SECOND DIVISION [G. R. No. 102377.

July 5, 1996]
ALFREDO SAJONAS and CONCHITA SAJONAS, petitioners, vs. THE COURT OF APPEALS, DOMINGO
A. PILARES, SHERIFF ROBERTO GARCIA OF QUEZON CITY and REGISTER OF DEEDS OF
MARIKINA, respondents.

Theme: Notice of Adverse Claims vs. Notice of Levy on Execution

Facts:
The inscription of a Notice of Levy on Execution was caused to be made by the private respondent
(Pilares) on Transfer Certificate of Title No. N-79073 of the Register of Deeds of Marikina, issued in the name of
the spouses Ernesto B. Uychocde and Lucita Jarin, and was later carried over to and annotated on Transfer
Certificate of Title No. N-109417 of the same registry, issued in the name of the spouses Alfredo Sajonas and
Conchita R. Sajonas, who purchased the parcel of land from the Uychocdes, and are now the petitioners in this case.
On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a parcel of
residential land located in Antipolo, Rizal to the spouses Alfredo Sajonas and Conchita R. Sajonas on installment
basis as evidenced by a Contract to Sell. The property was registered in the names of the Uychocde spouses under
TCT No. N-79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984, the Sajonas couple caused the
annotation of an adverse claim based on the said Contract to Sell on the title of the subject property, which was
inscribed as Entry No. 116017. Upon full payment of the purchase price, the Uychocdes executed a Deed of Sale
involving the property in question in favor of the Sajonas couple on September 4, 1984. The deed of absolute sale
was registered almost a year after, or on August 28, 1985.
Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No. Q-28850 for
collection of sum of money against Ernesto Uychocde. On June 25, 1980, a Compromise Agreement was entered
into by the parties in the said case under which Ernesto Uychocde acknowledged his monetary obligation to
Domingo Pilares amounting to P27,800 and agreed to pay the same in two years from June 25, 1980. When
Uychocde failed to comply with his undertaking in the compromise agreement, defendant-appellant Pilares moved
for the issuance of a writ of execution to enforce the decision based on the compromise agreement, which the court
granted in its order dated August 3, 1982. Accordingly, a writ of execution was issued on August 12, 1982 by the
CFI of Quezon City where the civil case was pending. Pursuant to the order of execution dated August 3, 1982, a
notice of levy on execution was issued on February 12, 1985. On February 12, 1985, defendant sheriff Roberto
Garcia of Quezon City presented said notice of levy on execution before the Register of Deeds of Marikina and the
same was annotated at the back of TCT No. 79073 as Entry No. 123283.
On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of levy on execution
upon defendant-appellant Pilares, through a letter to their lawyer, Atty. Melchor Flores. Despite said demand,
defendant-appellant Pilares refused to cause the cancellation of said annotation.
Thereafter, the Sajonases filed their complaint in the Regional Trial Court of Rizal, Branch 71, against
Domingo Pilares, the judgment creditor of the Uychocdes.
RTC Ruling:
That at the time the notice of levy was annotated by the defendant, the Uychocde spouses, debtors of the
defendant, have already transferred, conveyed and assigned all their title, rights and interests to the plaintiffs and
there was no more title, rights or interests therein which the defendant could levy upon;

That the annotation of the levy on execution which was carried over to the title of said plaintiffs is illegal
and invalid and was made in utter bad faith, in view of the existence of the Adverse Claim annotated by the plaintiffs
on the corresponding title of the Uychocde spouses.
Dissatisfied, Pilares appealed to the Court of Appeals, assigning errors on the part of the lower court. The
appellate court reversed the lower courts decision, and upheld the annotation of the levy on execution on the
certificate of title.
Hence, the present petition.
Issues:
1.

2.

Was the adverse claim inscribed in the Transfer Certificate of Title No. N-109417 still in force when private
respondent (Pilares) caused the notice of levy on execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed since it was annotated? (Addressing this issue is
essential in determining who has a better right over the property: Sajonas or Pilares)
Whether or not the petitioners (Sajonas spouses) are buyers in good faith of the subject property?

Held:
1.

Yes, the adverse claim was still in force when private respondent (Pilares) caused the notice of levy on
execution to be registered and annotated in the said title, irrespective of the lapse of thirty days as
mandated under Section 70 of P.D. No. 1529.
Sec. 70 (P.D. 1529) Adverse Claim- Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of the original registration, may,
if no other provision is made in this decree for registering the same, make a statement in
writing setting forth fully his alleged right or interest, and how or under whom acquired, a
reference to the number of certificate of title of the registered owner, the name of the registered
owner, and a description of the land in which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the adverse claimants residence,
and a place at which all notices may be served upon him. This statement shall be entitled to
registration as an adverse claim on the certificate of title. The adverse claim shall be effective
for a period of thirty days from the date of registration. After the lapse of said period, the
annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the
party in interest: Provided, however, that after cancellation, no second adverse claim based on
the same ground shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of
First Instance where the land is situated for the cancellation of the adverse claim, and the court
shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall
render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid,
the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and
hearing shall find that the adverse claim thus registered was frivolous, it may fine the claimant
in an amount not less than one thousand pesos, nor more than five thousand pesos, in its
discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by
filing with the Register of Deeds a sworn petition to that effect. (Italics ours)

