G.R. No. 34845; March 3, 1932
ANASTACIO PINEDA, plaintiff-appellee, vs. MARGARITA SANTOS, in her own behalf and as judicial administratrix of the intestate estate of Natalio Santos, defendant-appellant.

FACTS

The plaintiff, Anastacio Pineda, entered into a contract to purchase a parcel of registered land from the defendant, Margarita Santos, as administratrix of an estate. The deed of sale, executed on July 30, 1925, contained the defendant’s warranty that the property was “free of all charge, lien, and liability.” At the time of the sale, the Transfer Certificate of Title (TCT) presented showed no encumbrances. However, when the plaintiff’s lawyer presented the deed and TCT to the Register of Deeds for registration, he discovered that a lis pendens notice (relating to a prior litigation over the land) had been annotated on the TCT, backdated to April 25, 1925. The Register of Deeds admitted the annotation was made many days after that date. Upon discovering this encumbrance, a subsequent buyer from Pineda rescinded its purchase. Pineda then sought to annul his contract with Santos.

ISSUE

Whether the contract of sale may be annulled due to the defendant’s false warranty that the property was free from liens, which vitiated the plaintiff’s consent.

RULING

Yes, the contract is annulled. The Supreme Court affirmed the trial court’s judgment. The evidence established that the lis pendens annotation was made on the TCT after the execution of the deed of sale. The defendant’s express warranty in the deed that the property was free of liens was therefore false. This constituted a fraud that misled the plaintiff and vitiated his consent to the contract. A notice of lis pendens constitutes a legal lien under the Land Registration Act (Act No. 496), and its existence materially affects the property’s title. The plaintiff is entitled to recover the purchase price paid, with interest, and the proven damages incurred.

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