G.R. No. L-14324. April 12, 1961.
IN RE: PETITION FOR THE CANCELLATION OF AN ENCUMBRANCE. WILLIAM LI YAO, petitioner-appellee, vs. NARCISA B. DE LEON, et al., oppositors-appellants.

FACTS

The case involves a petition for the cancellation of an annotated encumbrance on Transfer Certificate of Title No. 46619, covering Lot No. 3 owned by petitioner William Li Yao. The encumbrance originated from a 1931 public instrument executed by the previous owner, Mariano Cu Unjieng, undertaking to open and maintain a private two-meter alley within Lot No. 3. This undertaking was a condition imposed by the City Engineer of Manila under Section 103 of the Revised City Ordinances for the issuance of a building permit to Smith Bell & Co., Ltd., then a lessee of the lot. The annotation was registered on the titles of several lots, including Lot No. 3 and adjacent lots now owned by the oppositors-appellants, the De Leon family.
The building constructed by Smith Bell & Co. was destroyed during the liberation of Manila. The lease in favor of Smith Bell & Co. had expired, and its annotation was cancelled. The City Engineer, upon Li Yao’s request, issued a certification stating that the obligation to maintain the alley was no longer necessary as the building that justified its creation was gone. Li Yao thus filed a petition under Section 112 of Act No. 496 (the Land Registration Act) for the cancellation of the encumbrance annotation. The De Leons opposed, arguing the alley benefited their adjacent properties and the obligation was perpetual.

ISSUE

Whether the annotated encumbrance, constituting a voluntary undertaking to maintain a private alley as a condition for a building permit, can be cancelled under Section 112 of the Land Registration Act after the building that justified its creation has been destroyed and the City Engineer has certified the obligation is no longer required.

RULING

Yes, the encumbrance can be cancelled. The Supreme Court affirmed the lower court’s order directing its cancellation. The legal logic is anchored on the nature and purpose of the original obligation. The undertaking to open and maintain the alley was not an easement or a servitude intended to perpetually benefit adjacent lands. It was a personal, voluntary obligation created solely as a condition precedent under a municipal ordinance (Section 103) for the issuance of a specific building permit. The clear proviso of the ordinance states such a private alley “shall never be closed… so long as there is a building or other structure abutting or facing upon such private street or alley.”
Consequently, the obligation was intrinsically linked to the existence of the building it was meant to serve. Once that building was destroyed and the lease terminated, the legal basis for the obligation ceased. The City Engineer’s certification confirming this was decisive. The annotation on the title was a mere memorial of this conditional obligation, not a vested property right for the benefit of the oppositors’ adjacent lots. The Court clarified that the oppositors’ proper remedy, if they sought to compel maintenance of the alley for access to their own properties (like the Dalisay Theater), was an ordinary civil action, not an opposition under the summary proceedings of Section 112 of the Land Registration Act. The petition for cancellation was properly granted as the encumbrance had lost its raison d’être.