G.R. No. L-32621. July 29, 1987
ASSOCIATION OF BAPTISTS FOR WORLD EVANGELISM, INC., PETITIONER, VS. FIRST BAPTIST CHURCH AND COURT OF APPEALS, RESPONDENTS.
PADILLA, J.:
Review on certiorari of the Resolution* of the
respondent Court of Appeals, dated 17 August 1970, issued in G.R. No. 37022-R,
entitled: “Association of Baptists
for World Evangelism, Inc., petitioner-appellee versus First Baptist
Church, respondent-appellant”, which dismissed petitioner’s application
for cancellation of a notice of adverse claim.
The facts of the case which led to the filing of this petition
are as follows:
On 30 September 1963, the parties entered into an agreement,
denominated “Contract of Purchase and Sale” wherein the petitioner
agreed to sell to the respondent a parcel of land, together with the building
and improvement thereon, with an area of 735 Sq. meters, located at the corner
of Leon Guinto and Padre Faura Streets, Manila, and covered by TCT No. 62203 of
the Register of Deeds of Manila, for the amount of P293,506.25, payable in
three (3) installments, as follows:
“1. The First Installment shall be paid by the
VENDEE to the VENDOR on or before September 30, 1963 amounting to P29,350.62,
“2. The Second Installment which shall be the sum
of P66,038.90, shall be paid by the VENDEE to the VENDOR on or before September
30, 1964.
“3. The last and final installment which shall be
the sum of P198,116.72, less the
P25,000.00 deduction allowed by the VENDOR, shall be paid by the VENDEE to the
VENDOR on or before September 30, 1965.”
The parties further agreed that:
“All the foregoing payments shall be made by the VENDEE to the
VENDOR’S duly authorized Resident Agent and attorney-in-fact in Manila,
Philippines.
“It is hereby expressly understood and agreed that immediately
upon the execution of this document and thereafter for a period of five (5)
consecutive years so long as this agreement is in force and effect, the VENDEE
shall have the right to occupy and use the property for church purposes but for
no other purpose whatsoever.
“Should the VENDEE fail to pay any or all the installments
when due, this agreement shall automatically be considered as rescinded and
without force and effect and the VENDEE shall, without further demand from the
VENDOR peacefully return possession of the property to the VENDOR; provided,
however, that any installment which the VENDEE may have already paid to the
VENDOR shall be returned by the VENDOR to the VENDEE.
“Upon final and complete payment of the stipulated purchase
price the VENDOR shall immediately execute and deliver to the VENDEE a final
and absolute Deed of Sale of the Property free and clear of all liens and
encumbrances.”[1]
The first installment of the purchase price was duly paid and the
respondent took possession of the property.
However, when the second installment became due on 30 September 1964,
the petitioner, upon request of the respondent, extended the period of its
payment to 30 October 1964. For this
purpose, the parties executed a document entitled: “Supplement to the Contract of Purchase
and Sale of September 30,
1963″ with the stipulation that “all the provisions of the original
contract of purchase and sale of 30 September 1963 shall remain in full force and effect, except as modified
and supplemented.”[2]
The respondent, however, failed to pay the second installment when it became
due. Neither did it return the
possession of the property to the petitioner.
But, on 8 March 1965, the respondent caused to be recorded in the
Office of the Register of Deeds of Manila a Notice of Adverse Claim on TCT No.
62203.[3]
Upon learning of the burden constituted on its certificate of title, the
petitioner, on 6 June 1965, filed a petition with the Court of First Instance
of Manila for the cancellation of the said notice of adverse claim, on the
ground that when said notice of adverse claim was filed, the respondent had
already lost its right to or interest in the property, in view
of the automatic rescission of the contract caused by the respondent’s failure to pay the second
installment of the purchase price on 30 October 1964, as agreed upon, so that
the notice of adverse claim is invalid and should be cancelled.[4]
The respondent filed its opposition to the petition for
cancellation of notice of adverse claim[5]
and the case was then set for hearing.
At the hearing on 14 August
1965, the petitioner presented its evidence consisting of the Contract of Purchase and Sale, the Supplement
thereto, and the Notice of Adverse Claim.
The respondent, upon the other hand, did not submit any evidence. The court then declared the case
“submitted”. However, in an
Order issued on the same day, the court
suspended the resolution of the petition to cancel the notice of adverse claim
“until after fifteen (15) days from today, during which time counsel for
respondent should file civil action in order to thresh out the question involved
in ordinary suit. If after the lapse of
said period no civil action is
filed, this Court will be constrained to act on same.”[6]
The respondent failed to initiate the civil suit, as ordered, so
that the petitioner, on 8 September 1965, filed a motion to give due course to
its petition to cancel notice of adverse claim.[7]
The motion was set for hearing on 11 September 1965 and, on said date, the
respondent manifested in court
that it was the prevailing opinion among its members that to file a suit against the petitioner would be
“unscriptural” and that they intend to do so only as a last recourse
when it becomes absolutely necessary that it be done.[8]
On 15 September 1965, the lower court issued an order directing
the cancellation of the notice of adverse claim on TCT No. 62203 on the grounds
that the basis of said notice of adverse claim was no longer in force and
effect inasmuch as the same was automatically rescinded upon the failure of the
respondent to pay the second installment when it became due, and for failure of
the respondent to file the civil action, as required by the court.[9]
The respondent filed a motion for reconsideration of the Order
claiming, for the first time, that the trial court had no jurisdiction in that,
as a land registration court, it
cannot pass upon the issue of whether or not the contract of purchase and sale
has been rescinded or rendered without force and effect,[10]
but the trial court denied said motion.[11]
Whereupon, the respondent appealed to the Court of Appeals. On 25 May 1970, the appellate court rendered
judgment affirming the order of
the lower court.[12]
This decision, however, was set aside by the appellate court in its Resolution dated 17 August 1970 on the ground
that the lower court, sitting as a land registration court, had no jurisdiction
to resolve the issues presented which should be litigated in a regular
court. Accordingly, the respondent appellate
court ordered the dismissal of the petition to cancel notice of adverse claim.[13] Hence, the present recourse.
