Register of Deeds of Quezon City v. Nicandro
REITERATIONFacts
The Antecedents: The People's Homesite and Housing Corporation (PHHC) sold 159 lots to the Rehabilitation Finance Corporation (RFC), now the Development Bank of the Philippines (DBP), on October 20, 1955. At the time of sale, these lots were part of a larger parcel covered by TCT No. 1356. Subsequently, without DBP's knowledge, the 159 lots were segregated, and a new title, TCT No. 36533, was issued. The subdivision plan was not annotated on the original title, nor was the pro tanto cancellation noted. Procedural History: On January 15, 1959, the sale agreement between PHHC and DBP was presented for registration and inscribed on TCT No. 1356 as a "sale of unsegregated portions." On February 16, 1959, Honesto G. Nicandro and Elisa F. Nicandro presented deeds of sale for two of these lots (Lots Nos. 2 and 4, Block 21) to the Register of Deeds. Their registration was denied due to defects. The Nicandros then filed an affidavit of adverse claim, which was annotated on TCT No. 36533, and a petition to compel the surrender of the owner's duplicate title. Discovering the lots were under TCT No. 36533, DBP annotated its deed of sale on March 6, 1959. Upon DBP's petition, the Register of Deeds transferred the annotation from TCT No. 1356 to TCT No. 36533. The Land Registration Commissioner ruled that the Nicandros were entitled to registration, finding DBP's initial annotation defective and insufficient to bind innocent third parties. DBP appealed this resolution. The Appeal: The Development Bank of the Philippines (DBP) appealed the resolution of the Land Registration Commissioner, arguing that its sale agreement with the People's Homesite and Housing Corporation (PHHC) was valid and registrable. DBP contended that its initial annotation on TCT No. 1356 constituted valid registration, and the subsequent transfer to TCT No. 36533 was proper. DBP also argued that the Nicandros' remedy of adverse claim was improper as there were specific provisions for registering their alleged right as vendees.
Issue(s)
Whether the annotation of the deed of sale in favor of DBP on TCT No. 1356, prior to the issuance of TCT No. 36533 and the annotation of the Nicandros' adverse claim, constitutes valid registration binding on third parties. Whether the Nicandros' resort to an adverse claim under Section 110 of Act 496 was the proper remedy for their alleged right as vendees of registered land.
Ruling
The Supreme Court set aside the Resolution of the Land Registration Commissioner and ordered the Register of Deeds of Quezon City to issue the corresponding certificate of title in favor of the appellant DBP. The Court ruled that DBP's registration was valid and had priority over the Nicandros' adverse claim.
Ratio Decidendi
On Issue 1: The Court held that the annotation of the deed of sale in favor of DBP on TCT No. 1356 on January 15, 1959, constituted valid registration. Although TCT No. 36533 had been issued for the 159 lots, TCT No. 1356 was still uncancelled at the time of DBP's annotation. Therefore, for all intents and purposes, TCT No. 1356 still covered the lots, making the annotation effective. The subsequent transfer of the annotation from TCT No. 1356 to TCT No. 36533 was a correct procedure. Since DBP's sale was registered as of January 15, 1959, and the Nicandros' adverse claim was annotated only on February 17, 1959, DBP's registration had priority. On Issue 2: The Court ruled that the Nicandros' resort to an adverse claim under Section 110 of Act 496 was improper. Section 110 explicitly states that the remedy of adverse claim is available only if "no other provision is made in this Act for registering the same." The Nicandros' claim was based on a perfected contract of sale, for which the Land Registration Act provides specific procedures for registration of a vendee's right. Therefore, the adverse claim was ineffective for protecting their alleged right or interest on the two lots, as it was not the appropriate legal remedy.
Main Doctrine
The Court held that the annotation of a deed of sale on a transfer certificate of title, even if the title was later superseded, constitutes valid registration if made on the subsisting title at the time of annotation. Furthermore, it clarified that an adverse claim, filed under Section 110 of Act 496, is not the proper remedy for a vendee with a perfected contract of sale, as there are specific provisions for registering such a right. The principle of 'first in time, first in right' applies, giving priority to the earlier registered sale.