G.R. No. L-11271 - Paz Ty Sin Tei vs. Lee Dy Piao

Dy Lac, a Chinese national, was the absolute and registered owner of several real properties in Manila since before the effectivity of the Philippine Constitution.
After the death of his first wife in China in 1907, Dy Lac remarried Ong Tiem alias Uy Cho in 1920 and brought her along with her maid-servant, Gue Kuy alias Paz Ty Sin Tei, to the Philippines.

On June 28, 1938, Dy Lac executed a deed of donation in favor of Paz Ty Sin Tei, donating two parcels of land (Lots 8 and 22, Block 2127) located at Ronquillo Street and Rizal Avenue, Manila.

The donation included all improvements on the lots, covering an area of 655.70 square meters.
The original Transfer Certificates of Title (T.C.T. Nos. 50071 and 50074) in Dy Lac’s name were cancelled, and new titles (T.C.T. Nos. 53825 and 53826) were issued in the name of Paz Ty Sin Tei, who was then recorded as single and Chinese.

Simultaneously, Dy Lac executed another deed of donation in favor of Tomas Dy Suan Choan, the minor illegitimate son of Paz Ty Sin Tei.

This donation involved a parcel of land located at Magallanes and Anda streets, Intramuros, Manila.
The original title (T.C.T. No. 50072) was cancelled and reissued as T.C.T. No. 53925 in the minor’s name.
Shortly after, the minor died, and the property passed to his mother, Paz Ty Sin Tei, who then secured a corresponding title (T.C.T. No. 56580).

Two parcels of land at Ronquillo St. and Rizal Avenue (P44,839.00 valuation).
One parcel of land at Anda and Magallanes Sts. in Intramuros (P22,356.00 valuation).
Shares in Mariano Uy Chaco Sons & Co., Inc. (P10,000.00 par value).
Cash amounting to P28,000.00 (total estate valued at P105,195.00).

The P28,000.00 was later used to purchase houses and a lot at Zurbaran St., Manila, with the title (T.C.T. No. 58652) eventually placed in Paz Ty Sin Tei’s name.

Dy Lac died on May 14, 1948, leaving behind his second wife, Uy Cho, and his son from the first marriage, Jose Lee Dy Piao.
In his will, Dy Lac named Paz Ty Sin Tei as the executrix of his estate.
Pending her qualification as executrix, the Court of First Instance of Manila appointed the Equitable Banking Corporation as the special administrator of the estate, and Special Proceedings No. 5541 were instituted for probate.

The Equitable Banking Corporation filed Civil Case No. 14697 seeking to annul the donations on the ground that an alien (Paz Ty Sin Tei) was disqualified from acquiring lands in the Philippines.
Jose Lee Dy Piao and Uy Cho intervened in this case to assert their rights as heirs by annotating an adverse claim on T.C.T. No. 58652 pursuant to Section 110 of the Land Registration Act on August 22, 1951.
On October 20, 1951, the main complaint was dismissed, and the court clarified that this dismissal did not affect the intervenors’ right to secure relief in an independent action.

On March 21, 1955, Jose Lee Dy Piao filed a new civil action (Civil Case No. 25736) for revocation of the donations and/or reconveyance of the disputed properties, alleging undue influence by Paz Ty Sin Tei over Dy Lac.
Concurrently, he annotated a notice of lis pendens on T.C.T. No. 58652, protecting his claim as an heir over the disputed property.
Despite earlier actions, litigation continued, and another action (Civil Case No. 28727) was instituted, with a corresponding notice annotated on the same title.

On March 23, 1955, Paz Ty Sin Tei filed a petition (GLRO Rec. No. 11546) to cancel the adverse claim annotation on T.C.T. No. 58652.
She argued that because the earlier intervention case (Civil Case No. 14697) had been dismissed and no further action by the intervenor had been taken, the annotation was no longer valid.
In her reply, Paz Ty Sin Tei contended that the existence of two annotations—both the adverse claim and the notice of lis pendens—overburdened the title and were redundant.

On June 25, 1955, the lower court ordered the cancellation of the adverse claim, reasoning that such a claim could not stand indefinitely while litigation was ongoing and that the proper remedy was to institute an action within a reasonable time.
Jose Lee Dy Piao appealed this decision, and the Court of Appeals elevated the case to the Supreme Court because the issues raised were purely of law.

Whether the institution of a civil action along with the annotation of a notice of lis pendens on a certificate of title invalidates a previously annotated adverse claim when both measures are intended to protect the same right or interest.

Whether the existence of both a notice of lis pendens and an adverse claim—regarding the same disputed property interest—creates a redundant or conflicting set of remedies, and which registration is deemed more permanent and resistant to cancellation.