G.R. No. L-4011; April 28, 1952
Jesus Garchitorena, et al., oppositors-appellants, vs. Director of Lands, et al., oppositors. Zuluaga and Erquiaqa, Inc., appellee.

FACTS

The appellants, Jesus Garchitorena et al., are the registered owners of six parcels of land covered by Original Certificate of Title No. 928. In a separate civil case (No. 6696), Zuluaga and Erquiaga, Inc. obtained a money judgment against the appellants. As plaintiffs in that case, Zuluaga and Erquiaga, Inc. caused a notice of lis pendens to be annotated on the back of the certificate of title, specifically for parcels Nos. 5 and 6. On November 7, 1946, the appellants filed a petition in the original land registration case (No. 59, G.L.R.O. Record No. 41882), alleging that the judgment in favor of Zuluaga and Erquiaga, Inc. had already been satisfied. They prayed, under Section 112 of Act No. 496 , for an order directing the Register of Deeds to cancel the notice of lis pendens. The Court of First Instance of Camarines Sur granted the petition in its order of December 4, 1946. On December 18, 1946, Zuluaga and Erquiaga, Inc., through counsel, filed a motion for reconsideration. They alleged that they were not furnished with a copy or notice of the appellants’ petition, in violation of Section 112 of Act No. 496 ; that the judgment had not been satisfied; and that the quitclaim presented by the appellants—signed by Attorney Andres Aguilar as counsel for Zuluaga and Erquiaga, Inc., and acknowledging receipt of P5,000 in satisfaction of the judgment—was signed by Attorney Aguilar without the authority, knowledge, or consent of the corporation. They prayed for the reconsideration and setting aside of the December 4, 1946 order. The clerk of court was commissioned to receive evidence. On December 10, 1948, the court issued an order dismissing the appellants’ petition for cancellation of the lis pendens notice, without prejudice to any party filing such action as they may deem necessary for the protection of their rights. The court reasoned that the parties had raised questions of fact and law which could not be decided collaterally in that proceeding, and that no notice was served on Zuluaga and Erquiaga, Inc., in violation of Section 112 of Act No. 496 .

ISSUE

Whether the petition for cancellation of the notice of lis pendens under Section 112 of Act No. 496 was the proper proceeding to resolve the substantial controversy regarding the satisfaction of the judgment and the authority to execute the quitclaim.

RULING

The Supreme Court affirmed the appealed order of the trial court. It concurred with the trial court’s opinion that the important issue raised—the alleged satisfaction of the judgment in Civil Case No. 6696—involves a substantial controversy between the parties that should be ventilated in an ordinary action, not collaterally in a proceeding under Section 112 of Act No. 496 . The Court cited the cases of Castillo et al. vs. Ramos et al. (45 Off. Gaz., 183) and Fidelity and Surety Company of the Philippines vs. Court of Appeals et al. (47 O.G. 4084) in support of this conclusion. Costs were imposed against the appellants.