G.R. No.

L-18919 December 29, 1962

ABELARDO JAVELLANA, TOMAS JONCO, RUDICO HABANA, EXEQUIEL GOLEZ, ALFREDO ANG, and
FILIPINAS SOLEDAD, in their capacities as Councilors of the Municipal Municipality of Buenavista, Province of
Iloilo, petitioners appellees,
vs.
SUSANO TAYO, as Mayor of the Municipal Municipality of Buenavista, Iloilo, respondent-appellant.

Ramon A. Gonzales for petitioners-appellees.

Rico & Tia for respondent-appellant.

BARRERA, J.:

This is a direct appeal taken by respondent Susano Tayo (Mayor of the Municipality of Buenavista, Iloilo) from the
decision of the Court of First Instance of Iloilo (in Civil Case No. 5558, for mandamus) declaring legal and validity the
regular session held by petitioners Abelardo Javellano Tomas Jonco, Rudico Habana, Exequiel Golez, Alfredo Ang, and
Filipinas Soledad, constituting a majority of the elected councilors of said municipality, and ordering respondent to give
due course to the resolutions and or ordinances passed thereat, and to sign the payrolls corresponding to the session days of
June 1, June 15, July 6, July 20, August 3, August 17, September 7, and September 21, 1960 for payment of the per diems of
petitioner as councilors; to pay said Councilor Golez the sum of P100.00 as moral damages; and to pay P100.00 as
attorney' fees plus costs.

The case was submitted on the following Stipulation of Facts:

That the petitioners are duly elected and qualified a members of the Municipal Council of the Municipality of
Buenavista, Province of Iloilo, Philippines; and that the respondent at the time the acts hereinbelow complained
of took place, was and still is the duly-elected and qualified Mayor of the Municipality of Buenavista, Province of
Iloilo Philippines where he resides and may be served with summons.

II

On February 8, 1960. the Municipal Council of the Municipality of Buenavista, Iloilo, unanimously approved
Resolution No. 5, Series of 1960, dated February 8, 1960, a copy of which is hereto attached to form an integral
part hereon as Annex 'A', which set the regular sessions of the Municipality Council of Buenavista on every first
and third Wednesday of every month, and which resolution was duly approved by the respondent, in his capacity
as Mayor of the Municipality of Buenavista.

III

That on June 1, 1960, at the time and place set for the regular session of the Municipal Council, the Mayor, Vice-
Mayor, No. 1 and No. 2 Councilors, and the Secretary were absent.

IV

That the six councilors, who are the petitioners in this case, were present and they proceeded to elect among
themselves a temporary presiding officer and Acting Secretary to take notes of the proceedings. Having thus
elected a temporary presiding officer and a secretary of the Council, they proceeded to do business.

That on June 15. 1960, at the time and place designated in Resolution No. 5, series of 1960, dated February 8,
1960 above referred to, the petitioners acting as duly elected and qualified councilors were present and again, in
view of the absence of the Mayor, Vice-Mayor said to councilor and the Secretary proceeded to elect a temporary
presiding officer and temporary secretary from among them, and did business as a Municipal Council of
Buenavista.

VI

That again on July 6, and July 21, 1960, on August 3, and August 17, September 7, and on September 21, 1960,
the petitioners met at the place and time designated in Resolution No. 5, series of 1960, and proceeded to elect a
temporary Secretary among themselves, and did business as the Municipal Council of Buenavista, in view again
of the absence of the Mayor Vice-Mayor, 2 councilors, and the Secretary.

VII

That when the minutes of the proceedings of June 1, June 15. July 6, July 20, August 17, September 7, and
September 21, 1960 of the Municipal Council were presented to the respondent for action, the respondent Mayor
refused to act upon said minutes, or particularly to approve or disapprove the resolution as approved by the
municipal Council, the Mayor declaring the sessions above referred to as null and void and not in accordance
with.

VIII

That the petitioners made repeated demands for payment of their per diems for the of June 1, June 15, July 6,
July 20, August 3, August 17, September 7, 1960, by representing the payrolls; Provincial Forms No. 38(A) to the
respondent Mayor for the latter signature, but that the respondent refused to affix his signature to the payrolls
thus presented, covering the per diems of the petitioner alleging that the proceedings were illegal due to his
absence.

