G.R. No. 180615 ; June 27, 2012
NATIONAL HOUSING AUTHORITY, Petitioner, vs. JOSE R. EVANGELISTA, Respondent.

FACTS

The case involves a parcel of land originally owned by the National Housing Authority’s (NHA) predecessor. In 1968, Adela Salindon acquired it, but the Supreme Court in 1984 nullified that sale and declared NHA the owner. Despite this, the Quezon City Treasurer auctioned the land in 1986 for unpaid realty taxes by Salindon’s heirs, the Florendos. Luisito Sarte won the auction and obtained title. Sarte subdivided the lot, and in 1994, he transferred Lot 1-A to respondent Jose Evangelista via a Deed of Assignment. Evangelista was issued TCT No. 122944. Notably, no notice of lis pendens was annotated on Sarte’s title at the time of this transfer.
NHA had earlier filed an action for recovery of property (Civil Case No. Q-91-10071) against Sarte. The Regional Trial Court (RTC) ruled in NHA’s favor in 1995, declaring the auction sale and all subsequent transfers by Sarte null and void, and ordering the issuance of a new title for NHA. Evangelista, not being a party to that suit, later moved for the execution of a 1999 Court of Appeals decision which, in a related case, had declared the third paragraph of the RTC’s 1995 dispositive portion—which voided all transfers by Sarte—as inapplicable to his (Evangelista’s) title. The CA granted the motion, issuing a writ directing the annotation of this ruling on TCT No. 122944 and the cancellation of NHA’s adverse claim annotated thereon. NHA appealed.

ISSUE

Whether the Court of Appeals erred in granting the writ of execution to annotate its 1999 decision on Evangelista’s title and cancel NHA’s adverse claim.

RULING

The Supreme Court denied NHA’s petition and affirmed the CA’s resolutions. The core legal principle is that a person who deals with registered property is only charged with notice of the burdens and claims annotated on the title. Evangelista was an innocent purchaser for value. When he acquired the property from Sarte in 1994, the latter’s certificate of title (TCT No. 108070) contained no annotation of lis pendens for the recovery suit (Civil Case No. Q-91-10071) filed by NHA in 1991. The notice of lis pendens and NHA’s adverse claim were only annotated later on the new title (TCT No. 122944) issued to Evangelista.
Consequently, Evangelista’s rights were not bound by the judgment in the recovery suit to which he was not a party. The 1999 CA decision correctly recognized this, declaring the RTC’s blanket nullification of “any transfers” by Sarte as void and inapplicable to Evangelista’s title. Therefore, the CA properly ordered the execution of its final and executory 1999 decision to annotate this protection on Evangelista’s title and remove the adverse claim, which had lost its legal basis. The ruling upholds the Torrens system’s integrity, protecting innocent purchasers who rely on the clean face of a certificate of title.