G.R. No. L-20895 - IN RE: Hong Chiong Yu vs. Republic

Respondent Catalino M. Mangahis is the registered owner of a parcel of land in Barangay Malitlit, Sta. Rosa, Laguna, encompassing 28,889 square meters and covered by Transfer Certificate of Title (TCT) No. CLO-763.
The property’s registration details and subsequent annotations form the core of the dispute.

Catalino M. Mangahis authorized Venancio Zamora to sell the subject property.
Venancio Zamora, in turn, delegated his authority to Victor PeAa, who acted as the operative agent in negotiations and transactions.

On January 23, 2001, Victor PeAa executed a Memorandum of Agreement with Carmona Realty and Development Corporation, represented by petitioner Alicia P. Logarta, for the sale of a larger estate (the Malitlit Estate) that included the subject property.
The Malitlit Estate covered an area of 1,194,427 square meters, and the MOA stipulated that Carmona Realty was to deposit an escrow amount of ₱1,476,834,000.00 within thirty (30) days of the MOA’s execution.
The release of the escrow funds was conditioned upon the submission of various documents, such as an order of conversion from the Department of Agrarian Reform, an appropriate transfer of title (or Certificates of Land Ownership), and the execution of a release waiver or order of dismissal concerning pending cases related to the estate.
The MOA provided that should Carmona Realty fail to make the required escrow deposits or withdraw by reason of force majeure, the agreement would automatically become null and void.

Entry No. 626131 – Secretary’s Certificate.
Entry No. 626132 – Secondary supporting document.
Entry No. 626133 – Sworn Statement to Request Annotation executed by Alicia P. Logarta.
Entry No. 626134 – The executed Memorandum of Agreement ratified before a Notary Public.

These annotations were recorded to reflect the transaction and the conditions attached thereto.

On August 8, 2008, respondent Mangahis filed a petition seeking the cancellation of the subject entries on TCT No. CLO-763, arguing that the MOA was merely a private document lacking legal effect because the notarial acknowledgment was allegedly improper (the Notary Public was not commissioned in Manila in 2001).
The same petition also requested the revocation of Venancio Zamora’s authority to sell the property.
During the trial, respondent’s authorized representative (his brother, Emiliano M. Mangahis) contended that the annotations should be cancelled since the underlying purpose of the registrations was rendered moot by petitioner’s failure to enforce the MOA.

The Regional Trial Court (RTC) ruled in an Order dated June 27, 2011, granting respondent’s petition and directing the cancellation of the subject entries.

The RTC based its decision on Section 70 of Presidential Decree No. 1529 (Property Registration Decree), which permits registration of an adverse claim that is effective for thirty days.
The RTC further noted that the MOA had lost its force—rendered automatically null and void due to Carmona Realty’s failure to make the required escrow deposits.

Petitioner Logarta moved for reconsideration, arguing that the MOA did not constitute an adverse claim but was instead a voluntary dealing governed by Section 54 of PD 1529.
The RTC denied the motion for reconsideration by issuing an Amended Order on December 29, 2011, reiterating the directive to cancel the entries.
The Court of Appeals (CA) affirmed the RTC’s ruling in its Decision dated December 13, 2013, and denied petitioner’s subsequent motion for reconsideration in its Resolution dated June 27, 2014.

Whether the Court of Appeals and the RTC erred in ordering the cancellation of the subject entries on TCT No. CLO-763.
Whether the subject entries, which were registered in connection with the MOA, should be considered an adverse claim under Section 70 of PD 1529 or should be treated as a voluntary dealing (conditional sale) governed by Section 54 of PD 1529.