IX

That the petitioners, acting through Atty. Bartolome T. Tina, addressed a letter dated August 8, 1960 to the
Honorable Provincial Fiscal of the Province of Iloilo, asking of the latter's opinion on the validity of the acts of
the herein petitioners, acting as the Municipal Council in the absence of the Mayor, Vice-Mayor, said two
councilors and the secretary, a copy which letter is herewith attached as Annex 'B' and made an integral part of
this petition.

That on August 9, 1960, the Honorable Provincial Fiscal of the Province of Iloilo in his indorsement, rendered an
opinion upholding the validity of the controverted sessions of the Municipal Council, a copy, of which
communication is, likewise attached herein is Annex 'C' and made an integral part of this petition.

XI

That despite the opinion of the Provincial Fiscal, the respondent Mayor refused and still refuses to act upon the
resolution petitions presented to him and to sign the payrolls covering the per diems of the herein petitioners.

XII

That the respondent brought the matter to the attention of the Provincial Board, of the Province of Iloilo, by
means of a letter questioning the legality of the minutes of the regular possession of the Municipal Council
without his presence individual that the Provincial Board resolved on September 23, 1960 to return the minutes of
the regular session of the Municipal Council of Buenavista, Iloilo, informing the Mayor that per the opinion of
the Legal Assistant, said minutes is legal.

XIII
 That despite the resolution of the Provincial Board, the Mayor refused and still refuses to recognize the validity of
the acts of the Municipal Council and the legality of its regular session held in his absence.

On the basis of the foregoing Stipulation of Facts (plus the testimony of Councilor Exequiel Golez), the trial court (on July
26, 1961) rendered the decision above adverted to, partly stating:

This Court, after perusal of all the records of this case has reached the conclusion that the sessions held by the
petitioner during the absence of the respondent Mayor were perfectly valid and legal. The attendance of the
Mayor is not essential to the validity of the session as long as there is quorum constituted in accordance with law.
To declare that the proceedings of the petitioners were null and void, is to encourage recalcitrant public officials
who would frustrate valid session for political end or consideration. Public interest will immensely suffer, if a
mayor who belongs to one political group refuses to call or attend a session, because the Council is controlled by
another political group. In a democrats the minority should respect the majority and inasmuch as the petitioners
constitute the majority political group, it is but natural that they could validly hold a valid session, in order to
devise means for public interest.

The respondent here as Municipal Mayor should have given good example, by calling and attending regular
session on the dates fixed by the Council. In the discharge of his of official duty, he should consider the Session
Hall of the Municipal Council as the sanctuary and depository of public interest and public welfare. Any member
of the Council should enter the Session Hall, not as a representative of any political part or group, but as a
representative of the people of the municipality whose interest and welfare should be safeguarded by the Council.
In entering this Hall, he must lay aside his political affiliation, interest, and consideration, because it is the sworn
duty of every councilor to perform his duty with justice and impartiality. Not to attend a meeting, constitutes an
abandonment of the people's welfare. One may be in the minority group, but he can discharge his duty with
honor and prestige as a fiscalizer, to fiscalize the doings and actuations of the majority. He may be overwhelmed
in his plan or project by superior numerical majority but if he could adduce good reasons and arguments in favor
of the welfare of the people, his task as a fiscalizer is thereby attained. There is no fear on attending any session
because if your project is not carried out, you may have the remedy, either by administrative or judicial relief, by
questioning and ordinance or resolution passed by the majority, which may be null and void because they are
excessive and unreasonable. So, there is no reason why the respondent in this case had refused to attend the
session of the Council.

Petitioners here claim moral damages pursuant to the provisions of Article 2219, in connection with Article 21
and Article 27 of the new Civil Code. Said Article 27 provides as follows:

'Any person suffering material or moral loss because a public servant or employee refuses or neglects,
without just cause, to perform his official duty may file an action for damages and other relief against
the latter, without prejudice to any disciplinary administrative action that my be taken.'lawphil.net

But in support of the allegations in the petition, only petitioner Exequiel Golez was presented as a witness who
prove moral damages he suffered as a consequence of the refusal the respondent Susano Tayo to perform his
official duty. such, of all the petitioners, only Exequiel Golez is entitled receive moral damages in the sum of
P100.00.

