Armed Forces and Police Mutual Benefit Association, Inc. v. Santiago
REITERATIONFacts
The Antecedents: This case concerns a dispute over the registration of a notice of levy on attachment on a real property. The Armed Forces and Police Mutual Benefit Association, Inc. (AFPMBAI) initiated a civil case against EBR Realty Corporation and others, leading to a Notice of Levy on Attachment on Real Property dated September 12, 1994, concerning EBR Realty Corporation's interest in a property covered by Transfer Certificate of Title (TCT) No. PT-79252. Subsequently, Ines B. Santiago presented a Deed of Absolute Sale dated February 24, 1994, for the same property, which was registered, resulting in the issuance of TCT No. PT-94912 in her name. Procedural History: The Notice of Levy on Attachment was presented for registration on September 14, 1994, and entered in the Primary Entry Book. However, it was not annotated on the original title due to its unavailability. Six days later, the Deed of Absolute Sale in favor of Ines B. Santiago was presented and registered, leading to the issuance of a new title in her name. The Register of Deeds, upon discovering the error, requested Santiago to surrender the documents for rectification, which she refused. This led the Register of Deeds to file a manifestation with the Regional Trial Court. The Land Registration Authority (LRA), acting on a consulta, initially held that the notice of levy could not be annotated on Santiago's title except by court order. After denying a motion for reconsideration, the LRA's decision was appealed to the Court of Appeals (CA). The Petition: The Court of Appeals dismissed AFPMBAI's petition, affirming the LRA's resolution. AFPMBAI then filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision and resolution. AFPMBAI argued that its notice of levy, having been registered earlier in the primary entry book, should take precedence, that Santiago was not an innocent purchaser for value, and that the LRA's decision was erroneous. The Supreme Court is tasked with determining whether the notice of levy can be annotated on Santiago's title and whether a court order is necessary for such annotation.
Issue(s)
Whether the notice of levy on attachment may be annotated on TCT No. PT-94912. Whether a declaration from the court that respondent is a purchaser in bad faith is necessary before the notice of levy on attachment may be annotated on TCT No. PT-94912. Whether a court order is necessary in order that the notice of levy on attachment may be annotated on TCT No. PT-94912.
Ruling
The Supreme Court reversed and set aside the decision of the Court of Appeals. The Register of Deeds of Pasig City was ordered to annotate the notice of levy on attachment on the original copy of TCT No. PT-97252, and respondent Santiago was ordered to surrender the owner's duplicate certificate for proper annotation.
Ratio Decidendi
On the issue of whether the notice of levy on attachment may be annotated on TCT No. PT-94912: The Court held that the notice of levy on attachment in favor of the petitioner may be annotated on TCT No. PT-94912. It distinguished between voluntary and involuntary registration, stating that for involuntary registration, such as an attachment, entry in the day book is sufficient notice to all persons of an adverse claim. The entry of the notice of levy on attachment in the primary entry book on September 14, 1994, served as sufficient notice to all, including respondent Santiago, that the land was subject to attachment. This earlier registration of the levy binds the land concerning third persons, and the fact that the deed of absolute sale was dated earlier is of no moment in this regard. Sections 51 and 52 of P.D. 1529 establish that the act of registration is the operative act to convey or affect the land concerning third persons, and registration creates constructive notice. On the issue of whether a declaration from the court that respondent is a purchaser in bad faith is necessary: The Court ruled that respondent cannot be considered an innocent purchaser for value. Under the rule of notice, a purchaser is presumed to have examined every instrument of record affecting the title and is charged with notice of every fact that an examination of the record would have disclosed. This presumption is irrebuttable. Therefore, a court declaration of bad faith is not necessary for the annotation of the notice of levy on attachment. The fact that the notice was not annotated on the original title should not prejudice the petitioner, as compliance with legal requisites for attachment perfects the attachment and binds the land, with the subsequent annotation being a duty of the Register of Deeds. On the issue of whether a court order is necessary for annotation: The Court clarified that while the Administrator of the LRA did not err in referring the matter to the court, a court order is necessary in this specific instance. Section 71 of P.D. 1529 provides that if the duplicate certificate is not presented during involuntary registration, the Register of Deeds shall send notice to the owner, and if the owner neglects or refuses to comply, the Register of Deeds shall report the matter to the court, which may then enter an order for the owner to produce the certificate. Since respondent Santiago refused to surrender the owner's duplicate certificate, a court order is necessary to compel her to do so for the annotation of the attachment lien. The Court reiterated that the functions of the Register of Deeds are generally ministerial, but in cases of refusal by the owner to surrender the duplicate title, judicial intervention is required.
Main Doctrine
The entry of a notice of levy on attachment in the primary entry book of the Registry of Deeds constitutes sufficient notice to all persons, including third parties, that the land is subject to attachment, and this registration takes precedence over a subsequently registered deed of absolute sale, even if the deed is dated earlier. The act of registration is the operative act that conveys or affects the land concerning third persons, and constructive notice is created upon such registration.