G.R. No. 37854 ; November 17, 1933
ALEIDA SAAVEDRA, ET AL., plaintiffs-appellants, vs. RAFAEL MARTINEZ, ET AL., defendants-appellees.

FACTS

Aleida Saavedra and her minor children sued to annul deeds of sale and mortgages executed by her husband, Ceferino Ibañez, over conjugal property (Hacienda de Burabod). The spouses were separated, and Aleida had obtained a judgment for support against Ceferino. A notice of lis pendens was annotated on the property’s title. During the appeal of the support case, Ceferino sold the hacienda to Rafael Martinez for P45,000, representing that the support judgment had been satisfied, which was false. The register of deeds cancelled the lis pendens annotation. Martinez then mortgaged the property to W.S. Price. Aleida sought to annul these transactions and recover damages.

ISSUE

(1) Whether the sale by Ceferino Ibañez to Rafael Martinez and the subsequent mortgage to W.S. Price are valid; and (2) Whether the cancellation of the lis pendens was proper.

RULING

(1) The sale to Martinez is rescinded. Martinez was in bad faith because he failed to verify Ceferino’s false claim that the support judgment was satisfied. He should have required official proof. However, the mortgage to Price is upheld. Price was a mortgagee in good faith as he relied on the clean title after the lis pendens was cancelled and had no notice of the unsatisfied judgment.
(2) The cancellation of the lis pendens by the register of deeds was improper, as the support action was indeed an action affecting title to property, entitling Aleida to such annotation. However, the register of deeds acted in good faith based on his interpretation.
The Court modified the trial court’s judgment: the sale is annulled; the title is ordered reinstated in the names of the spouses, with annotations of Price’s mortgage and the support judgment; and damages are denied. Costs are imposed on Ceferino Ibañez and Rafael Martinez.

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