IN VIEW OF THE FOREGOING, the petition for a writ of mandamus is hereby granted, and the respondent is
here ordered to give due course to the resolutions and ordinance passed by the petitioners in the regular sessions
during the absence of the respondent, to give due course and sign the payrolls covering the periods of June 1,
June 15, July 6, July 20, August 3, August 17, September 7, and September 21, 196 for the payment of per diems
of the petitioners as Municipal Councilors; to pay to said Exequiel Golez, the sum of P100.00 as moral damage,
to pay the sum of P100.00 as attorney's fee and to pay the costs of the proceeding.

SO ORDERED.

Respondent-appellant claims, in this appeal, that the trial court erred in holding that the sessions held by petitioners-
appellees during his absence and during the absence of his Vice-Mayor and the No. 1 and No. 2 Councilors the Municipal
Council of Buenavista, Iloilo were valid an legal.
The claim is untenable. In the first place, there is no question that the sessions at issue were held on the days set for regular
sessions of the council, as authorized an approved in a previous resolution. Secondly, it is not disputed that a majority of
the members of the council (six out of ten) were present in these sessions. Consequently, pursuant to Section 2221 of the
Revised Administrative Code which provides:

SEC. 2221. Quorum of council Enforcing Attendance of absent members. The majority of the council elected shall
constitute a quorum to do business; ....

there was a quorum to do business in all the sessions in question. The term "quorum" has been defined as that
number of members of the body which, when legally as assembled in their proper places, will enable the body to
transact its proper business, or, in other words, that number that makes a lawful body and gives it power to pass a
law or ordinance or do any other valid corporate act. (4 McQuillin, Municipal Corporation [3rd Ed 478]; see also
State vs. Wilkesville Tp., 20 Ohio St. 288).

Appellant, however asserts that while under Section 2221 of the Revised Administrative Code, the majority of the
members of the council constitutes a quorum to do business, the council "shall be presided by the Mayor and no one else",
inasmuch as it is one of the duties imposed upon him under Section 2194(d) of the Revised Administrative Code. 1 The
argument would be correct if the mayor (herein appellant) were present at the sessions in question and was prevented from
presiding therein, but not where, as in the instant case, he absented himself therefrom.

Appellant likewise invokes Section 7 (third paragraph) of Republic Act No. 9264, 2 in support of his view that the sessions
in question were null and void, as they were not presided by him or by his Vice-Mayor, or by the councilor who obtained
the largest number of votes.lawphil.net

It is true that this section mentions only the vice-mayor, or in his place, the councilor who obtained the largest number of
votes who could perform the duties of the mayor, in the event of the latter's temporary incapacity to do so, except the
power to appoint, suspend, or dismiss employees. Ordinarily, this enumeration would be in interpreted as exclusive,
following the general principle of inclusio unius, est exclusio alterius, but there are cogent reasons to disregard this rule in this
case, since to adopt it would cause inconvenience, hardship, and injury to public interest, as it would place in the hands of
mayor, vice-mayor, and the councilor receiving the highest number of votes an instrument to defeat the law investing the
legislative power in the municipal council, by simply boycotting, as they continuously did for 4 months, regular sessions of
the council. It is to be noted that same section 7 of Republic Act No. 2264 invoked by appellant provides, in case of
permanent incapacity of mayor, vice-mayor, and the councilor obtaining the largest number of votes, to assume and
perform the duties of mayor, the councilor receiving the next largest number of votes, and so on, can assume and perform
such duties. We see no strong reason why the same procedure should not be followed in case of temporary incapacity,
there being no express prohibition against its observance. The legal provision being therefore susceptible of two in
interpretations, we adopt the one in consonance with the resumed intention of the legislature to give its enactmentthe most
reasonable and beneficial construction, the that will render them operative and effective and harmonious with other
provisions of law. This is imperative because, as already pointed out heretofore, under the law "the majority of the council
elected shall constitute a quorum to do business", and this would be defeated if adopt the literal interpretation of appellant
that only mayor, vice-mayor, or the councilor receiving the largest number of votes could preside the council's meeting, to
legal, irrespective of the presence of a quorum or majority of the councilors elected. Such an interpretation would, indeed,
be fraught with dangerous consequences. For it would, in effect, deprive the municipal council its function, namely, the
enactment of ordinances design for the general welfare of its inhabitants. As the trial court aptly observed, "To declare that
the proceedings of thepetitioners (herein appellees) were null and void, is to encourage recalcitrant public officials who
would frustrate valid sessions for political end or consideration. Public interest will immensely suffer, if a mayor who
belong to one political group refused to call or attend a session because the council is controlled by another political
group."

