G.R. No. 104769 & G.R. No. 135016; March 3, 2000
AFP MUTUAL BENEFIT ASSOCIATION, INC., petitioner, vs. COURT OF APPEALS, SOLID HOMES, INC., INVESTCO, INC., and REGISTER OF DEEDS OF MARIKINA, respondents. x – – – – – – – – – – – – – – – – – – – – – – – x SOLID HOMES, INC., petitioner, vs. INVESTCO, INC., substituted by AFP MUTUAL BENEFIT ASSOCIATION, INC., respondent.

FACTS

Investco, Inc. agreed to sell six parcels of land to Solid Homes, Inc. in 1976 for over P10 million, payable in installments. The contract stipulated that failure to pay an installment after a grace period would make the entire balance immediately due. Solid Homes paid a substantial portion but defaulted after February 1981, leaving a balance. Investco filed an action for specific performance and damages in March 1981. While that case was pending, Solid Homes filed a notice of lis pendens with the Register of Deeds of Marikina in September 1984, which was entered in the primary book but not annotated on the titles. In April 1984, Investco sold the same properties to AFP Mutual Benefit Association, Inc. (AFP MBAI). The trial court ruled in favor of Investco in 1985, a decision ultimately affirmed by the Supreme Court. AFP MBAI then sought to register the 1984 deed of sale and cancel the unannotated lis pendens, which the Register of Deeds refused. AFP MBAI filed a petition for mandamus to compel registration.

ISSUE

The primary issue is whether a notice of lis pendens that was entered in the primary entry book but not annotated on the certificate of title is effective to bind a subsequent purchaser, and whether mandamus lies to compel the Register of Deeds to register a deed of sale and cancel such an unannotated notice.

RULING

The Supreme Court ruled in favor of AFP MBAI. The legal logic is anchored on the nature and purpose of registration under the Torrens system. A notice of lis pendens serves as a warning to prospective purchasers of a pending litigation affecting the property. For it to be effective and binding upon third parties, it must be duly registered or annotated on the certificate of title itself. Mere entry in the primary entry book, without actual annotation on the title, does not constitute registration that binds the world. The Court emphasized that registration is the operative act that conveys and affects registered land. Since the lis pendens was not annotated, AFP MBAI, as a subsequent purchaser, was not charged with constructive notice of the pending suit filed by Solid Homes. Therefore, AFP MBAI acquired valid title. Consequently, the Register of Deeds has a ministerial duty to register the deed of sale in favor of AFP MBAI and cancel the ineffective lis pendens entry. Mandamus is the proper remedy to compel the performance of this clear legal duty, as the refusal to register was based on an erroneous interpretation of law regarding the efficacy of an unannotated notice. The Court affirmed the decisions of the Court of Appeals which upheld AFP MBAI’s rights and directed the registration of the deed.