Mendoza v. Garana
REITERATIONFacts
The Antecedents: The heirs of Manuel Uy Ek Liong sought to register a notice of lis pendens concerning properties covered by several Transfer Certificates of Title (TCTs), including TCT No. T-72029, which was registered under Leovina Jalbuena. The notice of lis pendens was entered in the primary entry book of the Register of Deeds of Lucena City (RD Lucena) as Entry No. 56142. However, due to the original TCT No. T-72029 being missing from the vault and Jalbuena's failure to surrender her owner's duplicate copy, the annotation was not made on the title itself. Prior to this, an adverse claim by Belen Uy on TCT No. T-72029, annotated on August 16, 1993, was cancelled on October 4, 1994, by Bienaflor C. Umali. Sometime in 1994, Spouses Armando and Angela Garana, after learning of the cancellation of the adverse claim, purchased the land from Jalbuena on November 7, 1994. Consequently, TCT No. T-72029 was cancelled, and a new title, TCT No. T-77739, was issued in the names of the Spouses Garana. This new title did not reflect the notice of lis pendens. Subsequently, the Spouses Garana mortgaged the property to Far East Bank & Trust Company (now BPI). Procedural History: The heirs of Manuel Uy learned of the sale and the absence of their notice of lis pendens on the new title. RD Lucena, through its OIC Herminia L. Mendoza (petitioner), filed a petition with the Regional Trial Court (RTC) of Lucena City to allow the annotation of the notice of lis pendens on TCT No. T-77739. The Spouses Garana and BPI opposed, arguing that the annotation was late and would prejudice them, and that they were innocent purchasers for value and mortgagee, respectively, relying on a clean title. The RTC ordered the annotation, but the Court of Appeals (CA) reversed this, ruling that the Spouses Garana were innocent purchasers for value who relied on the clean title and that the entry in the primary entry book did not serve as notice to third persons under the Torrens System. The Petition: Petitioner Mendoza, representing RD Lucena, filed a petition for review on certiorari, arguing that the entry of the notice of lis pendens in the primary entry book constituted valid registration and notice to all persons, and that the Spouses Garana were not innocent purchasers for value because they were aware of the prior adverse claim.
Issue(s)
Whether the entry of a notice of lis pendens in the primary entry book or day book of the Register of Deeds serves as notice to third persons of the existence of such claim against registered land, even in the absence of annotation on the title. Whether the Spouses Garana were innocent purchasers for value, considering their knowledge of a prior adverse claim on the property.
Ruling
The Court GRANTED the petition, REVERSED the Court of Appeals' decision and resolution, and ordered the Register of Deeds of Lucena City to annotate the notice of lis pendens on Transfer Certificate Title No. T-77739.
Ratio Decidendi
On the issue of notice through entry in the primary entry book: The Court reiterated its long-standing pronouncements in Villasor v. Camon and Levin v. Bass, which remain valid under PD No. 1529. For involuntary instruments like a notice of lis pendens, the law does not require presentation or annotation on the owner's duplicate title or even on the original title. The mere recording of such an instrument in the primary entry book or day book is sufficient to bind the registered land and affect third persons dealing with it. Section 56 of Act No. 496 (now Section 56 of PD No. 1529) clearly states that instruments are regarded as registered from the time they are noted in the entry book, and this registration constitutes notice to all persons from the date of entry or notation. The duty to annotate rests with the Register of Deeds, not with the registrant, who has a right to presume that the official will perform their duty properly after paying the required fees. Therefore, the entry of the notice of lis pendens in RD Lucena's primary entry book constituted valid registration and notice to all persons, including the Spouses Garana and BPI. On whether the Spouses Garana were innocent purchasers for value: The Court found that the Spouses Garana did not act in good faith. They were aware of the adverse claim annotated by Belen Uy on TCT No. T-72029 on August 16, 1993. Although this adverse claim was cancelled on October 4, 1994, by Bienaflor C. Umali, the Spouses Garana purchased the property on November 7, 1994, shortly after the cancellation. The fact that a different person cancelled the adverse claim should have aroused their suspicion and prompted them to investigate further, as held in Casimiro Development Corporation v. Mateo. Their failure to inquire beyond the certificate of title, especially given the circumstances surrounding the cancellation of the adverse claim, negated their claim of being innocent purchasers for value. Similarly, BPI, as a banking institution, was expected to exercise a higher degree of diligence and should have noticed the irregularity in the cancellation of the adverse claim.
Main Doctrine
The entry of an involuntary instrument, such as a notice of lis pendens, in the primary entry book or day book of the Register of Deeds constitutes sufficient notice to all persons from the time of such entry, even in the absence of annotation on the certificate of title. The duty to annotate rests with the Register of Deeds, not with the registrant.