Lastly, appellant contests the award of moral damage to appellee councilor Exequiel Golez. We find said award proper
under Article 27 of the new Civil Code, 3 considering that according to the trial court, he (Golez) was able to prove that he
suffered the same, as a consequence of appellant's refusal to perform his official duty, not withstanding the action taken by
the Provincial Fiscal an the Provincial Board upholding the validity of the session in question.

WHEREFORE, the decision appealed from is hereby affirmed with costs against respondent-appellant. So ordered.
G.R. No. 75222 July 18, 1991

RADIOLA-TOSHIBA PHILIPPINES, INC., through its assignee-in-insolvency VICENTE J. CUNA, petitioner,

vs.
THE INTERMEDIATE APPELLATE COURT, HON. LEONARDO I. CRUZ, as Judge of the Regional Trial Court
of Angeles City, Branch No. LVI, EMILIO C. PATINO, as assignee-in-insolvency of CARLOS and TERESITA
GATMAYTAN, SHERIFF OF ANGELES CITY, REGISTER OF DEEDS OF ANGELES CITY, SANYO
MARKETING CORPORATION, S & T ENTERPRISES INC., REFRIGERATION INDUSTRIES INC., and
DELTA MOTOR CORPORATION, respondents.

Quisumbing, Torres & Evangelista for petitioner.

Procopio S. Beltran, Jr. for private respondents.

BIDIN, J.:p

This is a petition for certiorari of the March 31, 1986 Decision of the then Intermediate Appellate Court * in A.C-G.R. SP
No. 04160 entitled "Radiola-Toshiba Philippines, Inc. vs. Hon. Leonardo I. Cruz, et al." denying the petition
for certiorari and mandamus; and its Resolution of July 1, 1986 denying the motion for reconsideration.

The antecedent facts of this case, as found by the then Intermediate Appellate Court, are as follows:

On July 2, 1980, three creditors filed a petition for the involuntary insolvency of Carlos Gatmaytan and
Teresita Gatmaytan, the private respondents herein, the case docketed as Special Proceeding No. 1548
of the then Court of First Instance (now Regional Trial Court) of Pampanga and Angeles City.

On July 9, 1980, the respondent court issued an order taking cognizance of the said petition and
stating inter alia that:

. . . the Court forbids the payment of any debts, and the delivery of any property
owing and belonging to said respondents-debtors from other persons, or, to any other
persons for the use and benefit of the same respondents-debtors and/or the transfer
of any property by and for the said respondents-debtors to another, upon petitioners'
putting up a bond by way of certified and reputable sureties. (Annex 1, Comment).

Counsel for the petitioners-creditors informed respondent sheriff Angeles City of the aforesaid order
(Annex 2, Ibid) and on March 26, 1981, also communicated with counsel for the petitioner herein
regarding same order, apprising the latter that "the personal and real property which have been levied
upon and/or attached should be preserved till the final determination of the petition aforementioned."
(Annex 3, Ibid).

On April 12, 1983, petitioners-creditors filed second urgent motion for issuance of insolvency order and
resolution of the case, alleging among other things, that in November, 1982, they filed an urgent motion
to issue insolvency order; on December 2, 1982, they presented a motion to prohibit the city sheriff of
Angeles City from disposing the personal and real properties of the insolvent debtors, Carlos Gatmaytan
and Teresita Gatmaytan; on January 18, 1983, they (sic) appealed in the Bulletin Today issue of even
date a news item to the effect that Radiola-Toshiba Phil. Inc. has already shut down its factory,
sometime in March 1983, through their representative, they caused to be investigated the real properties
in the names of Carlos Gatmaytan and Teresita Gatmaytan and they were surprised to find out that
some of the aforesaid properties were already transferred to Radiola-Toshiba Phil. Inc.; and that in view
of such development, it is their submission that without an insolvency order and a resolution of the case
which was ripe for resolution as early as March 3, 1982, the rights and interest of petitioners-creditors
would be injured and jeopardized. (Annex "C").
On April 15, 1983, petitioner filed an opposition to the said motion vis-a-vis the prayer that the
insolvency order (which has not been rendered yet by the court) be annotated on the transfer certificates
of title already issued in its name (Annex "D").

