G.R. No. 254194 - Rosita vs. Zamora

On October 6, 1993, the heirs of Manuel Uy, represented by Belen Uy, sought the registration of a notice of lis pendens at the Register of Deeds (RD) of Lucena City.
The notice was intended to bind properties covered by several Transfer Certificate Titles (TCT Nos. T-72027 to T-72033) which were involved in an action for specific performance with damages to compel a sale.
After payment of the required fees, the notice was entered as Entry No. 56142 in Volume VI, page 241 of RD Lucena’s primary entry book.

Prior to the filing of the notice of lis pendens, Belen Uy had caused an annotation of an adverse claim on all affected titles through an entry made on August 16, 1993.
This adverse claim was later cancelled on October 4, 1994, following the submission of an affidavit by Bienaflor C. Umali.
Specifically for TCT No. T-72029 (subject land), the original was misplaced from the RD’s vault, and a clerk, Carmelina Rodriguez, inadvertently processed another transaction without duly annotating the existing notice of lis pendens.

In 1994, the Spouses Garana began inquiring about the land owned by Leovina Jalbuena, discovering from public records the prior adverse claim annotation.
Upon learning that the adverse annotation had been cancelled, they proceeded to purchase the subject land from Jalbuena on November 7, 1994.
Following the sale, RD Lucena cancelled TCT No. T-72029 and issued a new title, TCT No. T-77739, in the names of the Spouses Garana. The new title did not reflect the prior notice of lis pendens as the cancellation eliminated its visible effect on the title.

After the issuance of the new title, the Spouses Garana mortgaged the subject property to respondent Far East Bank and Trust Co. (later the Bank of the Philippine Islands, BPI).
The heirs of Manuel Uy, upon learning of the sale and the issuance of a clean title, notified RD Lucena of the omission and requested that the notice of lis pendens be annotated on the new title.

To remedy the oversight, RD Lucena, through its attorney (initially Atty. Marquez and later represented by petitioner Herminia Mendoza in her capacity as OIC of the Register of Deeds of Lucena City), filed a petition in trial court to annotate the notice on TCT No. T-77739.
The Spouses Garana and BPI opposed the petition arguing that the annotation was untimely and would prejudice their reliance on the clean title.
The trial court ruled in favor of the petition, ordering the annotation of the notice; however, the Court of Appeals reversed this decision based on the doctrine of indefeasibility under the Torrens System.

Respondents contended that the clean title should ensure their status as innocent purchasers for value as they were entitled to rely solely on the certificate issued by the RD.
The petitioner argued that the entry of the notice in the primary entry book constituted valid registration, binding all persons dealing with the subject land, regardless of its absence on the physical title.
It was further alleged that the Spouses Garana had actual knowledge of Belen Uy’s earlier annotation of an adverse claim on TCT No. T-72029 before acquiring the property.

Whether the entry of a notice of lis pendens in the RD’s primary entry book or day book constitutes sufficient and constructive notice to third persons, even in the absence of an annotation on the actual certificate of title.

Does the recording in the primary entry book provide adequate notice of a pending adverse claim over the property?

Whether the clean appearance of the certificate of title, obtained by the Spouses Garana and relied upon by BPI, eliminates or reduces their obligation to conduct further due diligence regarding existing adverse claims.

Can the doctrine of indefeasibility protect innocent purchasers when a prior notice exists in official records?

Whether the actions and knowledge of the Spouses Garana (and by extension BPI) negate their claim of being innocent purchasers for value.

To what extent should the parties’ awareness of earlier adverse annotations and the irregularities in registration affect the application of the Torrens System’s protections?