CYNTHIA CORAZON T. PANGILINAN, PETITIONER-APPELLANT, VS. MARIA ROSITA G. TINIO, OPPOSITOR-APPELLEE.

Pangilinan versus Tinio

The Case

This is the case of Pangilinan versus Tinio. Cynthia Corazon T. Pangilinan, the registered owner of a parcel of land in Quezon City, filed a petition in the Regional Trial Court, sitting as a land registration court, to cancel two annotations on her certificate of title: an encumbrance noted under Section 7 of Republic Act Number 26, and a notice of adverse claim registered by Maria Rosita G. Tinio. Tinio opposed the petition, claiming that the property had belonged to her late parents and that the title had been obtained through fraud. The trial court dismissed the prayer to cancel the adverse claim without holding a hearing. The case matters because it fixes the procedural rule that a land registration court cannot dismiss a petition to cancel an adverse claim on the mere allegation of fraud; it must conduct the speedy hearing that the Property Registration Decree commands.

Procedural History

Pangilinan filed her petition for cancellation of annotation of encumbrance before the Regional Trial Court of Quezon City. The trial court found the petition sufficient in form and substance, set it for initial hearing, and directed that notice be served on Tinio, the Solicitor General, the City Prosecutor of Quezon City, the Register of Deeds of Quezon City, and the Land Registration Authority. At the initial hearing, Pangilinan marked her exhibits to prove compliance with the jurisdictional requirements. Tinio then filed a motion to dismiss, and the trial court issued an order partially granting it: it dismissed the petition insofar as it prayed for cancellation of the adverse claim, while allowing Pangilinan to present evidence on the Section 7 encumbrance. Pangilinan filed an omnibus motion for reconsideration and for inhibition, which the trial court denied. Pangilinan then appealed to the Supreme Court, assigning a single error: that the trial court gravely erred in dismissing the petition for cancellation of the adverse claim without a hearing to determine its validity under Section 70 of the Property Registration Decree. Tinio failed to file her appellee's brief, and the case was deemed submitted for decision without it.

Facts

Pangilinan alleged that she is the absolute owner of a parcel of land covered by Transfer Certificate of Title Number N-313427 of the Registry of Deeds of Quezon City, which she bought from Olivia Garrido through a Deed of Absolute Sale dated February 11, 2008. The dorsal side of the title bore an annotation of encumbrance dated January 19, 1996, made pursuant to Section 7 of Republic Act Number 26. On June 24, 2010, Tinio caused the annotation of a Notice of Adverse Claim on the same title, claiming rights and participation in the property. Pangilinan alleged that Tinio never instituted any court action over the property, and that the adverse claim, being effective only for thirty days, could now be canceled.

Tinio, in her motion to dismiss, claimed that she and her siblings are heirs of the late Spouses Artemio and Anita Galang, the previous owners, who neither sold, donated, nor encumbered the property during their lifetime. She alleged that after her parents' death, the title was canceled and a new one issued in the names of other persons; that her mother's signature was falsified so that the perpetrators could claim the owner's duplicate was lost; and that the series of transactions over the property took place between 2007 and 2009, when her parents were already dead.

The trial court dismissed the prayer to cancel the adverse claim, reasoning that the allegations of fraud could not be properly and fully threshed out in a land registration proceeding. It allowed Pangilinan to present evidence only on the Section 7 encumbrance. Pangilinan appealed.

Issues

• Whether or not the trial court erred in dismissing the petition for cancellation of the notice of adverse claim without conducting a hearing, as required by Section 70 of Presidential Decree Number 1529, as amended.

Applicable Provisions

Section 70 of Presidential Decree Number 1529, the Property Registration Decree, provides:

Section 70. Adverse Claim. 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 decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of certificate of title of the registered owner, the name 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 a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be canceled upon filing of a verified petition therefor by the party in interest: Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant. Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered canceled. If, in any case, the court, after notice and hearing shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos, nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse claim by filing with the Register of Deeds a sworn petition to that effect.

This provision is the very basis of the petition and expressly commands a speedy hearing on the validity of the adverse claim, which the trial court failed to hold.

Ruling

The Supreme Court granted the appeal. On the sole issue, it held that the trial court erred in dismissing the petition without a hearing. The Court stressed that the burden rests on the adverse claimant, Tinio, to prove her allegations of fraud by presenting evidence during the hearing; failing which, the petition for cancellation would have been granted instead of dismissed. The trial court's reasoning that fraud cannot be threshed out in a land registration proceeding was misplaced, because the nature and purpose of a petition for cancellation of an adverse claim differ from those of an ordinary action before a court of general jurisdiction. In the petition, the petitioner only seeks to revoke or cancel the notice; in an ordinary action for reconveyance or annulment of title, the issues of title and ownership are involved. The Court added that Section 70 does not distinguish whether the ground for cancellation is fraud or not, and quoted the maxim: "Where the law does not distinguish, courts should not distinguish."

The Court relied on its earlier ruling in Sajonas versus Court of Appeals, which explained why a hearing is necessary:

The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising from such adverse claim.

The Court also held that even if the petition was filed more than thirty days after the annotation, the adverse claim remains effective, and a hearing is still necessary to determine its validity. It is only after the parties have adduced their evidence that the court can determine whether the notice should be canceled or should remain annotated.

Doctrine

A notice of adverse claim is a measure designed to protect the interest of a person over real property where registration of that interest is not otherwise provided for, and it serves as a warning to third parties that someone claims an interest in or a better right than the registered owner. Under Section 70 of the Property Registration Decree, the court must grant a speedy hearing upon the question of the validity of the adverse claim before ordering its cancellation. The adverse claimant bears the burden of proving the allegations in the notice, including fraud, during that hearing. The land registration court cannot refuse to hear the matter on the ground that fraud is involved, because the law does not distinguish the ground for cancellation. The lapse of the thirty-day period does not by itself invalidate the claim; a hearing is still required to determine its validity.

Disposition

The appeal was granted; the order of the trial court, insofar as it dismissed the petition for cancellation of the notice of adverse claim, was reversed and set aside, and the case was remanded to the lower court with a directive to conduct a hearing to determine the validity of Tinio's notice of adverse claim.

Remember This

Memorize this line: the land registration court must hold a speedy hearing under Section 70 before it may cancel an adverse claim, and the adverse claimant carries the burden of proving the fraud alleged in the notice. Examiners use this case to test the procedure for cancellation of adverse claims and the distinction between a land registration petition and an ordinary action for reconveyance or annulment of title.