On April 22, 1983, judgment was rendered declaring the insolvency of respondents-debtors Carlos
Gatmaytan and Teresita Gatmaytan.

On April 28, 1983, petitioner filed a supplemental opposition to the same second urgent motion and
motion to direct respondent sheriff to issue a final certificate of sale for the properties covered by TCT
Nos. 18905 and 40430 in its favor (Annex "E").

On February 3, 1984, acting upon petitioner's motion claiming that ownership of certain real properties
of the insolvents had passed to it by virtue of foreclosure proceedings conducted in Civil Case No.
35946 of the former Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, which properties
were not redeemed within the period of redemption, respondent court issued an order disposing, thus:

WHEREFORE, the Court hereby, confirms the election of Mr. Emilio C. Patino, as
assignee of all the registered claimants in this case, and, in consequence thereof, the
said assignee is hereby directed to post a bond in the amount of P30,000.00 and to
take his oath thereafter so as to be able to perform his duties and discharge his
functions, as such.

The Court, likewise, sets the meeting of all the creditors with the attendance, of
course, of the assignee, on March 9, 1984, at 8:30., as by that time the proposals,
which the respective representatives of the parties-claimants desire to clear with their
principals, shall have already been reported.

The assignee shall see to it that the properties of the insolvents which are now in the
actual or constructive custody and management of the receiver previously appointed
by the Court on petitioners' and claimants' proposals be placed under this actual or
constructive custody and management, such as he is able to do so, as the Court
hereby dissolves the receivership previously authorized, it having become a
superfluity. (Annex "F").

On May 18, 1984, the Regional Trial Court, Branch CLII, Pasig, Metro Manila, in Civil Case No.
35946, issued an order directing respondent Sheriff of Angeles City, or whoever is acting in his behalf,
to issue within seven (7) days from notice thereof a final deed of sale over the two (2) parcels of land
covered by Transfer Certificates of Titles Nos. 18905 and 40430 in favor of petitioner. (Annex "G").

In said Civil Case No. 35946, a case for collection of sum of money covering the proceeds of television
sets and other appliances, the then Court of First Instance of Rizal, Branch II, Pasig, Metro Manila,
issued a writ of preliminary attachment on February 15, 1980 upon application of the petitioner, as
plaintiff, which put up a bond of P350,000.00. On March 4, 1980, 3:00 P.M., levy on attachment was
done in favor of petitioner on the real properties registered in the names of spouses Carlos Gatmaytan
and Teresita Gatmaytan under TCT Nos. 18905 and 40430 of the Registry of Deeds of Angeles City,
per Entry No. 7216 on said titles. (Annex "A" and "B").

On December 10, 1980, a decision was rendered in favor of petitioner, ordering private respondents and
their co-defendant Peoples Appliance Center, Inc. to pay petitioner, jointly and severally, the sum of
P721,825.91 plus interest thereon of 14% per annum from October 12, 1979 until fully paid; P20,000.00,
for and attorney's fees; and the costs of suit (Annex "5", Comment). After the said decision in the
aforementioned Civil Case No. 35946 became final and executory, a writ of execution for the
satisfaction thereof issued on March 18, 1981; and on May 4, 1981, respondent sheriff of Angeles City
sold at auction sale the attached properties covered by TCT Nos. 18905 and 40430, to petitioner as the
highest bidder, and the certificate of sale was accordingly issued in its favor.
 On September 21, 1982, the court ordered the consolidation of ownership of petitioner over said
properties; but respondent sheriff of Angeles City refused to issue a final certificate of sale in favor of
petitioner.

