JESUS GARCHITORENA, ET AL., APPLICANTS AND APPELLANTS, VS. DIRECTOR OF LANDS, ET AL., OPPOSITORS. ZULUAGA & ERQUIAGA, INC., APPELLEE.

Garchitorena versus Zuluaga and Erquiaga

The Case

This is the case of Garchitorena versus Zuluaga and Erquiaga. Jesus Garchitorena and his co-owners, the registered owners of six parcels of land, asked the Court of First Instance of Camarines Sur to cancel a notice of lis pendens annotated on their certificate of title, on the ground that the money judgment behind that notice had already been paid. The registered owner of the judgment, Zuluaga and Erquiaga, Incorporated, opposed, insisting it had never been notified and that the judgment remained unsatisfied. The case matters because it draws the line between a summary petition under the Land Registration Act and a full ordinary action: where the facts are genuinely contested, the cancellation of a lis pendens cannot be had collaterally, and the parties must litigate in a separate suit.

Procedural History

The applicants filed their petition in the original registration case, invoking Section 112 of Act Number 496 and praying that the Register of Deeds of Camarines Sur be ordered to cancel the notice of lis pendens. The Court of First Instance of Camarines Sur, in its order of December 4, 1946, granted the petition and directed the cancellation. Zuluaga and Erquiaga, Incorporated, through counsel, moved for reconsideration, alleging that it had not been furnished a copy or notice of the petition, that the judgment was unsatisfied, and that the quitclaim relied upon had been signed by its attorney without authority, knowledge, or consent. The clerk of court was commissioned to receive evidence. On December 10, 1948, the trial court issued an order dismissing the petition, without prejudice to the parties filing such action as they may deem necessary for the protection of their rights, reasoning that the questions of fact and law raised could not be decided collaterally, and that no notice had been served on Zuluaga and Erquiaga, Incorporated, in violation of Section 112. The applicants appealed that order to the Supreme Court.

Facts

Jesus Garchitorena and his co-owners held six parcels of land under original certificate of title Number 928 of the Register of Deeds of Camarines Sur. In a civil case for a sum of money, Zuluaga and Erquiaga, Incorporated, obtained a judgment against them. As plaintiff in that case, Zuluaga and Erquiaga caused a notice of lis pendens to be annotated on the back of the certificate of title, with respect to parcels five and six.

On November 7, 1946, the owners filed a petition in the original registration case, alleging that the judgment had already been satisfied, and praying that the Register of Deeds be ordered to cancel the notice of lis pendens under Section 112 of Act Number 496. The trial court granted the petition on December 4, 1946, and ordered the cancellation.

On December 18, 1946, Zuluaga and Erquiaga, Incorporated, through counsel, moved for reconsideration. It alleged that it had never been furnished a copy or notice of the petition, in violation of Section 112; that the judgment had not been satisfied; and that the quitclaim presented by the owners, signed by Andres Aguilar as its attorney and acknowledging receipt of five thousand pesos in satisfaction of the judgment, had been signed without its authority, knowledge, or consent. After receiving evidence, the trial court dismissed the petition, without prejudice, holding that the controversy could not be resolved collaterally and that no notice had been served.

Issues

• Whether or not the question of the satisfaction of the judgment in the civil case may be decided collaterally in the registration proceeding, for the purpose of cancelling the notice of lis pendens.
• Whether or not the petition for cancellation may be granted despite the failure to serve notice on Zuluaga and Erquiaga, Incorporated, as required by Section 112 of Act Number 496.

Applicable Provisions

Section 112 of Act Number 496, the Land Registration Act, provides:

Section 112. Any registered owner or other person in interest may at any time apply by petition to the court, upon the ground that registered interests of any description, whether vested, contingent, expectant, or inchoate, have terminated and ceased; or that new interests have arisen or been created which do not appear upon the certificate; or that any error, omission, or mistake was made in entering a certificate or any memorandum thereon, or on any duplicate certificate; or that the name of any person on the certificate has been changed; or that the registered owner has married, or, if registered as married, that the marriage has been terminated and no right or interest of the children or spouse is outstanding; or that a corporation which owned registered land and has been dissolved has not conveyed the same within three years after its dissolution; or upon any other reasonable ground; and the court may hear and determine the petition after notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions, requiring security if necessary, as it may deem proper.

This provision is the procedural basis of the owners' petition, and its requirement of notice to all parties in interest is the very requirement the trial court found was violated.

Ruling

On the first issue, the Court agreed with the trial court that the question of whether the judgment had been satisfied should be ventilated in an ordinary action, because there is a substantial controversy between the parties over the cancellation of the notice of lis pendens. The Court cited its own precedents in Castillo versus Ramos and Fidelity and Surety Company of the Philippines versus Court of Appeals to that effect. The satisfaction of a judgment, the authority of the attorney who signed the quitclaim, and the receipt of five thousand pesos are contested facts that a registration court cannot resolve in a summary petition.

On the second issue, the trial court's finding that no notice was served on Zuluaga and Erquiaga, Incorporated, stood as a violation of Section 112, which permits the court to hear and determine the petition only after notice to all parties in interest. The Court affirmed the appealed order in full, with costs against the applicants.

Doctrine

A petition under Section 112 of the Land Registration Act is a summary proceeding. It cannot be used to decide a substantial controversy between the parties, such as whether a money judgment has been satisfied or whether a quitclaim was signed with authority. Where the facts are genuinely contested, the parties must litigate in an ordinary action, and the registration court may dismiss the petition without prejudice. The statutory requirement of notice to all parties in interest is jurisdictional in effect: a cancellation order issued without notice to an affected party cannot stand.

Disposition

The Supreme Court affirmed the order of the trial court dismissing the petition for cancellation, without prejudice to the parties filing the appropriate ordinary action, with costs against the applicants.

Remember This

Remember the line that a substantial controversy over a lis pendens cannot be decided collaterally in a Section 112 petition; it must go to an ordinary action. Examiners use this case to test the summary nature of land registration proceedings and the notice requirement under the Land Registration Act.