COLUMBIAN MOTORS CORP., COLUMBIAN AUTOCARS CORP. AND ASIAN CARMAKERS CORP., PETITIONERS-APPELLEES, VS. GENEROSO E. CAHAPISAN, RITO C. MANZANA, BEDE S. TABALINGCOS AND FEDERICO A…

Columbian Motors versus Cahapisan

The Case

This is a petition for the cancellation of an adverse claim annotated on several transfer certificates of title, brought by the Columbian companies against the Victoria heirs and their attorneys-in-fact. The Columbian group owns the land; the Victoria heirs caused an adverse claim to be inscribed on the titles, asserting a one-hectare interest traced to a donation made to their father. The case matters because it tests the life of an adverse claim under Section 70 of Presidential Decree Number 1529 — how long it lasts, how it is cancelled, and what happens when the very document on which the claim rests has already been declared void by final judgment.

Procedural History

The Columbian companies filed a petition for cancellation of adverse claim before the Regional Trial Court of Parañaque City, Branch 274. The trial court granted the petition in an order dated December 26, 2011, directing the Register of Deeds to cancel the adverse claim. The Victoria heirs moved for reconsideration, which was denied in an order dated March 22, 2012. The heirs then elevated the matter to the Supreme Court by appeal, assigning errors against the trial court. The Supreme Court denied the appeal and affirmed both orders of the trial court.

Facts

Benito Garcia owned a large parcel of land in La Huerta, Parañaque City, covered by a transfer certificate of title. The land was subdivided, and a portion eventually became the subject of the present dispute. On December 28, 1968, Benito Garcia allegedly executed a deed of donation, a Kasulatan ng Donasyon, over a one-hectare portion in favor of Jose T. Victoria, his son-in-law. In May 1969, Benito Garcia was declared incompetent, and Jose Victoria's own son Emmanuel was appointed his guardian. Benito Garcia died in May 1970.

In June 1974, the Victoria heirs — the very appellants here — filed a complaint to annul the Kasulatan ng Donasyon. That case, docketed as Civil Case Number 19546, resulted in a judgment declaring the donation null and void. On appeal, the Court of Appeals affirmed the declaration of nullity in a decision dated February 17, 1987, and the judgment became final and executory, as shown by an entry of judgment dated April 23, 1987.

Meanwhile, the property passed through several hands. It was sold to Delta Motor Corporation, mortgaged to the Philippine National Bank, foreclosed, and consolidated in the bank's name. It was later conveyed to the Asset Privatization Trust, then sold to the Columbian group of companies. After a compromise agreement and a deed of absolute sale, titles were issued in the name of Columbian Motors Corporation. In February 2011, the Victoria heirs, through their attorneys-in-fact, filed an affidavit of adverse claim before the Register of Deeds, asserting rights over the property as compulsory heirs of Jose Victoria, based on the same donation. The Columbian companies then petitioned for cancellation of that adverse claim.

Issues

• Whether or not the adverse claim annotated on the transfer certificates of title may be cancelled under Section 70 of Presidential Decree Number 1529 when the donation on which it rests has been declared null and void by final judgment.
• Whether or not the Victoria heirs may still assert rights over the one-hectare portion as compulsory heirs, independent of the void donation.
• Whether or not the attorneys-in-fact, who did not appeal, may obtain affirmative relief from the appellate court.

Applicable Provisions

Section 70 of Presidential Decree Number 1529 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 certificates or title of the registered owner, and a description of the land in which the right or interest is claimed.

This provision authorizes the registration of an adverse claim and fixes its duration and the manner of its cancellation.

The same section further provides:

The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of the said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefore 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.

This fixes the thirty-day life of the claim and bars a second claim on the same ground after cancellation.

The same section also provides:

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 cancelled.

This is the procedural basis for the petition filed by the Columbian companies and for the trial court's order of cancellation.

Ruling

On the first issue, the Court held that the adverse claim was properly cancelled. The hearing under Section 70 exists to determine the validity of the claimed interest. Here, the appellants anchored their claim on the Kasulatan ng Donasyon, but that very document had already been declared null and void by a judgment that became final and executory. The Court reasoned that the appellants had lost whatever rights they had when they themselves caused the invalidation of the donation. Having impugned the document, they cannot later insist on rights flowing from it; such vacillation would denigrate the substantive norm on estoppel.

On the second issue, the Court was not convinced that the heirs retained rights independent of the donation. The alleged Supplemental Agreement with Delta Motor Corporation, which supposedly excluded the one-hectare portion from the sale, was not annotated on the certificates of title, and the Columbian companies were not privy to it. Such a covenant cannot affect innocent third parties. What was annotated was the sale of the whole property to Delta.

On the third issue, the Court held that the attorneys-in-fact, who did not file a notice of appeal, cannot obtain affirmative relief. Only Emmanuel and Eleonor Victoria appealed. A party who has not appealed cannot obtain from the appellate court any affirmative relief other than those granted in the appealed decision.

Doctrine

An adverse claim under Section 70 of Presidential Decree Number 1529 is effective for thirty days from registration; after that period it may be cancelled upon verified petition, and no second adverse claim on the same ground may be registered. The hearing on the validity of the adverse claim affords the claimant an opportunity to be heard and to establish or lose the claimed interest. Where the document on which the adverse claim rests has been declared void by final judgment, the claim has no leg to stand on and must be cancelled. A party who does not appeal cannot obtain affirmative relief from the appellate court beyond what the appealed decision granted.

Disposition

The Supreme Court denied the appeal and affirmed the orders of the Regional Trial Court cancelling the adverse claim, in favor of the Columbian companies.

Remember This

The single line to memorize: an adverse claim lives for thirty days and dies with the document that supports it. Examiners use this case to test Section 70 of Presidential Decree Number 1529 and the rule that a party who does not appeal cannot secure affirmative relief.