GR L 13389 90; (September, 1960) (Digest)
G.R. Nos. L-13389-90; September 30, 1960
Capitol Subdivision, Inc., and Montelibano Subdivisions, movants-appellees, vs. Alfredo Lopez Montelibano and Concepcion Montelibano Hojilla, oppositors-appellants.
FACTS
Two consolidated appeals arose from orders of the Court of First Instance of Occidental Negros, acting as a land registration court, in Cadastral Case No. 9. In G.R. No. L-13389, movants-appellees Capitol Subdivision, Inc. and Montelibano Subdivisions filed a motion to cancel a notice of lis pendens annotated on Transfer Certificate of Title (TCT) No. T-5979, covering Lot No. 21. They alleged that the registered owners, Alfredo Montelibano and Alejandro M. Montelibano, had sold the lot to Corazon J. Lacson on September 24, 1954, with full payment made on that date. The deed of sale was registered only on May 9, 1957, after the oppositors-appellants (Alfredo L. Montelibano and Concepcion Montelibano Hojilla) had caused the annotation of the notice of lis pendens on March 12, 1957, in relation to a civil case they filed against Alfredo Montelibano. The trial court granted the motion to cancel. In G.R. No. L-13390, a similar motion was filed regarding Lot No. 28 covered by TCT No. T-5986, which was sold to Marcelino Lalantakan on June 29, 1936. This deed of sale was never registered. A notice of lis pendens was also annotated on March 12, 1957, for a related civil case. The trial court also granted the motion to cancel. The oppositors-appellants appealed both orders.
ISSUE
Whether the trial court correctly ordered the cancellation of the notices of lis pendens annotated on the certificates of title, based on the claim that the vendees were innocent purchasers who acquired the lots prior to the annotation.
RULING
No. The Supreme Court reversed the appealed orders. The Court held that under the Torrens System (Act No. 496), the act of registration is the operative act to convey and affect the land. While an unrecorded sale is binding between the parties, it does not affect third parties. The lots, therefore, legally remained the property of the registered owners (Alfredo Montelibano and Alejandro M. Montelibano) at the time the notices of lis pendens were annotated. Consequently, the notices rightfully affected the titles. The rights of the unregistered vendees (Lacson and Lalantakan) were subordinate to any right that might be established by the plaintiffs (the oppositors-appellants) in the pending civil cases. If the plaintiffs prevail in their suits, the unrecorded rights of the vendees would be subject to the judgment. If the plaintiffs lose, the notices of lis pendens would lose their effect ipso facto. The motions for cancellation were thus improperly granted.