G.R. No. 48173 - Mendoza vs. Rosel

Genaro F. Mendoza and Anunciacion E. de Mendoza (now deceased) are the petitioners in the case.
The respondents, Epifania Rosel and Paulino Nator, initiated the suit in the Court of First Instance of Cebu seeking an injunction.
The injunction was requested to prevent the petitioners from closing an easement of right-of-way appurtenant to the respondents’ lots.

The property in dispute is part of a larger parcel of city land originally owned by the heirs of Pedro Rodriguez.
This larger parcel was subdivided into smaller lots, which were sold to various persons, including the respondents.
During subdivision, an alley three meters wide was opened across the large parcel, effectively dividing it into two equal areas.
The alley serves as the only means of access from the lots on the western half (to which the respondents’ lots belong) to General Junquera Street, the sole street available.

When the title to the subdivided lots was confirmed in favor of the heirs of Pedro Rodriguez, the court recognized the alley by treating it as two separate lots:

Certificates of title were accordingly issued for these two lots reflecting the existence of the alley.
Although the petitioners’ transfer certificates of title did not expressly mention any lien, encumbrance, or easement, they acquired the lots subject to the pre-existing alley right-of-way.

It was found by the Court of Appeals that when the respondents acquired the two lots forming the alley, they were aware that these lots were to serve exclusively as an alley (easement of right-of-way).
Petitioners, by acquiring the lots, were or should have been aware of the functional use of the alley, which is a matter of actual notice.
The established juridical principle in the case is that actual notice or knowledge is binding on the parties, even if such easements are not indicated in the title documents.

Petitioners claimed that, being purchasers in good faith and for value, they have the right to demand payment from the respondents for the use of the alley.
The matter of whether the petitioners were entitled to indemnity from the Visayan Surety and Insurance Corporation, from which they acquired the lots constituting the alley, was not resolved in this case and was left for a separate suit.

Whether the petitioners, despite their transfer certificates of title not reflecting any easement or encumbrance, can assert that they are purchasers in good faith entitled to payment for the use of the alley.
Whether the principle that actual notice (or actual knowledge) of an easement is as binding as a registered notice should prevent the petitioners from asserting any contrary claim regarding the alley.
Whether the successive transfers of the alley from the heirs of Pedro Rodriguez to the petitioners can override the established easement and the corresponding rights of the respondents.
The unresolved issue of whether petitioners are entitled to indemnity against the Visayan Surety and Insurance Corporation, a question that is left for further litigation.