On May 30, 1984, petitioners-creditors interposed their opposition, stating among other things, that
subject motion is improper and premature because it treats of matters foreign to the insolvency
proceedings; and premature, for the reason that the properties covered by TCT Nos. 18905 and 40430-
Angeles City were brought to the jurisdiction of the insolvency court for the determination of the assets
of the insolvents available for distribution to the approved credits/liabilities of the insolvents.
Petitioners-creditors theorized that the insolvency court is devoid of jurisdiction to grant the motion
referring to matters involved in a case pending before a coordinate court in another jurisdiction (Annex
"l").

Prior thereto or on July 13, 1984, to be precise, respondent court came out with its assailed extended
order with the following decretal portion:

WHEREFORE, and also for the reason stated in the aforequoted order issued in
pursuance of a similar motion of the movant, the Court denies, as it is hereby denied
the motion of Radiola-Toshiba, dated May 28, 1984 and directs the latter to
participate in the supposed meeting of all the creditors/claimants presided by the
duly elected assignee. (Annex "J").

On September 8, 1984, herein petitioner Radiola-Toshiba Philippines, Inc. (RTPI, for short) filed a petition
for certiorari and mandamus with respondent Intermediate Appellate Court.

The then Intermediate Appellate Court, in a Decision promulgated on March 31, 1986, denied petitioner's aforesaid
petition. On April 19, 1986, petitioner filed a motion for reconsideration, but the same was denied in a Resolution dated
July 1, 1986.

Hence, the instant petition. Herein petitioner raised two issues

1. WHETHER OR NOT CERTIORARI IS A REMEDY DESIGNATED FOR THE CORRECTION OF ERRORS OF

JURISDICTION ONLY; and

2. WHETHER OR NOT THE REFUSAL OF THE COURTS TO ENFORCE THE LIEN OF PETITIONER ARISING
FROM A LEVY OF ATTACHMENT NOT MADE WITHIN ONE MONTH NEXT PRECEDING THE
COMMENCEMENT OF THE INSOLVENCY PROCEEDING IS GRAVE ABUSE OF DISCRETION.

The main issue in this case is whether or not the levy on attachment in favor of the petitioner is dissolved by the insolvency
proceedings against respondent spouses commenced four months after said attachment.

On this issue, Section 32 of the Insolvency Law (Act No. 1956, as amended), provides:

Sec. 32 As soon as an assignee is elected or appointed and qualified, the clerk of the court shall, by
an instrument under his hand and seal of the court, assign and convey to the assignee all the real and
personal property, estate, and effects of the debtor with all his deeds, books, and papers relating thereto,
and such assignment shall relate back to the commencement of the proceedings in insolvency, and shall
relate back to the acts upon the adjudication was founded, and by operation of law shall vest the title to
all such property, estate, and effects in the assignee, although the same is then attached on mesne
process, as the property of the debtor. Such assignment shall operate to vest in the assignee all of the
estate of the insolvent debtor not exempt by law from execution. It shall dissolve any attachment levied
within one month next preceding the commencement of the insolvency proceedings and vacate and set aside any
judgment entered in any action commenced within thirty days immediately prior to the commencement of insolvency
proceedings and shall set aside any judgment entered by default or consent of the debtor within thirty days
immediately prior to the commencement of the insolvency proceedings. (Emphasis supplied)

Relative thereto, the findings of the then Intermediate Appellate Court are undisputed that the levy on attachment against
the subject properties of the Gatmaytans, issued by the then Court of First Instance of Pasig in Civil Case No. 35946, was
on March 4, 1980 while the insolvency proceeding in the then Court of First Instance of Angeles City, Special Proceeding
No. 1548, was commenced only on July 2, 1980, or more than four (4) months after the issuance of the said attachment.
Under the circumstances, petitioner contends that its lien on the subject properties overrode the insolvency proceeding and
was not dissolved thereby.

Private respondents, on the other hand, relying on Section 79 of the said law, which reads:

Sec. 79. When an attachment has been made and is not dissolved before the commencement of
proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon
which the attachment suit was commenced is proved against the estate of the debtor, the plaintiff may
prove the legal costs and disbursements of the suit, and of the keeping of the property, and the amount
thereof shall be a preferred debt.

and the fact that petitioner and its counsel have full knowledge of the proceedings in the insolvent case, argue that the
subsequent Certificate of Sale on August 3, 1981, issued in favor of petitioner over the subject properties, was issued in bad
faith, in violation of the law and is not equitable for the creditors of the insolvent debtors; and pursuant to the above quoted
Section 79, petitioner should not be entitled to the transfer of the subject properties in its name.

