G.R. No. 223660 - Valderama vs. Arguelles

Case Summary (G.R. No. 223660)

Key Dates and Procedural Posture

Relevant dates and filings from the record: alleged deed of sale executed November 18, 2004; Conchita’s affidavit of adverse claim filed November 14, 2007; Conchita died January 24, 2008. Respondents filed a petition to cancel adverse claim with the RTC on December 11, 2009 (Case No. P-09-499, LRC Rec. No. 2400). While that petition was pending, respondents filed a separate civil action for recovery of ownership and possession (Civil Case No. 13130761) on September 24, 2013; petitioner and a co-opposer filed a notice of lis pendens on October 22, 2013. The RTC ordered cancellation of the adverse claim on April 11, 2014 (denied reconsideration July 31, 2014). The Court of Appeals rendered a decision on December 14, 2015 dismissing petitioner’s appeal for lack of merit and issued a resolution on February 24, 2016 denying reconsideration. The petition for review on certiorari was thereafter filed before the Supreme Court.

Applicable Law and Authorities

Constitutional basis: 1987 Philippine Constitution (applicable given the decision date). Statutory and regulatory provisions: Property Registration Decree (P.D. No. 1529) provisions on Adverse Claim (Section 70) and on Notice of Lis Pendens and its cancellation (Sections 76–77); antecedent provisions under Act No. 496 (Section 110) as background. Rules of Court provisions governing modes of appeal and dismissal of improper appeals (Rule 41 Section 2; Rule 50 Section 2; Rule 45 Section 2) were applied procedurally. Controlling jurisprudence discussed in the decision includes Villaflor v. Juezan, Paz Ty Sin Tei v. Dy Piao, Sajonas v. Court of Appeals, and subsequent cases interpreting adverse claim and lis pendens.

Facts and Contentions

Respondents asserted that Conchita, as registered owner, executed a valid absolute deed of sale in their favor (November 18, 2004) and that the subject property was thereafter registered to respondents under TCT No. 266311. Conchita, however, earlier registered an affidavit of adverse claim on November 14, 2007, and died January 24, 2008. Respondents therefore sought cancellation of the adverse claim as registered on TCT No. 266311. Petitioner and Tarcila, as heirs of Conchita, opposed the cancellation petition, asserting succession of Conchita’s rights to her heirs and alleging simulation of the sale (continuous possession by Conchita, payment of taxes by Conchita, and possession of the owner’s duplicate). While the cancellation petition was pending, respondents filed a separate action for recovery of ownership and possession; petitioner and co-opposer then annotated a notice of lis pendens on the title. Respondents moved the RTC for outright cancellation of the adverse claim on the ground that the subsequent lis pendens rendered the cancellation petition moot and academic.

RTC Ruling

The Regional Trial Court (Branch 4, Manila) ordered cancellation of the adverse claim and explicitly reasoned that the annotation of a notice of lis pendens on the same TCT made the petition for cancellation moot and academic. The RTC considered Villaflor v. Juezan and Villaflor-related jurisprudence in reaching its conclusion, but qualified that the cancellation did not resolve the veracity or substance of the adverse claim and left issues of ownership and possession to the court handling the related civil action (Branch 47, Manila). The RTC denied reconsideration.

Court of Appeals Ruling and Procedural Disposition

The Court of Appeals dismissed petitioner’s appeal for lack of merit and, procedurally, treated the question as a pure question of law subject to dismissal under Section 2, Rule 50 of the Rules of Court because the appeal raised only questions of law. Substantively, the CA found no error in the RTC’s cancellation order and relied on Villaflor v. Juezan in support of the cancellation as rendering the matter moot and academic.

Issues Presented to the Supreme Court

Petitioner raised three principal issues: (1) whether the appeal to the Court of Appeals involved a pure question of law; (2) whether Villaflor v. Juezan was inapplicable to the case at bar; and (3) whether an adverse claim may be cancelled merely because another person later annotated a notice of lis pendens on the same title. The core legal question before the Court was whether the subsequent annotation of a notice of lis pendens on a certificate of title renders a petition to cancel an existing adverse claim on that same title moot and academic.

Supreme Court’s Procedural Determination

The Supreme Court agreed with the Court of Appeals that the appeal before the CA involved a pure question of law because the essential facts were not in dispute and resolution depended on legal application rather than reevaluation of evidence. Consequently, the CA’s dismissal of the appeal as an improper one under the Rules of Court was correct. The Court noted, however, that it would proceed to resolve the substantive legal question to reconcile conflicting jurisprudence and to bring finality to the controversy, invoking recognized exceptions to strict application of procedural bars where justice and important issues require resolution.

Statutory and Doctrinal Distinction Between Adverse Claim and Lis Pendens

The Court thoroughly examined the statutory frameworks and jurisprudential definitions. Under P.D. No. 1529 (and previously Act No. 496), an adverse claim (Section 70) is a registered annotation intended to protect a claimant’s interest in registered land where no other registration provision applies; it functions as a more permanent protective annotation and may be cancelled only upon court adjudication of its invalidity. The annotation of lis pendens (Sections 76–77) is a notice of pending judicial action affecting registered land, primarily to warn third parties and to keep the subject matter within the court’s power; a lis pendens is an extrajudicial incident that does not create a right or lien and may be cancelled under circumstances without necessarily adjudicating merits. The Court emphasized that adverse claims and notices of lis pendens serve different purposes and are of different legal character.

