A.M. No. P-01-1478 - Ito vs. De Vera

The dispute involves three parcels of land located in Barangay Baliok, Talomo, Davao City, previously registered in the name of Star Asset Management Ropoas, Inc. under TCT Nos. 146-2012007474, 146-2012007475, and 146-2012007576, covering an aggregate area of 300,000 square meters.
Originally, the properties were owned by Davao Goldland Development Corporation (Goldland) but were mortgaged to the Philippine Bank of Communication (PBCOM), foreclosed by PBCOM, and later transferred to Unimark Investments Corporation.

On December 12, 2012, Star Asset initiated a petition for cancellation of an adverse claim filed on the subject TCTs.
Star Asset asserted that the title to the properties passed from Goldland (through foreclosure and subsequent transfer) and that it acquired the properties from Unimark Investments Corporation.
A Compromise Agreement had been entered into between Star Asset and Goldland which provided for a “buy-back” of the foreclosed properties by Goldland.

The agreement prescribed a detailed payment schedule that included an initial down payment, 36 monthly amortizations, and a balloon payment on the 37th month.
Star Asset claimed that Goldland defaulted on its payment obligations under the agreement, which compelled Star Asset to cancel the agreement on March 21, 2012.

On March 22, 2012, Foothills Realty—standing as the successor-in-interest of Goldland—annotated an adverse claim on the TCTs, asserting its right under the compromise agreement.
Star Asset argued that following the cancellation of the compromise agreement, the adverse claim was null and should automatically lapse since it was valid for only 30 days unless acted upon.
In February 2013, owing to the sale of its interest, Star Asset was substituted by Dallas Energy and Petroleum Corporation, with the affected TCTs reissued in the name of Dallas Energy while carrying over the adverse claim annotation.

The Regional Trial Court (RTC) in January 2014 denied Star Asset’s petition for cancellation of the adverse claim, holding that the compromise agreement constituted a contract to sell that falls under the protection of the Maceda Law (R.A. No. 6552).
The Court of Appeals (CA) affirmed the RTC’s ruling on May 15, 2017 and, on reconsideration, again denied the cancellation of the adverse claim by means of a Resolution dated July 27, 2017.
On September 22, 2017, Star Asset/Dallas Energy elevated the matter via a Petition for Review on Certiorari before the Supreme Court, challenging both the applicability of the Maceda Law and the validity of Foothills Realty’s adverse claim.

Whether the trial court’s and the Court of Appeals’ refusal to cancel the adverse claim annotated on the subject TCTs was correct.

The pivotal issue revolves around the proper cancellation of the adverse claim following the alleged cancellation of the compromise agreement.
Whether the Maceda Law (R.A. No. 6552) is applicable in the context of a “buy-back of foreclosed property” arrangement, particularly when the subject properties are extensive and not primarily residential.
Whether the procedural requirements—such as sending a notarized notice of cancellation and refunding the cash surrender value under the Maceda Law—were indeed requisite and if non-compliance invalidates the cancellation of the compromise agreement.