G.R. No. 109078 December 26, 1995
Wilson Yu, petitioner, vs. Court of Appeals, Rosario T. Alzul, and The Register of Deeds for Metro Manila, District III, respondents.

FACTS

Rosario Alzul purchased four subdivision lots from B.E. San Diego, Inc. under a Contract to Sell. She later conditionally assigned her rights to Wilson Yu. When Yu allegedly defaulted, Alzul sued for rescission of the assignment. During this suit’s pendency, Alzul caused the annotation of a Notice of Lis Pendens on the original certificate of title on file with the Register of Deeds. The rescission case was ultimately decided in Alzul’s favor, with the Supreme Court dismissing Yu’s petition in 1989.
While the rescission case was pending, B.E. San Diego, Inc. rescinded its Contract to Sell with Yu and subsequently sold the same lots to spouses Carlos and Sandra Ventura. The Ventura spouses, upon receiving their titles, discovered the lis pendens annotation. They then filed an action to quiet title, seeking cancellation of the annotation. The trial court ruled for the Venturas, but the Court of Appeals reversed, declaring their titles null and void and reinstating the title in the name of the developer with the lis pendens annotation. Wilson Yu, despite the final rescission of his rights, filed this petition to affirm the trial court’s decision favoring the Venturas.

ISSUE

Whether the Notice of Lis Pendens annotated only on the original certificate of title at the Register of Deeds, and not on the owner’s duplicate copy, is valid and binding upon subsequent purchasers.

RULING

The Supreme Court denied the petition, upholding the Court of Appeals. The annotation of a Notice of Lis Pendens on the original copy of the certificate of title on file with the Register of Deeds is sufficient to constitute constructive notice to the whole world. It is not required to be inscribed on the owner’s duplicate copy, as that copy is often in the possession of an adverse party or a stranger to the litigation. The entry in the Register’s day book for such involuntary transactions is itself sufficient notice.
Consequently, the Ventura spouses, as subsequent transferees pendente lite, are bound by the outcome of the prior litigation. A purchaser dealing with property subject to a lis pendens cannot be considered in good faith and acquires no better right than the predecessor. They are charged with the duty to examine the original title on file, not merely the owner’s duplicate copy. B.E. San Diego, Inc., though not a formal party to the rescission suit, was also bound by the notice due to its constructive and actual knowledge of the dispute. Therefore, the sale to the Venturas was subject to the results of the pending case, rendering their titles void.