Case Summary (G.R. No. 251233)
Procedural History
Heirs of Panti filed a petition for cancellation of the Affidavit of Adverse Claim in the Regional Trial Court (RTC), Branch 43, Virac, Catanduanes. The RTC initially denied the petition. On appeal the Court of Appeals (CA) set aside the RTC’s ruling and remanded for trial, finding the trial court had decided on pleadings alone. After trial, the RTC again denied cancellation (Decision dated January 8, 2018). The CA reversed and granted the petition to cancel the adverse claim (Decision dated May 27, 2019; Resolution denying reconsideration dated January 15, 2020). Petitioner sought review by the Supreme Court under Rule 45 of the Rules of Court; the Supreme Court denied the petition and affirmed the CA.
Material Facts
The Heirs of Panti are the registered owners by free patent issued January 15, 1965. Alberto alleges that her parents, Congressman Jose M. Alberto and Rosita U. Alberto (Spouses Alberto), purchased the subject property in 1966 from the Heirs of Panti, supported by two acknowledgment receipts dated June 12 and July 28, 1966 (both identified as partial payments). No deed of sale was presented. Alberto and her family have been in open and peaceful possession of the property for decades, paying real property taxes (noted tax payments from 1997 to 2008) and employing a caretaker; the Heirs of Panti retained physical possession of the owner’s duplicate title. Alberto caused annotation of an Affidavit of Adverse Claim on the title in 2008, more than forty years after the alleged 1966 transaction.
Legal Issue
Whether the Affidavit of Adverse Claim annotated on OCT No. 157 by Alberto should be cancelled — specifically, whether Alberto had an enforceable right or interest in registered land that could properly be registered as an adverse claim under the Property Registration Decree (PD 1529) and related law.
Applicable Law and Legal Principles
- Constitution: The 1987 Constitution is the governing fundamental law applicable to cases decided after 1990.
- PD 1529 (Property Registration Decree) relevant provisions:
- Section 47: Registered land is not subject to prescription or adverse possession; no title in derogation of the registered owner’s title may be acquired by prescription or adverse possession.
- Section 54 (formerly Section 52 of Act No. 496): Interests less than ownership (e.g., contracts to sell, equitable interests) must be registered by filing the instrument creating or claiming such interest; a memorandum is entered on the certificate of title.
- Section 68: Implied or constructive trusts are to be registered by filing a sworn statement with the Register of Deeds; such claims must be registered under that provision and do not affect a purchaser for value in good faith before registration.
- Section 70: Adverse claim — a person claiming any part or interest in registered land adverse to the registered owner may file a sworn statement for registration as an adverse claim when no other provision in the Decree provides for registration of that right; the adverse claim is effective for thirty days from registration and parties in interest may file for cancellation; courts must give speedy hearing and may cancel frivolous adverse claims or impose fines.
Trial Court Findings
After trial the RTC found that Alberto had a valid and lawful claim over the subject property and denied the petition to cancel the adverse claim. The RTC relied on evidence of long possession, payment of real property taxes, and family administration of the property as supporting an enforceable claim sufficient to justify the adverse-claim annotation.
Court of Appeals Rationale for Cancellation
The CA reversed for multiple interrelated reasons grounded in PD 1529 and the evidentiary record:
- Contract to sell and non-payment: The CA treated the available papers (acknowledgment receipts) as indicative of a contract to sell, not a completed sale. Alberto failed to show full payment of the purchase price (an alleged remaining balance of P550.00) and did not aver payment in her adverse claim affidavit; the non-fulfillment of the suspensive condition prevented perfection of a contract of sale and transfer of ownership.
- Registrability of lesser interests: Interests less than ownership (including contractual or equitable interests) are registrable under Section 54 (formerly Section 52 of Act No. 496) by filing the instrument creating such interest; such registration is the appropriate route rather than an adverse claim under Section 70 when another registration provision applies.
- Failure to tender or allege tender of balance: Alberto asserted she could not register the sale because Lydia (the seller) refused to surrender the owner’s duplicate title, but she did not allege that the balance had been paid or that Lydia refused to accept payment such that she was constrained to tender the balance in court. The lack of such allegations undermined her claim of a perfected sale.
- Staleness of claim: The adverse claim was filed in 2008, over 41 years after the 1966 acknowledgment receipts. The CA found Alberto failed to prove she had an enforceable claim or interest against the Heirs of Panti at the time of annotation.
- Implied trust registrability: If the asserted right rested on an implied or resulting trust, Section 68 of PD 1529 prescribes registration of such trusts; an implied trust is not registrable as an adverse claim under Section 70 when Section 68 provides the specific route.
