse Claim executed by plaintiff Jesus Ching was registered way ahead on November 20,
1986 compared to Entries Nos. 3433-2, 3434-2 and 736-3, respectively the Notice of Levy, Writ of
Execution and Certificate of Sale in favor of spouses defendants Enrile which were duly registered
on August 19, 1988 (for the first two documents) and on March 21, 1989 (for the last document).
Perforce, before the registrations of the three documents purporting to be the rights and interests
of defendants in the property in question, the defendants more particularly and the whole world in
general were given constructive notice that Raymunda La Fuente, the judgment debtor in Civil Case
No. 54617 of the Regional Trial Court of Pasig, has no more interest and rights to the property
subject of litigation. Defendants should have at the first instance been duly warned and notified
that the property involved in litigation subject to attachment and levy, execution and sale from
actual registration of the defendants documents referred herein. The annotation of inscription to
Entry No. 86-622/T-83618 is obviously and indeed very clear indicating that the plaintiffs registered

adverse claim in reference to the sale of the same property sought by defendants to be levied on
attachment, final execution and sale came ahead.21
Hence, the particular circumstances of this case constrain us to rule that respondents were not
purchasers in good faith and, as such, could not acquire good title to the property as against the
former transferee.
WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals promulgated on August
29, 2002, in CA-G R. CV No. 42985, and the Resolution dated November 21, 2002 are hereby
REVERSED and SET ASIDE. In lieu thereof, the decision of the Regional Trial Court, of Makati City
Branch 135, dated May 11, 1993, in Civil Case No. 90-064 is REVIVED and AFFIRMED in toto.
No costs.
SO ORDERED.