GR 156076; (September, 2008) (Digest)
G.R. No. 156076 September 17, 2008
SPS. JESUS CHING AND LEE POE TIN, Petitioners, versus SPS. ADOLFO & ARSENIA ENRILE, Respondents.
FACTS
Petitioners Sps. Jesus Ching and Lee Poe Tin purchased a 370-square meter lot in Las Piñas from Raymunda La Fuente on September 5, 1985, evidenced by a notarized Deed of Absolute Sale. They took physical possession but did not register the sale with the Register of Deeds as required by Section 51 of P.D. 1529. Instead, on November 20, 1986, they executed and registered an Affidavit of Adverse Claim, which was annotated on the back of TCT No. 83618. On August 19, 1988, petitioners received a Notice of Levy on Attachment and Writ of Execution issued by the RTC of Pasig in favor of respondent spouses Adolfo and Arsenia Enrile in a case against La Fuente. These were recorded on the title, followed by a Certificate of Sale dated January 26, 1989, in favor of respondents. Petitioners filed an action to quiet title. The RTC ruled in their favor, upholding their superior right due to the prior registration of the adverse claim. The Court of Appeals reversed the RTC, ruling that the adverse claim had expired after 30 days per Section 70 of P.D. 1529 and that petitioners’ failure to register the deed of sale meant their interest was not binding on third persons like respondents, who were deemed purchasers in good faith.
ISSUE
Who among the parties has a preferential right over the disputed property?
RULING
The Supreme Court ruled in favor of petitioners, reversing the Court of Appeals and reinstating the RTC decision. The Court held that an annotated adverse claim remains valid even after the lapse of the 30-day period provided in Section 70 of P.D. 1529; it is not automatically cancelled but remains effective until a petition for its cancellation is filed in court. Therefore, petitioners’ adverse claim, registered on November 20, 1986, was a subsisting notice to the whole world, including respondents, at the time of the levy on attachment in 1988. The Court further ruled that respondents were not purchasers in good faith because the annotation of the adverse claim on the title constituted constructive notice of petitioners’ interest. Since petitioners were first in possession and their adverse claim was annotated prior to the levy, they had a superior right. The loss must fall on respondents, who were negligent in failing to investigate the property’s actual condition and occupants before the levy.