Application of Precedent: Villaflor v. Juezan and Ty Sin Tei v. Dy Piao

The Court distinguished Villaflor v. Juezan from the present case on factual grounds: Villaflor involved a related civil case that had been terminated and had attained finality, a material circumstance that supported treating the petition to cancel the adverse claim as moot and academic in that instance. Because the related civil action in the present record remained pending and no final adjudication had occurred, Villaflor’s holding was not controlling here. Instead, the Court relied on Paz Ty Sin Tei v. Jose Lee Dy Piao, where this Court held that the i

Case Syllabus (G.R. No. 223660)

Facts / Antecedents

On November 18, 2004, Conchita Amongo Francia (Conchita), then registered owner of a 1,000-square-meter parcel in Sampaloc, Manila covered by TCT No. 180198, executed an absolute deed of sale in favor of respondents Sonia Arguelles and Lorna Arguelles; the subject property was thereafter registered in respondents’ names under TCT No. 266311.
On November 14, 2007, Conchita filed an affidavit of adverse claim which was registered and annotated on TCT No. 266311; Conchita died on January 24, 2008.
Respondents, as registered owners, filed a petition to cancel adverse claim on December 11, 2009, docketed as Case No. P-09-499, LRC Rec. No. 2400 before the Regional Trial Court (RTC), Branch 4, Manila, seeking cancellation of the adverse claim annotated as Entry No. 8957/Vol. 132/T-266311 in the Registry of Deeds of Manila.
On February 10, 2010, petitioner Lourdes Valderama and Tarcila Lopez, alleged full-blood sisters and heirs of Conchita, filed an opposition asserting that Conchita’s claims and rights transmitted to her heirs by operation of law and alleging simulation of the sale to respondents on grounds including: (1) Conchita’s continuous physical and legal possession; (2) Conchita’s payment of real estate taxes; and (3) Conchita’s possession up to her death of the Owner’s Duplicate Copy of TCT No. 266311.
While the cancellation petition was pending before the RTC, respondents filed on September 24, 2013 a separate complaint for recovery of ownership and physical possession with damages and with prayer for injunctive relief, docketed as Civil Case No. 13130761 and raffled to RTC, Branch 47, Manila.
In reaction to respondents’ Civil Case No. 13130761, petitioner and Tarcila filed a notice of lis pendens on TCT No. 266311 on October 22, 2013.
Respondents moved for outright cancellation of the adverse claim by manifestation and motion on November 21, 2013, arguing that the later-filed lis pendens rendered the cancellation petition moot and academic.

Procedural History

RTC, Branch 4, Manila issued a Resolution dated April 11, 2014 ordering cancellation of the adverse claim annotated as Entry No. 8957/Vol. 132/T-266311, reasoning that the notice of lis pendens annotated on TCT No. 266311 reconciled the competing case law and cautioned against duplicative adjudication; the RTC specified that the cancellation did not determine the veracity of the adverse claim nor finality on ownership and possession issues pending before Branch 47.
Petitioner and Tarcila filed a motion for reconsideration which the RTC denied in a Resolution dated July 31, 2014.
Petitioner and Tarcila appealed to the Court of Appeals (CA), raising a single assignment of error contesting the RTC’s cancellation of the adverse claim solely because of the subsequently annotated notice of lis pendens.
On December 14, 2015, the CA dismissed the appeal for lack of merit and, invoking Section 2, Rule 50 of the Rules of Court, dismissed the appeal as raising only a question of law. The CA also found no error in the RTC’s cancellation of the adverse claim and relied on Villaflor v. Juezan in concluding the issue was moot and academic under its facts.
Petitioner and Tarcila moved for reconsideration in the CA which was denied in a Resolution dated February 24, 2016.
Petitioner Lourdes Valderama alone filed a petition for review on certiorari under Rule 45 before the Supreme Court, raising issues as to (1) whether the CA appeal involved a pure question of law; (2) applicability of Villaflor v. Juezan; and (3) whether an adverse claim may be cancelled merely because of a subsequent annotation of notice of lis pendens on the same title.
The present Supreme Court decision resolves the Rule 45 petition filed by petitioner.

Issues Presented to the Supreme Court

Whether the appeal filed before the Court of Appeals involved a pure question of law such that dismissal under Section 2, Rule 50 was proper.
Whether the Court’s ruling in Villaflor v. Juezan is applicable to the facts of this case and justifies cancellation of the adverse claim.
Whether an adverse claim annotated on a certificate of title may be cancelled solely because another person later annotated a notice of lis pendens on the same title — i.e., whether the subsequent lis pendens annotation automatically renders a petition to cancel an adverse claim moot and academic.

Ruling of the Regional Trial Court (RTC)

RTC ordered cancellation of the adverse claim annotated as Entry No. 8957/Vol. 132/T-266311 on the ground that ownership and possession were made issues in Civil Case No. 13130761 and that the notice of lis pendens annotated on the title rendered the adverse claim unnecessary to maintain in light of conflicting case law; the RTC expressly stated the cancellation was not a determination on the veracity or substance of the adverse claim nor a final adjudication on ownership and possession.
RTC relied upon Villaflor v. Juezan and Villaflor’s apparent reconciliation with Villaflor vs. Juerzan and Sajonas v. Court of Appeals (as discussed in its resolution) to support the cancellation in view of the later-registered lis pendens.
RTC indicated concern that proceeding to determine the substance of the adverse claim could result in two adverse decisions if Branch 47 adjudicated the related case.

Ruling of the Court of Appeals (CA)

CA dismissed petitioner’s appeal for lack of merit and as improperly raising only questions of law, pursuant to Section 2, Rule 50 of the Rules of Court, since the appeal’s resolution did not require re-examination of evidence but only application of law on undisputed facts.
The CA found no error in the RTC’s cancellation of the adverse claim and relied on Villaflor v. Juezan to hold that the filing/annotation of a notice of lis pendens related to the same matter rendered the petition for c