In construing the law aforesaid, care should be taken that every part thereof be given effect and a
construction that could render a provision inoperative should be avoided, and inconsistent provisions should be
reconciled whenever possible as parts of a harmonious whole.
In ascertaining the period of effectivity of an inscription of adverse claim, we must read the law in its
entirety. Sentence three, paragraph two of Section 70 of P.D. 1529 provides:
The adverse claim shall be effective for a period of thirty days from the date of registration.
At first blush, the provision in question would seem to restrict the effectivity of the adverse claim to thirty
days. But the above provision cannot and should not be treated separately, but should be read in relation to the
sentence following, which reads:
After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition
therefor by the party in interest.
If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the lapse of thirty
days, then it would not have been necessary to include the foregoing caveat to clarify and complete the rule. For
then, no adverse claim need be cancelled. If it has been automatically terminated by mere lapse of time, the law
would not have required the party in interest to do a useless act.
Construing the provision as a whole would reconcile the apparent inconsistency between the portions of the
law such that the provision on cancellation of adverse claim by verified petition would serve to qualify the provision
on the effectivity period. The law, taken together, simply means that the cancellation of the adverse claim is
still necessary to render it ineffective, otherwise, the inscription will remain annotated and shall continue as a
lien upon the property. For if the adverse claim has already ceased to be effective upon the lapse of said
period, its cancellation is no longer necessary and the process of cancellation would be a useless ceremony.
It should be noted that the law employs the phrase may be cancelled, which obviously indicates, as inherent in
its decision making power, that the court may or may not order the cancellation of an adverse claim, notwithstanding
such provision limiting the effectivity of an adverse claim for thirty days from the date of registration. The court
cannot be bound by such period as it would be inconsistent with the very authority vested in it. A fortiori, the
limitation on the period of effectivity is immaterial in determining the validity or invalidity of an adverse claim
which is the principal issue to be decided in the court hearing. It will therefore depend upon the evidence at a proper
hearing for the court to determine whether it will order the cancellation of the adverse claim or not.
To interpret the effectivity period of the adverse claim as absolute and without qualification limited to thirty
days defeats the very purpose for which the statute provides for the remedy of an inscription of adverse claim, as the
annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real property
where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496
(now P.D. 1529 or the Property Registration Decree), and serves as a warning to third parties dealing with said
property that someone is claiming an interest or the same or a better right than the registered owner thereof.
The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is
to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed
interest can be established or revoked, all for the purpose of determining at last the existence of any encumbrance on
the title arising from such adverse claim. This is in line with the provision immediately following:
Provided, however, that after cancellation, no second adverse claim shall be registered by the same claimant.
Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will be precluded
from registering a second adverse claim based on the same ground.
In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title No. N-79073 was still in
effect on February 12, 1985 when Quezon City Sheriff Roberto Garcia annotated the notice of levy on execution

thereto. Consequently, he is charged with knowledge that the property sought to be levied upon on execution was
encumbered by an interest the same as or better than that of the registered owner thereof . Such notice of levy
cannot prevail over the existing adverse claim inscribed on the certificate of title in favor of the petitioners .
This can be deduced from the pertinent provision of the Rules of Court, to wit:
Section 16. Effect of levy on execution as to third persons- The levy on execution shall create a lien in favor of the
judgment creditor over the right, title and interest of the judgment debtor in such property at the time of the
levy, subject to liens or encumbrances then existing. (Italics supplied)
To hold otherwise would be to deprive petitioners of their property, who waited a long time to complete
payments on their property, convinced that their interest was amply protected by the inscribed adverse claim.
2.

As to whether or not the petitioners are buyers in good faith of the subject property, the same should be
made to rest on the findings of the trial court. As pointedly observed by the appellate court, there is no
question that plaintiffs-appellees were not aware of the pending case filed by Pilares against Uychocde at
the time of the sale of the property by the latter in their favor. This was clearly elicited from the testimony
of Conchita Sajonas, wife of plaintiff, during cross-examination on April 21, 1988.

A purchaser in good faith and for value is one who buys property of another without notice that some other
person has a right to or interest in such property and pays a full and fair price for the same, at the time of such
purchase, or before he has notice of the claims or interest of some other person in the property. Good faith consists
in an honest intention to abstain from taking any unconscientious advantage of another. Thus, the claim of the
private respondent that the sale executed by the spouses was made in fraud of creditors has no basis in fact, there
being no evidence that the petitioners had any knowledge or notice of the debt of the Uychocdes in favor of
the private respondents, nor of any claim by the latter over the Uychocdes properties or that the same was
involved in any litigation between said spouses and the private respondent. While it may be stated that good
faith is presumed, conversely, bad faith must be established by competent proof by the party alleging the
same. Sans such proof, the petitioners are deemed to be purchasers in good faith, and their interest in the subject
property must not be disturbed.
ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated October 17, 1991 is hereby
REVERSED and SET ASIDE. The decision of the Regional Trial Court dated February 15, 1989 finding for the
cancellation of the notice of levy on execution from Transfer Certificate of Title No. N-109417 is hereby
REINSTATED.