GR L 1507; (October, 1949) (Digest)
G.R. No. L-1507; October 31, 1949
HOSPITAL SAN JUAN DE DIOS, applicant; THE REPUBLIC OF THE PHILIPPINES, petitioner-appellee, vs. HOSPITAL SAN JUAN DE DIOS and ERNEST H. BURT, oppositors-appellants.
FACTS
On March 4, 1939, the Commonwealth of the Philippines (predecessor of the Republic) entered into a contract of lease with an option to purchase with Hospital San Juan de Dios over three parcels of land in Bulacan. The contract was presented for registration on March 15, 1939, and noted in the entry book of the Register of Deeds, but the Register failed to annotate it on the original certificates of title (Nos. 428 and 494) due to non-payment of a filing fee. On June 29, 1946, the Hospital sold the same lands to Ernest H. Burt. The deed of sale referenced the earlier lease contract with the Commonwealth. Transfer certificates of title were issued to Burt without annotation of the lease contract. The Republic, upon discovering the omission, filed a petition under Section 112 of the Land Registration Act (Act No. 496) to have its rights under the lease contract recognized as prior and preferred over Burt’s claims.
ISSUE
Whether the rights of the Republic under the contract of lease with an option to purchase enjoy priority over the rights of Ernest H. Burt as registered owner of the lands, despite the lack of annotation on the certificates of title.
RULING
Yes. The Supreme Court affirmed the lower court’s order, holding that the Republic’s rights are preferred. The Register of Deeds erred in requiring advance payment of the filing fee from the government, as the last proviso of Section 56 of Act No. 496, as amended, expressly exempts the Insular (and thus the Commonwealth/Republic) and local governments from such advance payment. The registration in the entry book was valid, and the Register had a duty to annotate the contract on the certificates of title. The Republic properly sought relief under Section 112 of the Land Registration Act to correct the error or omission. Burt, as buyer, was charged with notice of the lease contract because it was referenced in his deed of sale, and he could not claim to be a purchaser in good faith without notice. The Hospital’s unilateral claim of resolution of the contract due to alleged breaches was invalid, as resolution of a bilateral contract requires judicial action. The order directing Burt to surrender the duplicate certificates and annotate the Republic’s preferred right was affirmed.
AI Generated by Armztrong.