G.R. No. 251233. March 29, 2023
ROSITA U. ALBERTO, PETITIONER, VS. HEIRS OF JUAN A. PANTI, REPRESENTED BY JUANCHO B. PANTI, RESPONDENTS.

FACTS

The Heirs of Juan A. Panti filed a Petition for Cancellation of Affidavit of Adverse Claim against Rosita U. Alberto and the Register of Deeds of Catanduanes. The Heirs are the registered owners of a parcel of land covered by Original Certificate of Title (OCT) No. 157. They sought the cancellation of an adverse claim annotated by Alberto on the title, arguing it was bereft of legal basis. Alberto opposed, asserting her family purchased the property from the Heirs in 1966, as evidenced by partial payment receipts. She claimed the Heirs held the title in trust for her family, who had been in open, peaceful possession and paying taxes for over 40 years. The Heirs countered that no deed of sale existed, the receipts only showed partial payment, and the sale, if any, violated the five-year prohibition against encumbrance for a free patent title issued in 1965.
The Regional Trial Court (RTC) initially denied the petition to cancel, finding the adverse claim proper. The Court of Appeals (CA) remanded for trial. After trial, the RTC again denied the cancellation, upholding Alberto’s claim. The Heirs appealed to the CA.

ISSUE

Whether the Court of Appeals correctly ordered the cancellation of the adverse claim annotated on OCT No. 157.

RULING

Yes, the Supreme Court affirmed the CA’s decision ordering the cancellation. The Court held that an adverse claim is a provisional remedy to protect an interest in registered land that is not otherwise registrable. For an adverse claim to subsist, the claimant’s interest must be one that is registrable under the Property Registration Decree. Alberto’s claim was based on an alleged sale evidenced only by partial payment receipts from 1966. The Court found this transaction constituted, at best, a contract to sell, where ownership is retained by the vendor until full payment of the purchase price. Since Alberto failed to prove full payment, the suspensive condition was not fulfilled, and no ownership or registrable interest passed to her.
Furthermore, the Court ruled that Alberto’s claim of an implied trust was unavailing. An implied trust must be proven by clear and convincing evidence. Alberto’s possession and tax payments, while indicative of a claim, were insufficient to conclusively establish a trust relationship, especially against the Heirs’ registered title. The adverse claim, therefore, annotated an interest that was not legally registrable as it was contingent upon a condition that remained unfulfilled. Consequently, the CA correctly cancelled the annotation for lack of a valid legal basis, as the purpose of an adverse claim is to protect a right in esse (in existence), not a contingent or inchoate right. The cancellation does not preclude Alberto from pursuing other legal remedies to assert her claim, but it properly removes the cloud on the Heirs’ Torrens title.