Petitioner's contention is impressed with merit. The provision of the above-quoted Section 32, of the Insolvency Law is
very clear that attachments dissolved are those levied within one (1) month next preceding the commencement of the
insolvency proceedings and judgments vacated and set aside are judgments entered in any action, including judgment
entered by default or consent of the debtor, where the action was filed within thirty (30) days immediately prior to the
commencement of the insolvency proceedings. In short, there is a cut off period one (1) month in attachment cases and
thirty (30) days in judgments entered in actions commenced prior to the insolvency proceedings. Section 79, on the other
hand, relied upon by private respondents, provides for the right of the plaintiff if the attachment is not dissolved before the
commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon
which the attachment suit was commenced is proved against the estate of the debtor. Therefore, there is no conflict
between the two provisions.

But even granting that such conflict exists, it may be stated that in construing a statute, courts should adopt a construction
that will give effect to every part of a statute, if at all possible. This rule is expressed in the maxim, ut maqis valeat quam
pereat or that construction is to be sought which gives effect to the whole of the statute its every word. Hence, where a
statute is susceptible of more than one interpretation, the court should adopt such reasonable and beneficial construction as
will render the provision thereof operative and effective and harmonious with each other (Javellana vs. Tayo, 6 SCRA
1042 [1962]; Statutory Construction by Ruben E. Agpalo, p. 182).

Neither can the sheriff's sale in execution of the judgment in favor of the petitioner be considered as a fraudulent transfer or
preference by the insolvent debtors, which constitute a violation of Sec. 70 of the Insolvency Law. In the case of Velayo vs.
Shell Co. of the Philippines (100 Phil. 187, [1956]), this Court ruled that Sections 32 and 70 contemplate only acts and
transactions occurring within 30 days prior to the commencement of the proceedings in insolvency and, consequently, all
other acts outside of the 30-day period cannot possibly be considered as coming within the orbit of their operation.

Finally, petitioner correctly argued that the properties in question were never placed under the jurisdiction of respondent
insolvency court so as to be made available for the payment of claim filed against the Gatmaytans in the insolvency
proceedings.

Hence, the denial by respondent insolvency court to give due course to the attachment and execution of Civil Case No.
35946 of the CFI of Rizal constitutes a freezing of the disposition of subject properties by the former which were not within
its jurisdiction; undeniably, a grave abuse of discretion amounting to want of jurisdiction, correctable by certiorari.

WHEREFORE, the March 31, 1986 decision of the then Intermediate Appellate Court is hereby Reversed and SET
ASIDE. The attachment and execution sale in Civil Case No. 35946 of the former CFI of Rizal are given due course and
petitioner's ownership of subject properties covered by TCT Nos. 18905 and 40430 is ordered consolidated.

SO ORDERED.
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.

TORRES, JR., J.:p

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 d'etre 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 H. 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 move d 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 issued 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 attorney's 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 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 of 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 attorney's 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", assigning errors on the part of the lower court. The appellate court
reversed the lower court's 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:

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. Q-28850 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 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 staled 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 sate. 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 Commere 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

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:

Sec. 1. Conveyance and other dealings by the registered owner. -- An owner of

registered land may convey, mortgage, lease, charge, 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 Deeds to make of 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. (Emphasis 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 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 vendor's 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 bank' s 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 vendor's 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.

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 claimant's 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 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.

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 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.
(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. 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 statute's clauses and phrases must not be taken separately, but in its relation to the statute's 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 sections, and is animated by one general purpose and
intent. Consequently, each part or section should be construed in connection with every other part
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 as 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 not order the cancellation of an adverse claim, nothwitstanding 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 a
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 an 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 the 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:

Sec. 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. (Emphasis 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 owner's
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 it' s 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 an 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 respondent, 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 an encumbrances except those set
forth on the Certificate of Title and those expressly mentioned in the ACT as having been reserved 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.