- Possession and prescription: Possession-based assertions (prescription or adverse possession) do not create registrable rights against registered land under Section 47; because registered land is not subject to prescription in derogation of the registered owner, an adverse claim cannot be
Case Syllabus (G.R. No. 251233)
Case Caption and Nature of Proceeding
- Petition for Review under Rule 45 of the Rules of Court filed by petitioner Rosita U. Alberto (Alberto) seeking to reverse and set aside:
- The Decision dated May 27, 2019 of the Court of Appeals (CA) in CA-G.R. CV No. 110711; and
- The Resolution dated January 15, 2020 of the CA denying reconsideration.
- The CA had reversed and set aside the Decision dated January 8, 2018 of Branch 43, Regional Trial Court (RTC), Virac, Catanduanes, in Special Proceeding No. 1203, which had denied the petition to cancel an Affidavit of Adverse Claim annotated on Original Certificate of Title (OCT) No. 157.
- The present Supreme Court decision was penned by Justice Inting and resolved whether there was basis to cancel the affidavit of adverse claim executed by Alberto and annotated on the title to the subject property.
Antecedent Facts (as alleged and admitted)
- Subject property: a 16,210-square-meter parcel located at Calatagan, Virac, Catanduanes, described as Lot No. 4276, covered by Original Certificate of Title No. 157 and Free Patent No. 279275, registered in the name of the Heirs of Juan A. Panti (Heirs of Panti).
- Heirs of Panti averred that Juan A. Panti is the registered owner of the subject property.
- Alberto alleged that sometime in 1966 Spouses Jose M. Alberto and Rosita U. Alberto purchased the subject property from the Heirs of Panti, represented by Lydia B. Panti (Lydia), for a valuable consideration.
- Alberto submitted two acknowledgement receipts dated June 12, 1966 and July 28, 1966 as proof of partial payments.
- Alberto and her family claimed open and peaceful possession and administration of the subject property for more than 40 years and that they had been paying real property taxes thereon (tax payments from 1997 until 2008 noted).
- It was undisputed that the OCT remained in the name of the Heirs of Panti and that the Heirs remained in possession of the owner’s duplicate title.
- Alberto caused the annotation of an Affidavit of Adverse Claim on OCT No. 157 on May 19, 2008.
Procedural History — Trial Court to Supreme Court
- Heirs of Panti filed Petition for Cancellation of Affidavit of Adverse Claim in the RTC seeking cancellation of the adverse claim annotated on OCT No. 157.
- Alberto filed Comment and Opposition asserting, among other things, absence of the page showing annotation in the petition and asserting purchase and long possession by the Alberto family.
- Heirs of Panti replied, pointing out absence of deed of sale, that receipts were partial payments, and that the free patent was issued January 15, 1965 with a five-year prohibition on alienation, making the 1966 receipts within that prohibition period.
- RTC (Branch 43, Virac) rendered Decision on December 9, 2008 denying the petition for cancellation on ground that the adverse claim was proper with factual and legal basis.
- Heirs of Panti appealed to the CA. In a Decision dated July 24, 2012 (CA-G.R. CV No. 92294) the CA set aside the RTC ruling and directed the RTC to conduct trial and receive evidence to determine validity of the adverse claim because the RTC had not conducted hearing and had based its ruling on pleadings.
- RTC conducted pre-trial and trial; parties admitted the adverse claim annotation and that the OCT remained in possession of the Heirs.
- RTC rendered Decision dated January 8, 2018 reiterating its finding that Alberto had a valid and lawful claim and denying the petition to cancel the adverse claim. Reconsideration denied February 9, 2018.
- Heirs of Panti appealed to the CA. CA Decision dated May 27, 2019 granted the appeal, reversed the RTC Decision, and ordered cancellation of the Adverse Claim annotated as Entry Number 106669 on page 403, Volume X of OCT No. 157. Reconsideration by Alberto denied by CA Resolution dated January 15, 2020.
- Alberto filed Petition for Review in the Supreme Court (G.R. No. 251233). The Supreme Court resolved the petition by Decision dated March 29, 2023.
Parties’ Main Contentions
- Heirs of Panti:
- The receipts presented by Alberto were only receipts of partial payment; no deed of sale was executed; thus, there was no perfected contract of sale and no transfer of ownership.
- The free patent issued January 15, 1965 contained a five-year prohibition against encumbrance or transfer; the 1966 receipts were within that prohibition and the supposed sale was contrary to law.
- The adverse claim should be cancelled because Alberto failed to show full payment of purchase price and, alternatively, that the adverse claim was based on prescription/adverse possession which cannot affect registered title.
- Alberto:
- The CA erred in failing to appreciate evidence of five-decade exclusive possession and four-decade inaction of the Heirs of Panti amounting to laches that justified annotation of the adverse claim.
- She asserted payment of real property taxes (1997–2008), engagement of a caretaker, planting of trees, and maintenance measures demonstrating possession and control.
- She argued that laches barred the Heirs from recovering the property.
Evidence Adduced and Admissions
- Acknowledgement receipts dated June 12, 1966 and July 28, 1966 offered by Alberto and admitted as evidence; both receipts indicated partial payments.
- Admission that OCT No. 157 remain