The issue raised is whether the Court of First Instance, now the
Regional Trial Court, acting as a land
registration court, has jurisdiction to cancel an adverse claim based on a contract to sell or promise to sell
which can no longer be enforced because of non-payment of the agreed purchase
price.
This issue had been raised in view of the findings of the
respondent Court of Appeals that the court a quo, sitting
as a land registration court, has limited jurisdiction and has no authority to
resolve controversial issues which should be litigated before a court of general jurisdiction. Under existing laws, however, this concept no
longer holds. Regional Trial Courts now
have exclusive jurisdiction, not only over applications for original
registration of title to lands, including improvements and interests therein,
but also over petitions filed after original registration of title, with power
to hear and determine all questions arising upon such applications or
petitions. Section 2 of PD 1529,
otherwise known as the Property Registration Decree, provides, as follows:
“SEC. 2. Nature of
registration proceedings: jurisdiction
of courts. – Judicial proceedings
for the registration of lands throughout the Philippines shall be in rem
and shall be based on the generally accepted principles underlying the Torrens
system.
Courts of First Instance shall have exclusive jurisdiction over
all applications for original registration of title to lands, including
improvements and interests therein, and over all petitions filed after original
registration of title, with power to hear and determine all questions arising
upon such applications or petitions.
The court through its clerk of court shall furnish the Land Registration
Commission with two certified copies of all pleadings, exhibits, orders, and
decisions filed or issued in applications or petitions for land registration,
with the exception of stenographic notes, within five days from the filing or
issuance thereof.”
But, even under Act 496, the Land Registration Act, the court of
first instance, sitting as a land registration court, has the authority to
conduct a hearing, receive evidence, and decide controversial matters with a
view to determining whether or not the filed notice of adverse claim is
valid. Section 110 of Act 496 provides:
“SEC. 110. Whoever
claims any part or interest in registered land adverse to the registered
owner, arising subsequent to the date of the original registration, may, if no
other provision is made in this Act for registering the same, make a statement
in writing setting forth fully his alleged right or interest, and how or under
whom acquired, and a reference to the volume and page of the certificate of
title of the registered owner, and a description of the land in which the right
or interest is claimed.
“The statement shall be signed and sworn to, and shall state
the adverse claimant’s residence, and designate a place at which all notices
may be served upon him. This statement
shall be entitled to registration as an adverse claim, and the court, upon a
petition of any party in interest, shall grant a speedy hearing upon the question
of the validity of such adverse claim and shall enter such decree therein as
justice and equity may require. If the
claim is adjudged to be invalid, the registration shall be cancelled. If in any case the court after notice and
hearing shall find that a claim thus registered was frivolous or vexatious, it
may tax the adverse claimant double or treble costs in its discretion.”
At any rate, it appears that the disputed “Contract of
Purchase and Sale” entered into by and between the parties on 30 September
1963 had already been rescinded so that there is no more basis for the
continued annotation of the notice of adverse claim on the petitioner’s TCT No.
62203. Records show that the herein
petitioner had filed an action against the respondent for the rescission of
said contract of purchase and sale on 1 August 1967 before the Court of First
Instance of Manila, docketed therein as Civil Case no. 70298, and after trial,
the said contract was ordered rescinded for reasons therein stated. On appeal to the Court of Appeals, docketed
therein as CA-G.R. No. 42467-R, the judgment was affirmed. The respondent then appealed to this Court,
docketed as G.R. no. L-35008; again, its petition was denied on 15 May 1972,
“for being factual (insufficient showing that the findings of fact are
unsupported by substantial evidence) and for lack of merit.” The judgment
became final and executory on 14 August 1972.
WHEREFORE, the resolution of the respondent Court, dated
17 August 1970, is hereby set aside. The
notice of adverse claim annotated on petitioner’s TCT No. 62203 by virtue of
the “Contract of Purchase and Sale” entered into by and between the
parties on 30 September 1963 is hereby ordered cancelled. Without costs.
SO ORDERED.
Yap, (Chairman), Melencio-Herrera, Paras, and Sarmiento, JJ., concur.
* Penned by Justice Jesus Y. Perez
with the concurrence of Justices Juan P. Enriquez and Jose M. Mendoza
[1]
Record on Appeal, p. 9
[2]
Id., p. 14
[3]
Id., p. 19
[4]
Id., p. 2
[5]
Id., p. 23
[6]
Rollo, p. 17, Decision of Court of Appeals, p. 6
[7]
Record on Appeal, p. 37
[8]
Id., p. 39
[9]
Id., p. 41
[10]
Id., p. 43
[11]
Id., p. 51
[12]
Rollo, p. 12
[13]
Id., p. 30